Industry Experts Agree: Financial Services Professionals should Pass Background Checks

When consumers seek to enlist advice about their personal finances, there are many ways to determine whether a financial professional is a good fit. Educational credentials, professional licenses, and a demonstrated track record certainly are important factors to consider. But a further criterion shouldn’t be overlooked: how good are they at personal money management? The National Financial Educators Council (NFEC) recently interviewed financial experts regarding whether they thought anyone seeking employment or promotions in the financial services industry should be able to pass a background check demonstrating that they can manage their own money responsibly.

According to Stephen Rischall of 1080 Financial Group, “I believe it is absolutely necessary for financial professionals to pass a simple financial background check prior to being hired or promoted. Simply put, if you’re in the financial industry and interacting with clients in any way, it’s integral that your financial habits are up to par.” Rischall points out that a background check will help clients avoid financial risk. “If you have a history of not making good financial decisions for yourself, chances are you pose a risk to clients and aren’t suited to help them make good financial decisions either,” he adds.

Conducting a background check also can help balance out the fact that a lot of financial advisor marketing masks the fact that many of these professionals are simply motivated by their own potential commissions. “On a side note,” says Rischall, “Most people in the financial services industry are simply salespeople. The term financial advisor is completely ambiguous and I can go on forever about that.”

“If you’ve ever applied for a job in financial services, such as being an insurance agent or a stock broker, then it is likely that you were asked to complete a financial background check,” comments Brad Cummins with Local Life Agents. “When you become a member of the financial or insurance industry, you’ll have access to important client information, such as their income, savings, and retirement accounts…it is essential that all of this is protected.” Cummins thinks many financial services companies want to know their employees are able to handle money appropriately, which is why they often perform financial background checks on applicants. “Your credit is also a factor,” he added. “In fact, having good credit can be extremely important – especially if you are trying to become appointed with an insurance carrier.

“If you have a low credit score and/or you have collections on your record, the insurer may not provide you with an agent code, and may not appoint you as an agent,” Cummins says. “So it definitely pays to keep your credit clean and in good standing.”

Staying on top of one’s credit score and demonstrating wise personal money management can have an impact on one’s ability to gain employment or promotion in many fields, but those in financial professions have a particular need to shine in this area.


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