Financial Advisors

Question 2: What credentials should I look for in a financial advisor?

Unlike the title of “resident physician,” which we all associate with a relatively homogeneous educational and experiential background (e.g., medical school didactics, clerkships, etc.), the term “financial advisor” is far more general and can be used to describe anyone—regardless of their educational or experiential background—who provides financial advice to customers. 

 

Examples of other titles that may be held by “financial advisors” include:

  • Financial Planner / Consultant / Specialist

  • Investment Adviser

  • Accountant

  • Insurance Agent

  • Registered representative (a.k.a. “Broker”)

 

As you might expect from all these different titles, not all “financial advisors” have the same level of knowledge and/or experience, nor do they all offer the same services. Some are guaranteed to be salespeople (e.g., insurance agents, brokers) while others may not sell anything other than their advice. For these reasons, it is important to familiarize yourself with some distinctions that can help you understand different advisors’ credentials. In Table 6.1, we highlight distinctions that convey a certain level of personal finance knowledge and/or experience.

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Table 1. Titles for professionals offering personal finance advice

Abbr. = abbreviation
Note: Those interested in a deep dive into financial credentials and/or looking up other credentials for a prospective financial advisor can do so
here on the Financial Industry Regulatory Authority (FINRA) website.

For residents looking for someone with personal finance knowledge and experience to help them create a financial plan, consider an advisor with a Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), or Certified Public Accountant / Personal Finance Specialist (CPA/PFS) designation. Most residents don’t have large investment accounts or nuanced investing strategies that would warrant an investment specialist such as a Chartered Financial Analyst (CFA).

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