Anyone Can Call Themselves a Financial Advisor

I mentioned this in my new intro video.  Sadly, it’s true and it is damn confusing in a world that is confusing enough.  Anyone can call themselves a financial advisor.Besides my video, there was an article in USNews on this same topic of how anyone can call themselves a financial planner or financial advisor. 

The article raises a great point.  You know when dealing with a physician they have completed medical school and their boards.Your attorney finished law school and passed the bar.  Heck, even your Uber/Lyft/taxi driver is licensed and insured.  Unfortunately, when it comes to my confusing world of the financial services industry you cannot make this same assumption.

I know in the past I have shared the story of the two insurance salesmen who preyed on young physicians.  They advertised themselves as financial advisors because according to them it was easier to sell and there were fewer questions.  Plus, when the fiduciary rules were in the pipeline they had nothing to fear as they were not licensed financial advisors.  One story I don’t believe I shared was conveyed to me by a couple I met after a presentation I did years ago.  They told me the shuttle bus driver at their mother’s assisted living facility was a financial advisor.  The husband just shook his head as they were sharing the story.

Unfortunately, in this huge world of financial services, which has tripled in size in the last few decades, things are not always as regulated as even the guy driving you home after a night out with friends.  Now, most people you meet who say they are a financial advisor probably at least have one securities license.  If you want to check, go to FINRA Broker Check to confirm this.  Here you can also find out if they have any formal complaints filed against them.

Even after you confirm whether they are a real financial advisor, it is then time to make sense of their designations.  According to this article, there are over 180 out there.  My first designation was specific to the company I worked for and I acquired it in one (1) hour.  It was very difficult (note the sarcasm font).  I played a training webinar on my computer while I was filling out client paperwork.I then took a simple quiz, passed the first try, and had some initials I could throw on my business card, which is all that mattered to my trainers. 

Now, when trying to make sense of designations I look for a few key ones.  Let me preface this by declaring I am a snob when it comes to financial designations and this is my opinion only.  If you are looking for financial/investing advice I would look for any of the following initials – CIMA, CFA, or CPA/PFS.  Now, if you want true comprehensive financial planning (investing, estate planning, taxes, risk management, employee benefits, retirement planning), look for CFP® (Certified Financial Planner).  Yes, I am a CFP® and a snob.  If you are looking for real financial planning, do NOT just rely on someone who says they are a “financial planner” or if their business card simply reads that.  You need to find the CFP® or CERTIFIED FINANCIAL PLANNER™ credentials behind their name too.

As I mentioned in my video, this big industry that is financial services is confusing enough.Unfortunately, many players in it have only made it more confusing.  It takes some time to find the right CFP® to cut through the confusion.