Look for top credentials when you’re searching for a financial planner. "Senior" isn’t enough.

Feeling popular? Judging by the explosion of financial planners sporting such titles as "retirement specialist" or "senior adviser" as part of their credentials, you should feel highly sought after. Planners want your business.

Most of these credentials are so new that it’s difficult to know what to make of them. Should you feel comforted because a planner is a Certified Senior Advisor? How about a Chartered Advisor for Senior Living? Or should you look for a Registered Financial Gerontologist or a Certified Retirement Financial Advisor?

As usual, the answer is that it depends. Alone, none of these newly minted designations tells you very much about a planner’s experience and competence.

The Gold Standards

With financial planners in general, the credentials are more clear-cut. The top designations in the profession are Certified Financial Planner (CFP) and Personal Financial Specialist (PFS). Someone who’s earned either designation has received extensive education in the field, taken rigorous exams, had years of experience, and demonstrated high ethical standards.
Certified Financial Planner designations are granted by the nonprofit CFP Board of Standards. To qualify, planners must take a series of courses that requires two years to complete. Then, they must pass a ten-hour exam that stretches over two days (only 55% passed the exam last March). Besides a broad range of financial topics, the exam covers retirement issues in depth, from Medicare to annuities and estate planning. Planners must also have three years of financial-planning work experience. Once they have obtained the CFP designation, practicing planners must continue their education by taking preapproved courses to maintain their status. Currently, there are more than 44,000 CFPs.

The CFP Board conducts a background check of applicants, and its staff routinely monitors CFPs for adherence to the board’s code of ethics. In 2003, for example, the board revoked the CFP designation of three planners and suspended 17 others. The board routinely issues news releases naming planners found to have violated the ethics code and posts them on its Web site (www.cfp.net). You can also check on a planner’s disciplinary history at www.cfp.net/search, or by calling 888-237-6275.

Personal Financial Specialist designations are granted by the nonprofit American Institute of Certified Public Accountants (AICPA). To qualify, a planner must be a licensed CPA and an AICPA member. CPA licenses are issued by the states and U.S. territories. Each CPA candidate must pass a uniform exam that lasts 14 hours and covers topics ranging from audits to financial accounting. To have a chance of passing, candidates generally must have taken college-level accounting courses (15% pass on their first attempt).

CPAs who hold the PFS credential have passed the AICPA’s six-hour exam, which covers a broad range of personal-finance issues, and must subsequently take continuing education courses. The designation also requires at least one year of experience helping individuals with their finances. The AICPA has 340,000 members, of which 3,240 have the PFS designation.

The group polices its own members and publishes the names of those who lose their CPA licenses. In 2002, 75 members of the organization were expelled or suspended. You can read news releases reporting disciplinary actions on the group’s Web site at www.aicpa.org (click on "Disciplinary Actions" in the left-hand column) and check up on a specific individual by name.

To find a PFS near you, visit www.cpapfs.org, or call 888-999-9256.

The "Senior" Credentials

Given the oncoming wave of baby-boomer retirees, it’s no surprise that an increasing number of financial planners are touting their special "senior" expertise. Four varieties of senior specialist are described below.

Certified Senior Advisor (CSA). More than 14,000 people have received this designation from the Society of Certified Senior Advisors. The society is a for-profit company whose principal owner is Edwin Pittock, the past president of a company that sells discount-program memberships to seniors for prescription drugs and other health-care services. The CSA program is open to anyone, from financial planners to social workers, doctors and clergy. Requirements include three days of classes, followed by a multiple-choice exam (90% of applicants pass). Class topics range from Alzheimer’s disease to taxes, housing, long-term care and marketing. A disciplinary board reviews consumer complaints, says Pittock, but it does not make the results public. Last year, the society revoked the CSA designation of seven people for ethical breaches, he says. Continuing education is required to maintain the designation. To verify a CSA’s designation, call 800-653-1785, or visit www.society-csa.com.

Chartered Advisor for Senior Living (CASL). This new designation is offered by the American College, a nonprofit educational institution that also confers designations in related fields, such as the Chartered Life Underwriter (CLU), an insurance-business credential. The first CASL credentials will be conferred in October. Although the designation is geared to financial planners and health-care professionals such as doctors, anyone with three years of related professional experience is eligible. Candidates take about one year to complete the school’s five college-level courses on topics ranging from estate planning to long-term-care financing. They then must pass a two-hour multiple-choice exam. Thereafter, the college requires CASL designees to take continuing-education courses. It investigates consumer complaints and acts on them but handles the process privately. The college does not currently have a way to refer consumers to planners with a CASL designation, but plans to shortly.

Registered Financial Gerontologist (RFG). The American Institute of Financial Gerontology is a for-profit company that started offering the RFG designation in March 2003. Its president, John Migliaccio, also runs a New York-based marketing consulting firm that focuses on older consumers. The American Society on Aging, a nonprofit association of professionals who work with older people, is a partner in the institute. To earn the RFG designation, a candidate must first have financial work experience or hold another personal-finance designation, such as CFP. In addition, candidates must take six four-hour courses on topics ranging from long-term-care issues to ethics and marketing, and pass a two-hour multiple-choice exam (about 85% of the candidates pass on their first attempt). The institute requires continuing education. It follows up on consumer complaints but handles the disciplinary process privately. You can verify a planner’s RFG credentials by calling 888-367-8470 or by sending an e-mail to info@aifg.org. Its Web site is www.aifg.org.

Certified Retirement Financial Advisor (CRFA™). This designation is conferred by the Society of Certified Retirement Financial Advisors, a for-profit company started in 2003 by Larry Klein, an investment adviser and former brokerage branch manager. Requirements include three days of classes, with two days devoted to taxes, investments and estate planning, and the third day to marketing topics such as direct mail and public relations. Sixty-five people took the first classes offered last June. Although the program is designed for financial professionals, it’s open to anyone. Successful candidates must achieve an 80% score on a four-hour exam and take continuing-education classes. No disciplinary process is currently in place. For more information, see www.crfa.us, or call 888-880-2732.

Ask Probing Questions

Interview several financial planners before you choose one. Their basic CFP or PFS credentials and forthright answers to your questions will tell you more about their skills than any other designations. Ask them:

Do you work frequently with older clients? You need a planner who has broad experience advising retirees on important issues such as long-term-care insurance, taxes and estate planning.

Will you be the only person working with me? If not, it’s important for you to meet the other planners who will work with you. Also, ask whom the planner will refer you to for complex legal issues such as estate planning.

What is your fee structure and how much do you typically charge? The planner may earn commissions from selling you financial products or charge fees based on an hourly rate, a flat rate or a percentage of your assets. For the names of fee-only financial planners near you, contact the National Association of Personal Financial Advisors (800-366-2732; www.napfa.org).

May I read your Form ADV? Financial advisers who manage a total of more than $25 million must file this form with the Securities and Exchange Commission. It lists any disciplinary actions and describes how the planner is paid. Although the form is available online at www.adviserinfo.sec.gov, asking the planner for it will give you an insight into how forthcoming he or she is.

© 2007 The Kiplinger Washington Editors, Inc. All Rights Reserved. Published in Kiplinger's Retirement Report, September 2004. To subscribe to the Retirement Report, go to www.kiplinger.com/retreport or call (800) 544-0155.