Understanding FINRA Designations

The financial industry is a vast space, filled with many specialized firms, businesses, and experts. It can be daunting for a professional, let alone an informed layperson. Navigating the world of finance involves an understanding of the roles the various professionals involved play, a key indicator of which is the FINRA designation or designations attached to them. This is an important step in vetting the professional you’re considering working with, and in understanding what you can expect from various financial industry professionals.

What Are FINRA Designations?

FINRA—the Financial Industry Regulatory Authority—is a private organization which acts as a self-regulatory organization for brokerage firms, exchange markets, and the like. It is the private sector counterpart to the SEC, and issues a number of professional designations. These FINRA designations, which often appear as a string of letters after the person’s name, indicate professional certifications and qualifications or professional affiliations. Some FINRA designations require extensive professional training and certification; some merely indicate affiliation with a particular organization. Understanding the FINRA designations held by a particular professional is a vital step in deciding whether or not a particular individual is the right one to meet your needs.

Vetting FINRA Designations

So how do you vet and evaluate FINRA Designations? There are over 200 of them, and wading through them all can be an endeavor. Fortunately FINRA makes a database of all its designations available online, so you can easily decode the alphabet soup attached to a financial professional’s name. While doing so, there are a handful of things you should bear in mind about FINRA, FINRA designations, and what they mean for you the investor/client:

  • FINRA distinguishes between registration or licensure and holding a professional designation. Registration with an accredited regulatory body is a requirement for any professional providing financial advice or conducting sales activities. While standards vary depending on the role a given professional plays, it’s generally fairly easy to check on someone’s registration. Brokers, for instance, are all listed on FINRA BrokerCheck.
  • FINRA has many designations; make sure you choose a financial professional with the right ones. As we discussed above, FINRA designations can indicate many different things. Checking on a potential broker or adviser’s designations to make sure that they have the qualifications you need is a must before you entrust them with your financial life. Fraudulent or faked designations are rare but not unheard of, so make sure you double-check their professional affiliations.
  • Asking the right questions goes a long way toward establishing whether or not a financial or investment professional is the right person to fill your needs. “Do you have experience working with clients like me?” can be the lead-in to an enlightening conversation. Likewise, asking them to explain their professional licenses, FINRA/SEC registration, and professional background are all critical steps in determining whether or not it’s worth moving forward. As with all professionals, be wary of anyone who balks at such normal professional questions; their reluctance is an indication something is amiss.
  • Shopping around is always a good idea. There is a myriad of financial and investment professionals out there, and it may take time to find the right one for you. By meeting with a number of different individuals or firms, you can best find the perfect choice to handle your investment needs.

Your financial life and future are a key component to your overall happiness and well-being. Putting your money in the hands of a trustworthy professional is a big step towards peace of mind. Understanding and vetting a financial pro’s FINRA designations is part of that, so take the time to learn a bit about them before committing yourself.

Scroll to Top