Don't judge an adviser by his title

A bad time for retirement?

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(Money Magazine) -- When you are fearful about the safety of your money, you tend to be more vulnerable to unscrupulous salespeople posing as trustworthy advisers. So a recent crackdown on dubious retirement credentials couldn't have come at a better time.

Earlier this year, state insurance and securities regulators approved model regulations that will prevent advisers from implying they have expertise about retirement planning that they don't actually have.

The new regs will make it illegal for advisers to tout made-up or self-conferred designations, or credentials that are real but granted by organizations that don't set rigorous standards.

That said, it may take well into 2009 before most states adopt them. And no regulations can totally eliminate abuses. You still have to exercise caution when you seek retirement advice. Here's how.

Given the dozens of official-sounding titles floating around, it's virtually impossible to know which are marketing gimmicks, which are legitimate and which fall in between. I'd view any credential that contains words like senior or retirement with skepticism.

Earlier this year, a reader e-mailed me to say he'd met with an adviser with a Wharton Certificate in Retirement Planning. How much credence should he give it?

What I found is that the certificate is available only to advisers affiliated with the insurer AXA who attend a five-day program at the Wharton School. There's no final exam, no grade. I don't want to suggest that the program is a sham. It is taught by Wharton professors, and AXA sends only experienced advisers. Then again, it's not exactly a Wharton M.B.A.

When a designation does connote a special skill, consider how relevant that expertise is. The Certified Senior Advisor designation, while legit, is largely meaningless as a gauge of retirement planning proficiency.

Why? Its purpose is to increase awareness of the aging process. It requires no special financial training.

Even if an adviser's credentials are beyond reproach, his or her integrity may not be. Before signing on with an adviser, check with your state securities commission (nasaa.org) and state insurance department (naic.org) to see if he or she has a history of disciplinary problems or consumer complaints.

Plus, don't attend free-lunch seminars that target retirees - they are often nothing more than a way for sales-people to peddle high-fee investments. Instead, screen for a planner who concentrates on retirement at the Financial Planning Association's site (fpanet.org).

Older investors are understandably worried about retirement today. Unfortunately, advisers who misrepresent themselves with misleading credentials may also see this as a perfect opportunity to prey on those fears.

Insurance commissioners in several states have recently warned that some advisers are using concerns about the health of insurer AIG to persuade annuity owners to switch into a new annuity.

Such a move can be a great deal for the adviser, who earns a fat commission. But it may not be a wise decision for the investor, since a transfer may trigger early-withdrawal penalties, not to mention start the clock on a new set of surrender charges.

It's during uncertain times like these that you're most likely to seek financial advice. Just make sure you end up with a real adviser, not a salesman with a fancy title posing as one.

Sign up for Updegrave's weekly e-mail newsletter at cnnmoney.com/expert. E-mail him at longview@moneymail.com.