The Wall Street Journal
Wealth Management Journal – October 29, 2012
Alphabet Soup of Advice
Financial advisers use a confusing array of acronyms. What do they mean?
By Caitlin Nish
For investors who decide to enlist the aid of a financial adviser, the next step is often the hardest: wading through the alphabet soup of acronyms and professional designations financial pros use.
RIA Registered Investment Adviser
This is an advisory firm that has registered with the Securities and Exchange Commission or state securities regulators. The investment adviser representatives who work at these firms may or may not have one of the specialized credentials listed below. Unlike brokers, who generally are paid a commission on the securities they sell, investment advisers typically charge a flat rate or asset-based fee and are bound by a fiduciary duty, meaning they must put clients’ interests first when giving advice.
CFA Chartered Financial Analyst
This pro is an investment specialist, trained to value stocks, bonds and alternative investments and build portfolios. This certification requires work experience, extensive study and the passage of three exams.
CFP Certified Financial Planner
Financial pros using this designation have training in comprehensive financial planning.
ChFC Chartered Financial Consultant
Similar to a CFP, a ChFC has training in overall financial planning.
CLU Chartered Life Underwriter
This is an insurance specialist educated in topics such as risk management and estate planning.
CPA/PFS Certified Public Accountant/ Personal Financial Specialist
This is an accountant trained in the nontax parts of financial planning, such as investing.
Comments October 29, 2012
Although many of the designations discussed in the article require varying amounts and difficulty of exams and/or experience, only investment adviser representatives who work at Registered Investment Advisory firms are required by law to act in the best interests of clients.
The largest Registered Investment Advisory firms are affiliated with the largest wealth management firms, which are publicly owned by their stockholders. Like all publicly owned companies they must place their stockholders’ best interests before their clients’ best interests.
Current law requires privately owned Registered Investment Advisory firms to accept fiduciary duty, placing their clients’ interests before any other party – including owners of Registered Investment Advisory firms.
Aaron Skloff, AIF, CFA, MBA
CEO – Skloff Financial Group
Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA), Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies. He can be contacted at www.skloff.com or 908-464-3060.