Last weekend, the Wall Street Journal published an article discussing the importance of verifying financial advisers' credentials. The WSJ identified more than 200 credentials that financial advisers append to their names, most of which appear indistinguishable to the average consumer (CPA, CSA, CFP, CSFP, etc.). However, the requirements to earn these credentials varies greatly, as some can be earned in a few hours while others require hundreds of hours of study to pass intensive multi-day exams. The WSJ offered a few resources that will help anyone researching a financial professional:
- The Financial Industry Regulatory Authority (FINRA) is an independent regulator of US securities firms. Consult its BrokerCheck to verify an adviser's education and qualifications, which will include information about any complaints or regulatory actions will also be listed here.
- Contact state insurance and securities regulators through the National Association of Insurance Commissioners and the North American Securities Administrators Association to inquire about any disciplinary actions taken against the adviser.
- Advisers register with the US Securities and Exchange Commission (SEC) using a Form ADV. Be sure to review both Part I, which discloses an adviser's education and disciplinary history, and Part II, which details the adviser's business practices.
For more information, read the full WSJ article here.
Additionally, read here for a past blog entry on distinguishing membership in a professional organization from a professional credential, and here for a helpful resource to verify professional licenses.