10 Things to Consider before Selecting a Financial Advisor – By George Mentz, Esq.
- Experience – Make sure your advisor has a track record of success.
- Accredited Education (Level 2) Preferred – Make sure your advisor has an education from a program that is accredited. Also, if the advisor has a degree or diploma from a Level 2 institution that has both regional accreditation and business accreditation, that is the best. As your advisor if he or she has successfully completed all exams of a business degree from an ACBSP or AACSB accredited program.
- Licenses – Are they licensed with the SEC or FINRA and do they have a record of good standing.
- Government Professional License – Are they a lawyer or CPA. If so, check with the state bar association or AICPA to make sure they have a solid record.
- Regulatory and Product Knowledge – Make sure your advisor has the ability to recommend a broad array of solutions for your wealth preservation and growth.
- Qualifications – See if your advisor is a member of a prestigious body such as the CWM ® Chartered Wealth Manager Institute. Ask if they are board certified as an: Accredited Financial Analyst ® or Chartered Wealth Manger ®. Also, if they have a law degree and license or CPA, then they may also be competent to provide advice on tax law and estate planning.
- Value and Compensation - How will your advisor earn income from you? Make sure they get paid for their work, but it may be best to make sure they are not double dipping. Some advisors will charge a fee for advice and then also invest you in a product that also has fees. With the ease of use of ETF Exchange Traded Funds, make sure your advisor is providing added value.
- Wealth Team - Does the wealth manager have a group or team to help you in the areas of: Investing, Wealth Preservation, Risk and Insurance, Trusts, Legal, Retirement and Tax. Ask if they have names of people they have worked with successfully.
- Customer Regulations – Be sure to let your advisor know what your objectives are. Make sure they understand your 1) suitability, 2) risk tolerance, and 3) time horizon. Ask the wealth manager to explain each of these to you in detail.
- Policy Statement – Make sure your wealth manager provides you with an IPS Investment Policy Statement that outlines what they will do for you and the limitations involved.
*No investment, legal or tax advice is intended to be given herein. Please see a licensed professional before making any important decision.
Standards for Professional Designations and Board Certifications in the United States
Certification Standards Guide
Professional Designations in the United States and Internationally have a long history. Legal cases such as the IBANEZ decision of the Supreme Court imply that bone fide “board certifications” or “professional designation” criteria includes: 1) Accredited Education, 2) Assessment, 3) Degree 4) Continuing Education and 5) Ethics/Professionalism 6) Experience.
Types of Certifications and Accreditation Standards – Level II is the Highest
- Certification requiring Level 2 Accredited education and exams. This is the highest form of educational requirements. This education is generally preferred for CPA licensure and for certifications from organizations such as the AAFM American Academy of Financial Management. Level 2 means that both the college or university is accredited AND the business school is also separately accredited by a government recognized body. The ACBSP, AACSB or EQUIS are examples of level 2 accreditation while education from an ABA American Bar Association education would also be level 2.
- Charters or Certification requiring a college diploma and exams. This is a high standard but does not require Level 2 Accreditation Degree. Thus, the degree may be from a good school offshore but it may not be accredited by a recognized organization. Certifications in this category focus on giving only exams as a path to achieving a “non government recognized professional designation” or becoming chartered with a credential as a financial analyst.
- Credential requiring only exam. This standard is strong but does not require a degree historically but rather a test only. Examples are a project management designation or a typical financial planner designation or credential.
- Note: A degree, MBA, MSc, or credential based on a Level 2 education is more widely accepted globally than qualifications or degrees that do not maintain ”Level 2″ Status. Further, course credits are more easily transferrable with reciprocity from Level 2 business schools and institutions that are double accredited.
*Most State and Sovereign Governments worldwide prefer Level II Accreditation for the purposes of business school standards, top MBA programs, or becoming a CPA or Chartered Accountant. Further, Government recognized Bar Accredited Education is required for a legal education and licenses. Level 2 accreditation – the business school. In a Level 2 accreditation, the college or university and the business school are separately accredited, but the accounting program is not separately accredited. This level applies to a business school that is accredited by an organization recognized by the Council of Higher Education Accreditation (CHEA) as a specialized or professional accrediting organization, such as the AACSB or the Association of Collegiate Business Schools and Programs (ACBSP).