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The Alphabet Soup of Financial Advice Part II – Salespeople on High as published in InsideNova.com

In my last article I explained that, as a consumer of financial advice, you owe it to yourself to get to know not only who is providing you advice, but whether they’re qualified for the role. This week, let’s take a closer look at financial industry job titles. It’s up to you to ensure there is tangible talent behind the titles you see.

Financial advisor, money manager, investment consultant, wealth advisor … these are marketing terms that may suggest a lot, but tell you little. It’s also common for large, brand-name financial service companies to give their salespeople lofty titles, like “Vice President of Such & So.” Dig deeper, and you’ll find departments filled with “vice presidents,” regardless of experience, education or company tenure.

To learn more, ask pointed questions (and request a written response):

  • What is your professional and educational background? Beyond passing a very basic test or two, there are few rigorous requirements in our industry. The bar is very low.
  • How long have you been offering financial services? If they’ve not been in the industry for at least 10 years, they’ve had little experience with down markets.
  • What type of client do you commonly work with? If you are a business owner, you probably do not want to be a financial advisor’s first business-owner client.
  • Will you sign a fiduciary oath? In other words, will they put your financial best interests ahead of their own? The vast majority of those calling themselves financial advisors will not sign such an oath.
  • How are you paid: by me, third parties, or both? You don’t want your financial advisor’s sources of compensation to create conflicts of interest, so it’s best if you are your advisor’s only “boss.” I’ll talk about this further in a future article.
  • Have you been cited by a professional or regulatory governing body for any disciplinary reasons? Also go to brokercheck.finra.org to view an advisor’s disciplinary history for yourself.

In my next article, I’ll spoon into the alphabet soup of financial credentials.

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