Cohen and Barry Berg, of Maplewood, N.J., handled their
own finances for years. But when their special-needs
son, Julian, turned 18 in 2013, they had a docket of
financial decisions to make for the young man, born with
Fragile X syndrome. They reached beyond their circle of
advisers, which included a lawyer, accountant and
steps into the world of personal finance, though, and
the couple was knee-deep in acronyms, deciphering the
dozens of letter combinations behind advisers’ names.
No wonder so many consumers say the result is TMI (too
was lucky, she said, because she found a Lincolnshire,
Ill.-based advocacy company, Protected Tomorrows Inc.,
that rallied a team. Its CFP (certified financial
planner), Mary Anne Ehlert, helped them build a
financial plan and point them to people who know their
stuff, including a CLU (certified life underwriter) to
draft a "second-to-die" life insurance policy
that will kick in if Julian outlives his parents, and a
CPA (certified public accountant) to file tax returns
for Julian’s special-needs trust. The organization
also linked them to an attorney who knows special-needs
law and social workers who navigate Social Security.
you need a team as large as Cohen’s, your first order
of business is to determine your financial needs. As you
shop professionals, "Understand that many generic
terms like ‘wealth manager’ and ‘investment
counselor’ don’t mean much," said Michael
Branham, an Edina, Minn., CFP and chairman of the
Financial Planning Association. It is the letters after
their names that tell you if outside organizations have
given them stamps of approval.
can’t just hang up a shingle and say you’re a ‘CFP,’
for example," Branham said. "You have to have
been in the field first, have continuing education,
abide by a code of ethics and pass the right
CFP is a good starting point, Branham said, because he
or she "looks at your total financial picture and
goals and helps you put together a plan."
you meet with your planner when you begin your career,
Branham said. "Then, your plan is in place when
life happens, like marriage, divorce, disability, death
of a spouse or birth of a child," he said.
your adviser is a "fee-only planner," he
charges you a fee instead of taking commissions for
products. It could be a flat fee or a percentage of your
assets, explained Ken Eaton, an Overland Park, Kan., CFP,
but the fee-only adviser has "no other masters to
serve" other than you, his client.
CFP is more likely to work directly with the consumer
than a CFA (chartered financial analyst), but many
planners wear both badges. Or, your planner could be a
ChFC (chartered financial consultant).
they make for busy business cards, additional initials
tell you their specialties. "You don’t go to a
podiatrist for heart disease," Ehlert said.
"So why would you go to any financial planner with
any financial question?"
CTFA (certified trust and financial adviser) focuses on
your trusts, while a CFDP (certified financial divorce
practitioner) helps you pre- and post-divorce. If your
parents will need long-term care, take them to a CASL
(chartered adviser for senior living) or RFG (registered
his public pledge to leave his money to charities, Sting
might have consulted a CAP (chartered adviser in
philanthropy). After he wraps his last tour, he could
see a CRPC (chartered retirement planning counselor).
up. If you only want help juggling your investments, you
might employ someone who labels himself an "asset
manager" or "portfolio manager," although
these are vague terms.
term "investment adviser" is a legal term for
someone registered with the SEC (Securities and Exchange
Commission) or your state securities regulator.
tossed about informally, the term
"broker-dealer" refers to a person or company
that buys/sells securities, and a "broker" is
a person who buys/sells on your behalf. Technically, he
is a "registered representative." The firm may
call itself "full-service" or
"discount." Using the latter is cheaper but
means you do your own research.
venture beyond vanilla stocks and bonds, consult a CAIA
(chartered alternative investment analyst).
planning. A CPA or an EA (enrolled agent) can help you
file your taxes, but many EAs specialize in resolving
disputes with the IRS. A CMA (certified management
accountant) focuses more on business analyses than
don’t have to be rich to benefit from trusts and
estate planning, which call for the addition of a
lawyer, whose initials may include JD (Juris Doctor) or
LLM (Master of Laws degree). The latter gives him
international credibility. If you’re an entrepreneur
with a new business plan, you may consult an MBA (Master
of Business Administration).
if you understand the basics of home, health and auto
insurance, your financial plan may call for trickier
insurance products such as annuities, life insurance,
disability income or long-term-care insurance. The CLU
acronym is the gold standard here.
behind the curtain. The number of initials after a
professional’s name does not necessarily mean he is
better than the next one. In a rural area, he may be a
jack-of-all-trades. In an urban area, he’s more likely
to be part of a larger firm, where you meet with
different people as your life transitions.
in doubt, track the initials back to the groups that
bestow them and keep track of which ones have gone
Bernard Madoff. Many come from the College for Financial
Planning, but sources also include colleges and
government entities. Some blur the lines, like FINRA
(Financial Industry Regulatory Authority), the
independent nonprofit authorized by Congress to watchdog
a financial adviser offers a free initial session so you
can determine if you want a long-term relationship with
him. This is your money. So, regardless of his other
initials, your adviser should at least earn your