FINRA - Investor Information - Understanding Professional Designations

FINRA does NOT approve or endorse any professional designation.
Please read our disclaimer for important information.

Read the investor alert Regulators Urge Investors to Carefully Check Credentials of 'Senior Specialists'

Massachusetts issues New Regulations on Senior Financial Designations

Nebraska Department of Banking & Finance issues a Special Notice prohibiting use of senior-oriented designations

FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers

Missouri Announces Rules Stopping Misleading "Senior Specialist" Designations

Rule of Conduct 2210 prohibits brokerage firms and brokers registered with FINRA from referencing nonexistent or self-conferred degrees or designations or referencing legitimate degrees or designations in a misleading manner.

Also be aware that Financial Analyst, Financial Adviser (Advisor), Financial Consultant, Financial Planner, Investment Consultant or Wealth Manager are generic terms or job titles, and may be used by investment professionals who may not hold any specific designation.

Selecting Your Investment Professional

Before you engage an investment professional, make sure you know more about an investment professional than just their name and professional designation. Here are some steps you can take to find an investment professional that can meet your financial needs:

Think about your financial objectives and know what type of financial services you need. There is a wide variation in the range of products and services that investment professionals offer. Some professionals can provide financial statement preparation and analysis, investment planning, tax planning, estate planning, retirement planning, education planning, and risk management services. Other professionals may only be able to recommend a limited number of investment products. Knowing what you need will not only help you find the professional that's right for you, but prevent you from paying for services you don't want.

Get names of professionals from friends, neighbors, family or business colleagues. If you receive a name of an investment professional from an individual or group that you don't know, be certain to ask for several references.

Talk with several professionals. Meet them face-to-face in their offices, if possible. Ask each of them about their:

Areas of specialization
Professional designations
Registrations or licenses
Education
Work history
Investment experience
Products and services
Disciplinary history

Understand how you will pay them for their services. Investment professionals are typically paid in one (or more than one) of the following ways:

An hourly fee
A flat fee
A commission on the investment products they sell you
A percentage of the value of the assets they manage for you
A combination of fees and commissions.

Ask whether they receive any additional compensation or financial incentives based on the products they sell. Sometimes investments professionals and their firms receive additional compensation for selling a particular mutual fund or other investment product.

Make sure that the investment professionals and their firms are properly registered with FINRA, the U.S. Securities and Exchange Commission or a state insurance or securities regulator and learn about their professional background, business practices, and disciplinary history. Most investment professionals need to register as investment advisers, investment adviser representatives or brokers (registered representatives). Others may only be licensed to sell insurance. FINRA's Web site can help you find registration and other background information on these professionals.

Check out any professional designation by contacting the issuing organization and determining whether they are currently authorized to use the designation and whether they've been disciplined. And make sure you understand the requirements for a professional designation. The criteria used by organizations that grant professional designations for investment professionals vary greatly. As noted earlier, some require formal certification procedures including examinations and continuing professional education credits. Others may merely signify that membership dues have been paid.

If the investment professional will sell you investment products, ask if the firm they work for is a member of the Securities Investor Protection Corporation (SIPC). SIPC provides limited customer protection if a firm becomes insolvent. Ask if the firm has other insurance that provides coverage beyond the SIPC limit. SIPC does not insure against losses attributable to a decline in the market value of your securities. Learn more about SIPC protection and its limitations.

Remember, part of making the right investment decision is finding the investment professional that best meets your financial needs. Do not rush. Do your background investigation. Resist investment professionals that urge you to immediately hire them.

Once you've selected an investment professional, you still need to keep eye on your investments. In our Investor Alert -10 Tips to Keep Track of Your Investment, we offer you advice on how to monitor your investments to minimize the risk of errors or fraud.

Additional Resources

FINRA, Invest Wisely (information on selecting a broker)

U.S. Securities and Exchange Commission, Investment Advisers: What You Need to Know Before Choosing One .

Disclaimer

FINRA does NOT approve or endorse any professional designation. The list is provided to assist investors in evaluating the professional designations an investment professional may hold. FINRA is not responsible for and cannot verify information from sources other than FINRA, and does not warrant or guarantee the accuracy or completeness of the information.

This listing is by no means inclusive of all financial professional designations and specifically does not include insurance or employee benefit related designations or designations related to finance degrees from accredited colleges or universities. Representatives of organizations issuing professional designations may submit their securities or investment professional designation for possible inclusion in FINRA's listing of designations by completing our Professional Designation Form . FINRA reserves the right to determine which designations are appropriate for our listing.

Understanding Professional Designations