Alert
Close

Take AARP’s Smart Driver course and you could save money on your car insurance. Learn more

Highlights

Open

Think You Know AARP Caribbean Cruise Sweepstakes

Money & Work

Contests and
Sweeps

Safe Driving in 2014 Sweepstakes

Learn how AARP Driver Safety can help you stay safe—and enter for a chance to win $1,000. See official rules. 

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Scam Alert

Recognizing Fake Certifications

Strings of letters after an adviser’s name look impressive, but may mean nothing

Older investors are losing big money in unsuitable or outright scam investments — a per-victim average of $140,500, according to a new study. But the bogus promises of "no-risk" and "high-yield" returns touted in free lunch seminars and cold-call solicitations tell only part of the story.

Playing a big role as well is business card boasting — those often mysterious strings of capital letters that follow the names of advisers.

It turns out there are more than 140 of these designations and certifications.

Decipher financial business card certifications.

Financial planners can use impressive looking certification lettering on their business cards. Here's what you need to know to avoid being scammed. — Corbis

"Senior investors are particularly vulnerable to confusion" about what such alphabetical authority means — or doesn't, notes Kevin Keller of the Certified Financial Planners Board of Standards, which recently surveyed its members on how investors age 62 and older are getting swindled.

Many certifications are legit — such as the CFP designation for Certified Financial Planner. It's earned through taking additional coursework beyond a college degree, passing rigorous tests and background checks and meeting strict criteria. But others are available for little more than paying about $50 to get letters after a name, notes another CFP Board official.

In June, the Consumer Financial Protection Board put out a call for recommendations on how to combat elder financial abuse. Based on the results of its survey, Keller's group is asking the federal agency to create a rating system for financial certifications and designations.

So until a certification rating system is enacted — assuming one is — how can you establish the qualifications of a financial adviser and not be fooled by fancy letters?

Start with the Financial Industry Regulatory Authority (FINRA), for two reasons. It has an online directory of professional designations that informs you of the certifying organization, education and experience requirements, disciplinary processes against holders and how to file a complaint. Its "BrokerCheck" is another go-to free service where you can check licenses, firm affiliation and other important information on financial advisers.

But you should realize that brokers and their firms can sometimes get past actions against them expunged from FINRA records. So after BrokerCheck, go the extra mile by also visiting:

PACER.gov, which stands for Public Access to Court Electronic Records. You can check federal court dockets to determine whether an adviser or firm has ever been sued for such things as fraud or has ever filed for bankruptcy.

• Your state securities regulator. Locate yours at the website of the North American Securities Administrators Association, then ask for the broker's Central Registration Depository (CRD) document, which may include expunged disciplinary records, regulatory exam history and scores, and a detailed work history. Pay special attention to employment history; an adviser who frequently changes jobs could indicate someone who doesn't follow the rules.

• The office of the secretary of state of the state where the firm is headquartered. If the firm is not licensed with that agency's corporations department, or records show frequent name changes, suspect a fly-by-night.

• The county courthouse. Public computers there may reveal civil and criminal lawsuits filed by individual investors. That's important because federal lawsuits are typically for mass-victim investment swindles, not smaller hit-and-run scams in your area.

Get other tips to prevent financial fraud at this AARP Web page and learn "how to listen" at free lunch seminars to protect yourself. 

Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.

Also of interest:

Remember to go to the AARP home page every day for tips on keeping healthy and sharp, and great deals.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Homeowners Insurance
Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.