Evaluating Financial Credentials

  By Bruce Jentner
Bruce Jentner

There are hundreds of financial professionals in our community, and most of them want to invest your money. But all of them know you want to work with an expert.

When we need income tax returns prepared, we seek help from an expert, usually a CPA. When we need legal help, we seek help from an attorney. However, when it comes to investing our money, there are hundreds of credentials touted by people trying to market their expertise to you.

What if an advisor presented a business card listing the initials CRQ, IAF, and RIE after their name?  (These happen to be the same credentials listed on the business card of the now infamous money manager, Bernard Madoff.) The Paladin Registry, a research firm that provides information to investors, has identified more than 260 financial designations that advisors are currently touting. According to the Paladin Registry, “The vast majority are worthless.”

Competent, ethical financial advisors spend years studying and taking exams to obtain legitimate credentials. Some financial salespeople and want-to-be advisors attempt to earn your trust by taking shortcuts. They buy fake credentials and use them to convince you they are financial experts.

When it comes to managing money, no credential will guarantee competence. However, there are several credentials that will help you find an advisor with strong financial training. In my opinion, the top two financial and investment credentials are:

  1. CFP®: CERTIFIED FINANCIAL PLANNER™
  2. CFA: Chartered Financial Analyst

A CFP® professional is trained to provide a combination of financial planning and investment advice. A CFA professional is trained to provide investment research if you are seeking specific investment expertise.

For more insight, listen to Jentner Wealth Management’s weekly podcast by clicking here. Or download Jentner’s white papers on The Four Cornerstones of Prudent Investing and The Active Versus Passive Investing Debate.