You’re considering reaching out to a financial professional – but you’re confused by all the letters after their name.

You’re not alone.

The letter abbreviations following the name of a financial professional represents a certification or credential. A financial professional might use a designation to distinguish themselves from their competitors, and to signal that they have specialized expertise. Private organizations, such as trade groups or professional organizations, typically grant these designations.

Let’s look at some frequently asked questions (FAQs) regarding these designations.

Are financial professional designations different from registration or licenses?

Yes, financial professional designations are different from registration or licenses.

The SEC, state regulators – like the Nebraska Department of Banking and Finance (NDBF) – or self-regulatory organizations (SROs) such as FINRA require individual investment professionals to register as broker-dealer representatives (also called registered representatives), investment adviser representatives, or sole proprietor investment advisory firms. 

Professional designations, on the other hand, aren’t issued or overseen by federal or state regulatory authorities or SROs. Moreover, these designations aren’t a legal requirement.

Working with registered investment professionals affords protections for investors that a designation alone cannot provide. For example, some registrations require passing one or more qualification examinations and complying with continuing education requirements. Registered investment professionals are subject to regulatory oversight and disciplinary action for misconduct. They’re also required to provide certain disclosures to their clients and customers.

On the other hand, the SEC, state regulators, and FINRA do not grant, approve, or endorse any financial professional designations. A designation from a private organization does not tell you whether a financial professional is registered or licensed with a regulatory authority. 

Always check to see if your financial professional has the required registration and licensing to provide the type of financial services or products you need. You can do this using the “Check Out Your Investment Professional” search tool on Investor.gov, by using FINRA BrokerCheck, or by contacting the NDBF.

Are all financial professional designations the same?

No, not all financial professional designations are the same.

Some designations require a financial professional to complete some level of training, pass exams, meet ethical standards, have relevant work experience, and take continuing education to maintain them. However, requirements vary, and a relatively small number of designations are difficult to obtain. Other designations require very little time, effort, and experience to obtain and/or may not have any continuing education requirements. Some financial professionals might simply purchase, or even make up, certain designations.

It can be difficult to confirm whether a designation is real or meaningful. In addition, the private organizations that grant designations don’t always have a process for filing complaints about misconduct or for disciplining their designation holders. 

Keep in mind that a financial professional who lacks a designation might not necessarily be less experienced or be less qualified or less ethical than those with designations.

What can I do to learn more?

• FINRA operates a Professional Designations database. Remember, FINRA, the SEC, and NDBF do not grant, approve, or endorse any professional designation.

• Check with the organization that granted the designation. Professional organizations might offer information about the designations that they grant. In some cases, the granting organization’s website might allow you to verify whether a person has earned a certain designation.

• Check that an investment professional is licensed by or registered with the SEC, NDBF, or FINRA with the “Check Out Your Investment Professional” search tool on Investor.gov. You can also use this search tool to check a registered person’s background, including any disciplinary history or customer complaints. Information is also available about their firm.

• Learn more about registered financial professionals generally via this article.

What questions should I ask?

In addition to the steps outlined above, talk with the designation holder. Ask questions about the financial professional’s designations, such as:

• What organization awarded your designation?

• What does this designation mean?

• What training, ethical, and other requirements are required to receive the designation?

• Did you have to take a course or pass a test?

• Does the designation require a certain level of work experience or education?

• To maintain the designation, are you required to take and pass refresher or continuing education courses? If so, how often?

• Does the organization that granted your designation have a process for filing a complaint against a designation holder? And if so, do they publish the complaints and their outcomes?

If you have additional questions, or need more detailed insight on this topic, call the NDBF at (402) 471-2171.