Saturday, 16 May 2015

Your Cheat Sheet to Financial Professionals

  • By Henry Truc
What is a financial professional? The term loosely covers anyone that works in an industry dealing with, well, finance. This could be someone as prominent as a stock broker on Wall Street or someone as common as your local insurance agent or tax accountant. Knowing the area of expertise each one deals with will help you pinpoint the right hire to help you meet your financial goals. After all, you wouldn’t have your insurance representative do your taxes or your CPA accountant picking your stocks.
The following is a simple break down of five of the most common industry professionals working in finance. While some responsibilities do blend together and some professionals do double dip in expertise, this guide should help clarify where each professional fits in the world of finance.

Financial Planner

While their services vary widely, most financial planners review the whole of a client’s monetary situation and devise a strategy for accomplishing their savings, debt and investing goals. They also help serve as an investment manager to plan for major expenditures like retirement, college or a home purchase. They may make recommendations for investment products and services that will assist in achieving these milestones.
Credentials: The most common certification that designates a qualified financial planner is a CFP credential. In order to become a Certified Financial Planner, a person must hold a Bachelors degree, obtain at least three years of financial planning experience, complete a CFP Board-Registered Education Program and pass a three-part, 10-hour exam. Continuing education is required to maintain certification.
  • Strong interpersonal skills
  • Sales ability
  • Familiarity with legal restrictions and laws regarding retirement plans, tax shelters, insurance and trusts
  • Understanding of complex mathematical concepts, budgets and financial and legal documents
What to Look for: There is no state or federal law that requires a person claiming to be a financial planner to actually be certified. For this reason, you should only hire a professional that has credentials and can provide references.
The CFP Board can be contacted regarding inquiries about particular individuals. In addition to receiving certification, qualified financial planners are registered with the SEC or the state securities commission where the business is located. You should also determine if your financial planner has taken a fiduciary oath to “to act in good faith and in the best interests of the client.” Financial planners are either compensated through fee-only or commission structures.

Financial Analyst

Businessman Diagramming Economics
Financial analysts are also known as security analysts or investment analysts. They work for banks, insurance companies, securities firms and other institutions examining financial data to help a company and their clients make investment decisions. The primary duty of most financial analysts is to perform extensive research, write reports and create presentations based on these results to aid in determining the value and appropriate action on investments.
Credentials: It’s recommended that analysts obtain a Masters degree in business administration (MBA) in addition to their Bachelors degree. Analysts may also receive certification by the CFA Institute in the form of a Chartered Financial Analyst designation.
In addition to holding a degree, Chartered Financial Analyst candidates are required to pass three exams that cover topics like accounting, economics and security analysis, and have four years of qualified, professional work experience. CFA charterholders are also obligated to adhere to a strict Code of Ethics and Standards.
  • Analytical, mathematical and problem-solving skills
  • Advanced knowledge of statistical software and spreadsheets
  • Ability to communicate complex financial ideas simply
  • Motivated to seek out obscure information
  • Possesses in-depth knowledge of the economy, tax laws and markets
What to Look For: Financial analysts are generally employed by institutions rather than individual investors, but you may still be interested in who is making recommendations for your portfolio within a firm. The combination of education, experience and success record will determine how qualified a particular analyst is and a designation as a CFA is seen as a key certification for financial analysts.


Accountants keep track of money. Most have a specialty: Public accountants work for public accounting companies and do accounting, auditing, tax and consulting work. Management accountants keep track of the money earned and spent by the companies they are employed with. Government accountants ensure sure that government accounting records are correct and review the records of people doing business with the government. You can also find individual accountants to help you with your money records and taxes.
Credentials: A Bachelors degree in accounting is usually the minimum education requirement. Masters degrees in accounting or business with a concentration in accounting are also available. Any accountant that files a report with the Securities and Exchange Commission must be credentialed as a Certified Public Accountant. Obtaining certification as a CPA requires (in 46 states) completion of an extra 30 hours of related undergraduate college coursework.
  • Knowledge of finance, accounting, budgeting and cost control principles
  • Proficiency with financial and accounting software
  • Extensive knowledge of federal and state financial regulations
  • Ability to analyze financial data and communicate effectively through financial reports, statements and projections
What to Look For: It is not necessary for an accountant to be certified, so any additional professional designation is demonstrative of advanced knowledge in their field. A CPA is probably the most well-known designation, yet many other special certifications may be obtained by accountants depending upon their particular focus. One such example is the Certified Management Accountant title conferred by The Institute of Management Accountants.


Stockbrokers work privately or for stock brokerage houses. They seek out and assist retail clients, including both corporations and individuals, in determining the best investments based on their interpretation of financial data provided by analysts. They then facilitate the transaction on the client’s behalf. Additionally, stockbrokers develop investment plans for clients, maintain records, monitor transactions and review financial reports.
Credentials: While a college degree is not necessarily required, most stockbrokers have one. Many also pursue MBAs, especially for high-level positions. It is required that they are licensed by passing the General Securities Registered Representative Examination, also known as the Series 7. Many states require stockbrokers to pass the Uniform Securities Agents State Law Examination as well.
  • Excellent interpersonal and communication skills
  • Ability to identify market trends and how they affect investments like stocks or bonds
  • Comprehensive understanding of financial health of investments, balance sheets, P/E ratios, etc.
  • Recognition skills of unique investment opportunities
What to Look For: Personal qualities and skills are often considered to be even more important than academic training. The track record of the stockbroker is also important. Since they are often entrusted with large sums of money and sensitive information, it is especially important that you trust your stockbroker. Like a financial advisor, you need to determine whether their motivations are dictated by their commission structure or helping you build wealth.

Insurance Agent

Insurance agents are generally the first point of contact between an individual, family or business and an insurance company. They specialize in one or several types of insurance, including life insurance, health insurance and property or home insurance. Insurance agents search for new clients and assist them in selecting an insurance policy. Captive agents work on the behalf of a single company while insurance brokers match the best policy with their client among several insurance companies they represent.
Credentials: The most important aspect of being an insurance agent is sales. Some insurance agents only have a high school education with a proven ability in sales while others obtain a college degree in business, economics or finance. A few schools offer specific Bachelors degrees in the field of insurance. Insurance agents learn most of their skills by shadowing other agents, however. Additionally, most states mandate licensure and ongoing education every two years.
  • Sales expertise
  • Specialized knowledge of particular insurance type
  • Aptitude for explaining highly technical concepts
  • Ability and desire to stay up-to-date on constantly changing industry and coverage policies
What to Look For: All agents are required to be licensed to sell insurance in whatever state(s) they work. Separate licenses are needed for every type of insurance policy being sold. Most states require that an agent complete coursework and pass an examination before receiving a license. Be sure that any insurance agent you work with holds a license in their particular field, whether it be life, health, auto, property insurance, etc. Agents may also receive additional certification or professional designations by organizations such as The National Alliance for Insurance Education and Research.
You can cut down on a lot of confusion and wasted time by going straight to the professional who meets your financial needs. By above guide to match the appropriate person with what you’re looking for, you should have a good start in finding a qualified industry professional.

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