Finra Warns of Fake FA Designations
Financial advisors keen on including a string of acronyms at the end of their titles to impress prospects may want to think again. Finra is urging investors to wade through the “alphabet soup” of advisors’ professional designations by verifying that they’re real and current. The industry’s self-regulator also suggests investors look up what it takes to actually get those letters.
In an investor alert issued this week, Finra tells investors to be wary of financial professionals touting their designations as a way to lure new business.
The regulator warns that designations vary widely in terms of the difficulty of obtaining them, with some requiring rigorous preparation and others merely involving just paying an annual fee.
To separate the wheat from the chaff, Finra says investors should check their advisors’ professional credentials against its database of professional designations to learn about each one’s requirements and to check whether their advisors still hold a valid designation.
The regulator also discourages investors from picking an advisor based on the designations alone.
Finra says designations can be used fraudulently as a way to fake credibility. The regulator says investors should clarify with their advisor when they received the designation and whether it’s still current. Finra also suggests using its designations database for links to the issuer of the designation’s own list of current and valid designees.