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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.

"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:, 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.

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