References help in picking out a financial planner

What does it take to be a financial planner? Does someone have to have a special set of intitials after his or her name to be able to tell you the best way to handle your money?

Some readers have asked about the initials ''CFP.'' Shouldn't a real financial planner have these initials? the letters ask.

The short answer is: maybe, maybe not.

CFP stands for certified financial planner. Right now, the only people qualified to use CFP are graduates of the College of Financial Planning, a Denver-based correspondence school offering courses in investments, taxes, insurance, employee benefits, and retirement and estate planning. Another school , Adelphi University in Garden City, N.Y., is waging a legal fight to let graduates of its financial planning program use the CFP initials.

There are several other colleges, including Brigham Young University in Provo , Utah, the American College in Bryn Mawr, Pa., Boston University, San Diego State, and Georgia State University, that have financial planning instruction programs. These schools do not award a CFP, but they do give diplomas or certificates of completion. A few schools award bachelor's or master's degrees in financial planning.

Some of these programs require applicants to have a few years of experience in a related field, such as investing, accounting, tax preparation, or work with an experienced financial planner, before they are accepted into the program.

There are, then, plenty of formal training programs turning out financial planners, and the fact that a person completed one of them does indicate a desire to do the extra work required to earn a diploma or CFP degree. If you are selecting a financial planner for the first time and you have no idea how to compare them, finding one with a legitimate degree might be a good place to start.

But just as a degree in any profession is no guarantee of competency, the lack of a degree in financial planning should not be interpreted automatically as a lack of ability to handle your financial matters. Unlike many other professionals for whom some sort of formal training or license is required to practice - such as dentists, barbers, electricians, and hairdressers--no such degree and certificate are required for financial planners.

There are many competent planners who have no financial planning degrees; they get their experience as tax accountants, securities analysts and dealers, insurance salesmen, real estate brokers, or professional investors. They have often broadened their specialized training to learn about areas where clients might want to invest. (Still, many of these people will continue to favor their former specialties in recommending investments, and you should find out their backgrounds and evaluate their recommendations with this in mind.)

So if you can't go by the degree when you're looking for a financial planner, what guidelines can you use? Experience and references are probably the best places to start. Ask the financial planner how long he has been working, what kinds of investments he has dealt with, and how he was trained. Also ask for several, diverse references who would be willing to talk to you about the kind of results they have had.

A preliminary, exploratory interview (often free) should tell you if the planner understands your financial goals and can suggest a variety of ways to meet them.

Finally, there are two organizations of financial planners whose initials you will see from time to time. One is the International Association of Financial Planners. This Atlanta-based organization includes not only financial planners, but also tax accountants, stockbrokers, lawyers, and anyone else who wants to keep up on the latest nuances of money matters. A person does not need any financial planning credentials, or even need to be a financial planner, to join.

The other is the Institute of Certified Financial Planners. The only people who can be in this Denver organization are graduates of the College of Financial Planning, so membership is as meaningful as the CFP intiials after the planner's name. It may indicate a good financial planner; then again, it may not.