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Will the real investment professional please stand up?

Some new players in the wealth management industry are granting themselves the title of investment advisor. The problem is, they don't have the credentials to operate under these terms. With the increased use of the term, the line between who is a real advisor and who isn't has become blurred.

Even though investor trust has actually improved since the global financial crisis and the days when convicted fraudster Bernie Madoff was front-page news, there is still a lot of angst regarding financial professionals.

Look no further than Hollywood and the recent George Clooney movie "Money Monster" as another example that society at large thinks the game is rigged and that retail investors can't get a fair shake, no matter whom they turn to.

Financial advisor financial district
Christian Hartmann | Reuters

With more people using titles defining themselves as financial advisors, a larger issue about the terminology investment professionals use has arisen. Type the term "fiduciary duty" into a Google search and you'll get the following explanation: "A fiduciary duty is a legal duty to act solely in another party's interests."

However, a recent survey revealed only 18 percent of Americans know what the word "fiduciary" even means. This lack of understanding can be costly for investors.

All too often, financial services participants bombard investors with jargon that leads to greater confusion and misunderstanding. To make matters worse, this lingo makes it difficult to distinguish between genuine investment professionals and salespeople with inherent conflicts of interest and lack of training.

According to a recent survey on investor trust, investors are not able to make clear distinctions between the different parts of the financial services industry. For example, the difference in perceived trust between an independent financial advisor and a full-service broker is 9 percent.

The difference in trust between a financial planner and brokers is an even tighter 3 percent. That's a small gap in trust between what could be a credible investment professional and a falsely incentivized salesman pushing ill-suited products for a fat commission.

"Frankly, not all investment professionals have the knowledge, experience or credentials required to provide a holistic financial approach that will help investors reach their retirement goals."

So what's in a title? Apparently, not very much value, if everyone can use it.

It's clear that investors don't understand that different titles mean different levels of service and financial advice. Frankly, not all investment professionals have the knowledge, experience or credentials required to provide a holistic financial approach that will help investors reach their retirement goals.

And while credentials are important, they aren't all the same. I would argue that many financial planners, for example, can be compared to cruise ship directors.

They can tell you where the restaurants and pools are located, the unique amenities of your cabin and which ballroom the gala is taking place. But for as much as they know about the ship, they aren't in a position to steer it.

Financial planners know a little bit about everything related to investment management, but do they really have the in-depth knowledge needed to steer you comfortably to retirement? Put another way, who would you rather have managing your money: a generalist or someone with an in-depth knowledge of investment management?

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Job titles aside, there are a few things a savvy investor should look for in an investment professional. Make sure the person is properly trained and qualified, bound by a code of ethics and transparent about how they are compensated. They must also be dedicated to achieving your investment outcomes.

Most importantly, your investment interests should be paramount. To that point, May was actually named "Putting Investors First Month" by the CFA Institute to reinforce the notion that investment professionals have a responsibility to put their clients' needs above all else.

I realize some may scoff at the notion of a month dedicated to wealth management professionals putting investors' interests first. "Shouldn't they already be doing this?" you might ask. They should, and you should feel like your interests and futures are safe with the professionals you employ. Perhaps one day you will.

— By John Bowman, managing director for Americas, CFA Institute