Financial Adviser Experience, Education, & Designations

Financial adviser experience, education and designations can also tell consumers a lot about their would-be financial advisers.

With that said, consumers should recognize that financial advisers come from all sorts of experience and educational backgrounds and they have many different designations.

1. Financial adviser experience

Financial advisers can be classified by their work experience based on what type of company they work for. Many advisors work for:

• insurance companies
• accounting firms
• investment firms
• financial planning firms
• bank and trust companies
• law firms

The type of company that an adviser works for will dictate how the adviser sees problems and what solutions they recommend. For example, an insurance company adviser will focus on providing insurance-related solutions.

It may be possible to discern the level of detail or sophistication of the advice rendered based on the type of business that the adviser works for. An adviser working for a law firm or accounting firm will probably be more detail oriented and provide more sophisticated solutions, than an investment firm or trust company adviser – but this is not always the case. There are a number of good advisers at each of these institutions, which means that consumers cannot rely on this measure alone.

2. Financial adviser education

Formal education can also be a good measuring rod for evaluating financial advisers.

Financial adviser education can vary from no education to several college degrees. It is probably advisable that consumers shy away from advisers who have had no formal education.

A four year Bachelor’s degree in accounting or finance used to be the norm. Now it is much more common for advisers to have one or more graduate degrees, including Masters degrees in business, finance, accounting, tax, financial planning or even law degrees.

Because formal education takes time and commitment, the level of education is perhaps the best measure of an advisers level of commitment to being a financial adviser and as a check for whether the advisor can make and fulfill commitments.

3. Financial adviser designations

There are a great many financial designations and licenses out there today, including the Certified Public Accountant (CPA), Certified Financial Planner (CFP), Certified Life Underwriter (CLU), Chartered Financial Analyst (CFA), attorney license, etc.

For the most part, consumers should ignore these designations. The reality is that there are many companies today that specialize in helping financial advisers pass the exams associated with these designations.

Designations do not take any real time commitment to earn and many advisers who are lacking in other areas will load up on designations to try to compensate for their deficiencies.

Perhaps the only real use for designations is for financial consumers who are looking for someone who works in a particular field. For example, consumers looking for someone knowledgeable about life insurance would be well served to find a CLU designee.

Interviewing several financial advisers and creating a list of the above factors can go a long way in helping consumers decide which financial advisor is right for them.

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