Last week in the trusted advisor we discussed the emotional aspects of building trust. A trusted advisor doesn't happen overnight; trust has to be earned and deserved. When you, as an investor are seeking advice, ideally you want someone who understands your interests and who will not put his or her own interest ahead of yours while working for you.

A trusted advisor then is someone who has earned your trust, will build a relationship with you and can give advice effectively.

Trustworthiness equals credibility + reliability + intimacy divided by self-interest.

Credible means I can trust what my advisor says because he knows what he/she is doing. Reliable means that my advisor is experienced, has professional standards, and will follow through with complete actions. Intimacy means you feel comfortable discussing difficult personal issues with your advisor. Self-Interest means your advisor always puts your interest first.

The Trust equation has multiple dimensions. You might trust someone's expertise, but distrust profoundly that person's motive. You might find an advisor brilliant, but totally self-absorbed. Conversely, you might trust someone implicitly, but have little confidence in their abilities.

How does one become a credible professional? Those with the highest respect quotient doctors, dentists, attorneys and pharmacists must undergo mandatory rigorous post-graduate coursework, years of practical experience as well as difficult exams in order to earn a license, and then ethics and continuing education are ongoing. Those diplomas and licenses on the wall communicate to all their clients that their skills have been certified. One never hears about going to an almost doctor, or almost lawyer. Either you are, or you ain't!

We recently presented a finance workshop to the Hamilton Fire Station Recruits Staff under the able leadership of Lt. Ralph Scott and Sgt. Colin Swan. These gentlemen are all true professionals committed to serving their community. When we arrived in 90 degree heat, the entire group was running training drills with extremely heavy fire apparatus while dressed in full Kevlar fire gear, including masks and helmets. Surprise, they train every day, physically, and mentally - and it is mandatory. Lose the edge, lose your position.

Now let's compare these professionals' level of training and education to the investment industry. Nowhere have so many been allowed to work with other people's money with so little training, education standards, or licensing. In the real world, appropriate management of a client's finances is as important as maintaining a client's health.

In the United States, the bare minimum standard for working in the securities industry is passing the NASD Series 7. Education is not required; ongoing training is not required; standards, such as a thorough understanding of the responsibilities of a fiduciary, are not required. And it has been like this for decades; lately, with recent broker scandals, there is some talk of mandating definition of skill levels.

In Bermuda the minimum individual investment advisor standard is not clear. The Bermuda Investment Business Act says that financial advisors leaving it up to each investment firm to interpret what that means for their staff. That said, how can the general public understand what suitably qualified means? The answer is that they can't because there is no definable mandatory minimum standard for all individuals employed in the investment advisory services industry.

True professionals have never worried about minimum standards. They will always want to challenge themselves to create a higher definable credibility - by putting their reputations, their skills, and sometimes, their jobs on the line. Voluntarily seeking to elevate their professional standing within the community, they will submit themselves to years of self-study courses, tough exams, even several years of supervision at lower salaries before being allowed to practice with a license that exemplifies their experience. It is a testimony to their commitment to their clients and their own personal code of ethics that they voluntarily stress test themselves to such limits. Many candidates have failed these types of exams countless times, but have persevered and ultimately, triumphed in the end.

Listed below are the most common finance and investment credentials.

This designation is awarded by the CFA Instituted to experienced financial analysts who successfully pass three annual examinations covering economics, financial accounting, portfolio management, securities analysis and ethics, have approved work experience and meet other requirements. CFA charterholders are annually required to affirm their commitment to high ethical standards.

The CFP? and certification marks are financial planning credentials awarded by Certified Financial Planner Board of Standards Inc. (CFP Board) to individuals who meet education, examination, experience and ethics requirements. CFP certificants must complete education requirements and an ethics exam on an annual basis.

The Institute of Business and Finance (IBF) offers this designation to financial services professionals who successfully complete its 60-hour course, pass a comprehensive exam, adhere to the IBF's code of ethics and complete 15 hours of continuing education courses each year.

The CLU designation is awarded to insurance and financial services professionals who have met a three-year business experience requirement, passed eight college-level education courses and agreed to abide by a code of ethics.

The CPA designation is awarded by the American Institute of Certified Public Accountants (AICPA) to accountants who pass the AICPA's Uniform CPA Examination and satisfy the work experience and statutory and licensing requirements of the state(s) in which they practice.

The CA designation is awarded by various other country accountancy bodies to accountants who pass the CA Examination and satisfy the work experience and statutory and licensing requirements of the province or country in which they practice.

These professionals are impressive and they should be. The question is, what do you want in a trusted advisor. After all, it is your choice.