The Truth About Financial Designations Revealed

There are a lot of professional designations used within the financial industry. While some of these titles actually mean something and have relevance, many are simply misleading.

An article that appeared in the Wall Street Journal, shed light on the fact that the number of financial credentials has skyrocketed over the years. It also revealed that many of these newer designations require only a small amount of effort to obtain. The article was titled, "Is Your Adviser Pumping Up His Credentials?"

Designations Translate Into Profit for Financial Professionals
There is a reason why so many financial professionals use designations. They recognize that these titles conjure up trust and authority in the eyes of their clients.

Seniors have been especially prone to the abuse that accompanies professional designations. A study by the Financial Industry Regulatory Authority (FINRA) from 2007 discovered that 46 percent of older investors were more likely to take financial advice from someone who was using a professional designation. You can read more about designations aimed toward seniors, in our article, Senior Investors Warned - Don't Let a Fancy Title Mislead You.

The List of Professional Designations is Long
FINRA has reported that there are at least 95 professional designations for financial advisers, which is double the amount recorded in 2005. The Wall Street Journal apparently found at least 115 other financial credentials not tracked by FINRA.

Some Professional Designations Have Strict Guidelines, Others Don't
Despite the high number of financial credentials being used in the industry, there are some that are more established and stringent than others. Among these designations are:

• Certified Financial Planner
• Chartered Financial Analyst
• Certified Public Accountant

Other designations, such as Certified Retirement Financial Adviser and Certified Senior Adviser, are not as difficult to obtain.

FINRA Has Rules Regarding Designations
FINRA does not allow brokerage firms and brokers registered with the agency, to reference "nonexistent or self-conferred degrees or designations." (Source: FINRA "Understanding Professional Designations") In addition, these brokerage firms and brokers are prohibited from referencing designations in a misleading way.

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If you have lost money due to broker misconduct or some form of negligence, you may be able to recover your losses. Contact an experienced securities fraud attorney for a free case evaluation by calling toll-free 1.866.827.6537 or filling out our online form. Our securities fraud lawyers are licensed in Ohio and California and we represent investors nationwide in securities arbitration and litigation claims.

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