Alphabet Soup: Financial Designations & Certificates

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AUTHOR: Dr. David Edward Marcinko; MBA, CMP™

POSITION: Publisher-in-Chief


TOPIC: Financial Designations and Certifications [Alphabet Soup of Industry Obfuscation and Self-Promotion, or Real Gravitas – You Decide?]

EXCERPT: “Until recently, most financial advisors were regulated by the NASD, the National Association of Securities Dealers. Now the Financial Industry Regulatory Authority or FINRA is the largest non-governmental regulator for all securities firms doing business in the United States. It is a self-regulatory agency comprised of the nation’s brokerage firms. Upon completion of a required exam the FINRA will issue a variety of licenses. The most common are the Series 6, 7, and 24.

The Series 6 is essentially a license to sell packaged products, namely mutual funds. It is most commonly held by insurance agents and bank representatives. It is considered a very easy test. Holding such a license allows the holder to collect commission income through its member firm.

The Series 7 exam is a bit more difficult and includes issues relating to individual securities such as stocks, bonds and limited partnership interests. The pass rate is lower than the Series 6. The probable culprit is the extensive questioning on margin and options, topics most are unfamiliar with prior to entering the securities business.

The Series 24 covers issues of compliance and supervision and is required of Branch Managers of brokerage firms. All registered representatives (the proper name for a broker) must be supervised by someone with a Series 24, also known as a principal’s license.

Checking the background of a registered representative, a branch manager or a member firm is easily done through NASD and/or FINRA Regulation, Inc. NASDR/FINRA maintains the Central Registration Depository (CRD). The CRD can be checked for a description of a disclosed event by phone or by Internet. One should request information on an advisor’s firm as well as the individual. A reputable advisor at a disreputable firm has its own set of potentially dangerous implications.

Regardless of the above, these tests produce licenses to sell financial products. They are not educational achievements. There is virtually no academic barrier to entry for them. Stock-brokers today – hate the term – and prefer “financial advisor”; yet the term has no real meaning other than as a sales license.

Some are college graduates, and beyond; while some other experts argue that too many are not!”

Hence, the need to “raise the bar to fiduciary accountability with deep knowledge of healthcare modernity.”

For more info:

READ JULY HERE: financial-designationsjuly


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3 Responses

  1. Greetings Subscribers,

    Did you know that according to MarketWire on January 29, 2009, the Securities Law Firm of Tramont Guerra & Núñez, PA (TGN) made an announcement concerning American International Group (NYSE: AIG) and major Wall Street firms which were named in a class action lawsuit (Case No. 08 CV 10586) filed in the Southern District of New York on December 4, 2008.

    The syndication of Wall Street underwriters that were named parties for their role in raising tens of billions of dollars from the investing public while generating hundreds of millions of dollars in fees included:

    Citigroup Global Markets (NYSE: C), Banc of America Securities (NYSE: BAC), Barclays Capital (NYSE: BCS), Wachovia Capital Markets (NYSE: WB), a successor in liability to AG Edwards, Credit Suisse Securities (USA) (NYSE: CS) and Deutsche Bank Securities (NYSE: DB).

    The class action filed on behalf of investors alleges that the Wall Street underwriters failed in their obligation to assure the accuracy of the information used in the three shelf registration statements used to solicit clients to invest funds in the company.

    Furthermore, MarketWire said that the Offering materials failed to disclose the massive liability and exposure to Credit Default Swaps, a financial instrument used by investors to hedge exposure on collateralized debt obligations and other debt securities.

    Financial certifications? – Fiduciary responsibility? – Trusted Financial Advisors?
    I think not!



  2. Hi Elliot, and Everyone

    Too much different ion – Too little fundamental knowledge

    I agree with you.

    Most doctors, dentists, lawyers, PhDs, MBAs, and RNs etc., earn degrees and humbly appreciate how little they know … and how much more there is to lean.

    Most CFPs earn an industry marketing mark … and think they know it all.

    If the life planners and coaches, “green” advisors, social suitability managers, divorce and female focused planners, grief counselors; and advisors for the suddenly wealthy, or the working class, or airline pilots, or teachers, or Hispanics, Native Americans and African Americans, etc, etc; had focused on true “financial planning” – maybe we wouldn’t be in the current mess.

    Incidentally, there are marks and certifications for all of the above; and more. So, before we try to “differentiate and market” our perceived services, we need a core basis of true fundamental knowledge for all of them. To date, the industry does not provide same.



  3. Advisor Professional Designations Held or Being Pursued

    According to on February 27, 2015, Series 7, Series 63, and state insurance licenses are the three designations most widely held across the W/R and IBD advisor populations. While these are also common designations for advisors in the RIA channel, they are not as dominant.

    Indeed, 58% of RIAs report holding the Series 65 license and 34% report holding the Certified Financial Planner designation, both of which are better aligned with the business approach of the RIA channel. RIAs are also the only cohort with a double-digit percentage of advisors holding the CFA designation, with 10% indicating they hold it versus only 2% of advisors in the other channels. RIAs also had the highest incidence of MBAs, consistent with the high overall correlation of the CFA charter and MBA degree.

    This appears to come at the expense of advisors having or pursuing the Series 7 and 63 licenses, as the RIA segment lags the industry at large in both of these categories, due at least partially to their skew toward fee-only business.



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