How is your financial planner certified?

By Jamie Blanco
Digital News Writer
Federal News Radio

Whether you are a fed facing furloughs, a contractor waiting on that next award or a veteran heading into the private sector, now may be the time to make or change your family’s financial plans. But how can you guarantee the financial planner you choose has the right credentials?

Arthur Stein, a certified financial planner with SPC Financial in Rockville, Maryland, told Federal News Radio the best way to find trustworthy advice is to first make sure you know what the letters at the end of a person’s name stand for.

“Financial planners who have a certification next to their name…[are] more likely to be trusted, [are] more likely to make money,” Stein said. “The problem is the number of credentials has exploded.”


The Financial Industry Regulatory Authority, or FINRA, is the main regulatory body overseeing financial planners. Five years ago FINRA was tracking 48 certifications for financial planning. Today they are tracking close to 95. The Wall Street Journal, in an investigative article, found another 115 different certifications.

“What the Journal article found was some of [the certifications] were extremely easy to get. Others were extremely hard and required a lot of rigorous training and exams,” Stein said.

The most difficult certifications to land: Chartered Financial Planner (CFP), Certified Public Accountant (CPA), and Certified Financial Planner (CFA). For example, you must have a bachelors degree and pass a 14-hour exam in order to become a CPA. These certifications also have higher ethical requirements, more oversight and mandate continuing education, said Stein.

At the other end of the spectrum, according to the Journal, the easiest certifications to land: Certified Retirement Financial Advisor (CRFA), Certified Senior Advisor (CSA), and Chartered Senior Financial Advisor (CSFA). For example, passing one three-hour exam is all it takes to become a CSA.

Stein said it may be difficult but the best way to find a trustworthy person who will make the best decision for your money is to do your own due diligence.

You can get on FINRA’s website…and look up people by name, see their qualification, if there have been customer complaints or regulatory actions against them. You can check with your state insurance commissioner. You can check with the Security and Exchange Commission. However, with the SEC and FINRA they’re only going to list somebody if they’re licensed to sell securities directly to investors. And then the other idea that [the Journal article] had, and it’s a worthwhile one, is if you don’t recognize the credential, look up the credential on the web, go to their website and see what you think about it.

Overall Stein recommends investors stick with financial planners who have earned the more recognizable and difficult certifications.

“Having a certain certification…does not mean a person is honest and competent. But at least with the more rigorous ones it does mean that they did take courses, they are subject to ethics regulations, that they do do continuing education.”