April 7, 1999

Wall Street Credentials

Perhaps you were wondering what the alphabet soup following that very Wise-looking person's name meant. Or maybe you're someone interested in jumping into a career in the investment field and aren't sure which paths to pursue. Enter the Fool's guide to Wall Street Credentials, an easy-to-read overview of what all those fancy letters mean and how you earn the privilege of using them.

In this special, we review some of the most common academic degrees, professional designations, and licenses used in the world of investing. Some credentials can be easily attained in a number of days with minimal experience while others are extremely difficult to receive and take years of study. If you're interacting with investment professionals, it's important for you to know the difference between the impressive and not-so-impressive credentials those in the industry carry.

The credentials covered in this special include:

CFA -- Chartered Financial Analyst
CFP -- Certified Financial Planner
ChFC -- Chartered Financial Consultant
CPA -- Certified Public Accountant
MBA -- Master of Business Administration
RIA -- Registered Investment Adviser
RR -- Registered Representative

Needless to say, there are literally dozens of professional credentials in the investment industry, and not all are covered here. Some of the credentials not described but listed here for reference include:

AAMS -- Accredited Asset Management Specialist
CFM -- Certified Financial Manager
CIC -- Chartered Investment Counselor
CIMA -- Certified Investment Management Analyst
CLU -- Chartered Life Underwriter
CMA -- Certified Management Accountant
CMC -- Certified Management Consultant
CMFC -- Chartered Mutual Fund Counselor
CMT -- Chartered Market Technician
CPCU -- Chartered Property Casualty Underwriter
PFS -- Personal Financial Specialist
REBC -- Registered Employee Benefits Consultant
RHU -- Registered Health Underwriter

Of course, credentials don't tell the whole story of how much skill an investment professional possesses. One of the most important credentials is often overlooked -- experience. Be sure to ask a professional what sort of work experience gives him the skills needed to effectively provide his service.

The bottom line is that if you're using and paying for the services of a financial professional, make sure that those you are trusting with your money are qualified to do the job correctly. Hopefully this special will make your research that much easier.

-- Paul Larson (TMFParlay@aol.com)

Next -- Chartered Financial Analyst (CFA)