Titles in this industry can be deceiving. Take "financial advisor," for example. It has served the test of time, but is it accurate in today's market? I don't think so. In fact, I think a more realistic and better-understood title for the same job now is "professor."

Indeed, you need to be doing research constantly. You are always preparing lectures to clients as their primary educator in the areas of financial and investment planning. And you often teach the same lesson over and over until your "students" fully comprehend it.

An oversimplification? Not really. I contend we cannot do enough to educate our prospects and clients. The more they know about the investment alternatives and financial planning services we offer them, the better their ability to make important and complex decisions—and to work with us going forward.

The importance of continual education was driven home recently when I read a paper on the principles for managing the relationship between distributors and individual investors when offering structured products. The paper was released by the Joint Association Committee, which has representatives from the Securities Industry and Financial Markets Association, European Securitisation Forum, International Capital Market Association, International Swaps and Derivatives Association and London Investment Banking Association.

One conclusion the committee drew is that there is no connection between product complexity and investment risk. Complex products may be low-risk and simpler products may be high-risk. What's important is that an investor understand the role that a product plays in an investment strategy, the paper said.

So, professors, that's the lesson of the day. We need to ensure that all of our students fully grasp the purpose of every product and investment strategy we present to them.

Fortunately, the committee's paper makes a fine syllabus, outlining the key areas that need to be addressed not only for structured products, but for a wide range of financial planning alternatives.

For transparency, you should ensure that the material features of any product or strategy are clearly shown in all marketing materials and presentations. Also, investors should understand the risks, as well as the fees and costs, before agreeing to any investment or strategy. Discuss potential conflicts in investments generated by your firm or an affiliate. You should, where applicable, tell clients about credit ratings, and fully explain liquidity and the existence of a secondary market (or lack thereof). Finally, be sure to discuss the suitability of a product, as well as the tax implications. Potential taxes must be revealed and factored into the overall return-expectation level to ensure the investment's goals are realistic.

I have long advocated that clients sign short letters to acknowledge that they understand the structure of the financial planning strategy or investment being introduced-and the corresponding risks. Just in case there is ever arbitration on a particular investment, these letters should be kept in the client's file to verify that the client understood the lecture.

There is another benefit to be had by taking the track of educator: You will find that you spend quality time bonding with prospects and clients, developing the trust and confidence necessary for maintaining strong, long-term relationships.

Larry Silver, director of marketing at Raymond James Financial until his retirement, writes about investment-firm practices from Oldsmar, Fla. He can be reached at lsilvermarketing@yahoo.com.