Regulated Credentials

Regulated credentials are licenses or appointments issued by a state or federal entity. Licenses require a test, however appointments do not. Both require the payment of state or federal fees. Regulated credentials typically vary from state to state regarding their requirements for continuing education, however, be aware most of the continuing education does very little for increasing an individuals skill level. Testing for Licenses vary in difficulty. Typically securities (investment) licensing is more difficult than insurance or mortgage licensing/appointments, and securities licenses themselves vary in difficulty. In addition, there are no educational or experience requirements to obtain a license or appointment. The good thing about these licenses is that a license will be removed from an individual for improper action.

Standards of Behavior

You should know that there are different standards of behavior which are considered acceptable for different licenses. Typically, securities licenses require more stringent requirements by the licencee than others, but within the securities licensing arena there are differences as well. Individuals holding a Series 66 or the two Series 65 and Series 63 are held to the highest standards for client advisement. This is because these individuals are considered advisors rather than salespeople. What this really means is that if your adivsor isn’t fee-based and licensed as an advisor, your interests may come second. Business Week magazine published an article on April 11, 2005, stating “If your broker is employed by a brokerage firm, your interests come second.” Most of the public has no idea that there is a difference, but Investment Advisors are held to a different standard than Registered Representatives, even if the Registered Representative is working on a fee basis.

Select the link above to better understand how your financial representative may or may not meet the fiduciary standard, which differentiates the industry.