What certifications should my investment advisor have?

The world of finance and investing can be overwhelming. This is especially true if you are new to this arena. It seems like just anyone can claim to be an investment advisor. Worse yet, the news seem to be constantly filled with hapless investors who were scammed by an "investment advisor". However, savvy investors, (even first time ones), take the time to carefully do their research, before entrusting their hard earned money to just anyone. While you may be eager to get going and make money, taking the time to understand who an investment advisor really is and what he or she can and cannot do for you, can ultimately determine whether or not your investing is successful. Part of understanding this is knowing what certifications your investment advisor should have. Here is what you need to know about what certifications your investment advisor should have-

• What does it mean if my financial professional claims to be certified? If you are considering a particular investment advisor, and they are claiming to be certified, this can be easily checked out. You do this quickly and easily by visiting the Certified Financial Planner Board of Standards, Inc. website. Here you will be able to see if the investment advisor is certified as a professional and whether their certification has ever been suspended or revoked. There will also be a telephone number listed where you can all and question them about any disciplinary action that has been taken.
• Should the investment advisor I am considering hiring, have credentials? It is important to understand that there is no law, either state or federal, that requires investment advisors to have credentials. While some financial professionals will have credentials, many others do not. However, there are some states that will require financial professionals to pass an exam, testing their proficiency, or meet some other requirements. The bottom line is that you must be willing to check out the person credentials, or lack of them and feel comfortable with what you find.
• What type of background should my investment advisor have? It is important to understand that investment advisors, in fact many financial professional, come from all different educational and professional backgrounds. If they do state that they have a certain credential, then it is crucial to ask what it means, what they had to do to earn it, and how does it affect their investment strategies. You should also ask about the organization that issued the credentialing and feel free to contact them as well. You will want to ask the organization what the individual did to earn that particular credential and whether they remain in good standing with it.
• What certifications are most common and most widely recognized? The following certifications are most widely recognized within the financial services industry-

1. Accredited Estate Planner (AEP) 2. Certified Financial Planner (CFP) 3. Chartered Financial Analyst (CFA) 4. Chartered Investment Counselor (CIC) 5. Insurance Agents 6. Chartered Financial Consultant (ChFC) 7. Chartered Life Underwriter (CLU) 8. Personal Financial Specialist (PFS)

Should I hire an investment advisor over the phone? While you can get lots of pertinent information over the phone and even check out their credentials, it is highly recommended that you meet with any potential investment advisor, face to face. This way you can really get a sense of what a person is like and what they can do to help you manage your investments. They should be willing to help you put a plan in place that will ultimately lead you to achieving your financial goals. This is best done when you can meet with someone in person.

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