What do all those letters and terms following an advisor’s name mean? We explain what you need to know and what’s important when it comes to designations in the financial industry.
When you first come across a financial planner, you may notice a few letters or numbers behind their name. What do they all mean? How much does it matter as you decide who to work with?
We start with IAR or RIA. An RIA is a registered investment advisor is a person or most often a firm registered either with the SEC or the state they operate in. An IAR is an investment advisor representative. They have a fiduciary responsibility to give investment advice that is in the client’s best interest.
What are the more common designations and why do so many of them contain the letter “c”? It can stand for words like chartered, certified, consultant, credited, and more. David talks through some differences between a few of the most common ones like CFP, CFA, ChFC, or RICP, and what it takes to get those designations. After coursework and a rigorous exam, financial planners are able to use these designations to show their level of expertise and understanding. As an investor, you want to know how rigorous the course of study and how rigorous the testing is.
When talking about qualifications, some advisors will promote their Series 65, Series 7, or several others that have the word “series” in it. David explains the difference between each that allows advisors to sell certain products within the financial world. Remember, the difference between a brokerage firm and an advisory firm is that you have a different level of responsibility to your customer or client.
Should your financial advisor have a particular college degree? David feels that the advisor you’re working with should have a significantly broad understanding of how financial markets and money works. Having at least an undergraduate degree that includes classes in economics, money banking, and investments helps. Someone with an MBA doesn’t necessarily qualify someone to work with you if they have classes in marketing or other courses that don’t apply as much, but it’s worth having an undergraduate degree as the base education before putting the other designations on top. David shares what designations he thinks is most important for an advisor to have before you work with them to plan your retirement. What designations does your advisor have?
If you ever want your question spotlighted on the show or to ask David something about your retirement, email him at [email protected]
Listen to the entire episode or skip ahead using the timestamps below to skip to a particular question.
0:35 - What do all those financial advisor designations mean?
2:13 - What does IAR or RIA mean?
5:26 - What does the letter “C” stand for in these designations and why should I care?
12:28 - What does a “series” mean when promoted by an advisor?
16:12 - Does a financial advisor need a certain college degree?
18:30 - What designations should an advisor have to prepare someone for retirement?
“The difference between a brokerage firm and an advisory firm is that you have a different level of responsibility to your customer or client."
– David Dickens
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CONTACT US
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Building 27, Suite 190
Overland Park, KS 66210
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