The Securities and Exchange Commission's (SEC) Office of Investor Education and Advocacy and the North American Securities Administrators Association (NASAA) are jointly issuing this Investor Bulletin to help investors better understand the titles used by financial professionals. The requirements for obtaining and using these titles vary widely, from rigorous to nothing at all. To use certain titles, a financial professional may need to pass exams, meet ethical standards, have relevant work experience, and undertake continuing education. Other titles, however, may be obtained with little time, effort, and experience.
Neither the SEC nor NASAA endorses any financial professional titles. We encourage you to look beyond a financial professional's title to determine whether he or she can provide the type of financial services or products you need.
Registration or Licensing Status of Financial Professionals
Financial professional titles and licenses are not the same. A financial professional may use various titles whether or not he or she is registered or licensed with a regulatory authority. Financial professionals that are registered as a broker-dealer or investment adviser have obtained registrations and licenses granted by federal or state regulatory authorities. Working with a financial professional who is registered with or licensed by federal or state authorities affords you certain legal protections.
The same financial professional may register in more than one capacity. For example, many financial professionals register as both a registered representative with a broker-dealer firm and an investment adviser. Also, a financial professional selling some insurance products, such as variable annuities, may be regulated as both a registered representative of a broker-dealer and an insurance agent. Insurance agents are subject to state insurance laws and are regulated by state insurance regulators.
Do not rely solely on a title to determine whether a financial professional has the expertise that you need—find out what the title means and what the financial professional did to obtain it.
Some titles are granted by private organizations, such as a trade group. While some private groups that grant titles may provide a method for you to complain about one of their members and can discipline a member for misconduct, there are other groups that do not take complaints or discipline their members.
Still other titles may be simply purchased, or even made up by financial professionals hoping to imply that they have certain expertise or qualifications; such titles are generally marketing tools and are not granted by a regulator. As with any title, you should verify a financial professional is really qualified to advise you. See "How to Check on the Financial Professional's Title" below for more information.
If a financial professional tells you that he or she has a certain professional title ask questions. Some questions you can ask include:
Investment advisers are required to provide to their customers a brochure about their employees. If an employee lists a professional title, the brochure supplement must include an explanation of the minimum qualifications required for this professional title.
You may also learn about financial professional titles online at the Financial Industry Regulatory Authority's (FINRA) website page, "understanding Investment Professional Designations" available at: http://apps.finra.org/DataDirectory/1/prodesignations.aspx. This website provides information such as:
Like the SEC and state securities regulators (NASAA), FINRA does NOT grant, approve or endorse any professional designation.
Professional organizations also may offer information online about the titles that they grant. In some cases, the granting organization's website may allow you to verify that a person has earned a certain title. For example, the website of the Certified Financial Planner Board of Standards (www.cfp.net) allows visitors to search for CFP professionals to verify CFP certification.
Even after checking, it may not be clear to you whether a title represents relevant expertise, a marketing tool, or something else. That's why you should always check the financial professional's background, rather than relying solely on the professional's title.
To do your own online research about a broker's or investment adviser's professional qualifications, experience, education, and any disciplinary history, visit:
To learn more about a particular professional designation, visit FINRA's "Understanding Investment Professional Designations" at: http://apps.finra.org/DataDirectory/1/prodesignations.aspx.
To learn more about financial planners, including investment adviser, broker-dealer, and insurance agent laws and regulations, see the Government Accountability Office's Report Regulatory Coverage Generally Exists for Financial Planners, but Consumer Protection Issues Remain at: www.gao.gov/products/GAO-11-235.
NASAA model rule on the use of senior-specific certification and professional designations at: www.nasaa.org/ wp-content/uploads/2011/07/3-Senior_Model_Rule_Adopted.pdf.
The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.