The alphabet of financial advice

Those capital letters behind an adviser's name reflect level of training

Dollars & Sense

October 26, 2003|By KNIGHT RIDDER/TRIBUNE

Brokers and investment advisers use an array of credentials that are supposed to tell customers that they've studied the task of handling money.

But it's not easy to sort those titles out.

For example, your investment adviser could be a CIC, ChFC, PFS, CFP, CFA or CLU.

Or, your broker might be a financial consultant, financial planning practitioner or a certified divorce planner.

To start, there are some titles that aren't official, such as financial consultant or financial planning practitioner. These do not require completing a course of study.

There are others that require a small amount of study.

A certified divorce planner, for example, takes a $1,250 self-study course covering taxes, finance and procedures of divorce that usually takes three months to complete, according to the Institute for Certified Divorce Planners' Web site.

Still other credentials require substantial effort.

A person with the designation CFA - chartered financial analyst - has gone through a broad program from the Association for Investment Management and Research. The program requires about 750 hours of preparation as well as three major examinations.

A CFP - certified financial planner - has to take five college-level courses and pass an examination. Accountants, lawyers and a few others can take the exam without taking the courses.

The ordinary broker doesn't need additional educational requirements. There are more than 664,000 registered representatives nationwide, all of whom have qualified by taking at least one basic test.

The General Securities Registered Representative Examination, the so-called Series 7, is a 250-question multiple-choice test that is administered by the National Association of Securities Dealers.

One popular preparation course available through www.series7test.com requires about 120 hours of study, a one-week crash course and a month of twice-a-week evening classes.

Only since 1995 have brokers been required to go through formal continuing-education programs every few years.

No matter whom you choose and what that adviser knows, you have to study investments as well, advises Barbara Rober, the Consumer Federation of America's director of investor protection.

"People need to take responsibility for knowing enough about personal finance in general, and their own finances in particular, so that they can know bad advice when they get it," she said.

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