From the November 2006 issue of Boomer Market Advisor • Subscribe!

Buy a Vowel? Which industry designations really carry weight?

The overabundance of industry designations makes it difficult for advisors to separate the proverbial wheat from the chaff. Programs that claim to adhere to strict academic and ethical standards often are little more than a one-day seminar and certificate.

In fact, one company recently offered a course at a Mexico resort destination. After a long weekend of beach volleyball and pin? coladas, the candidate walked away sunburned, hung over and with a new designation on his business card.

Exactly how many designations are currently available to advisors in the financial and retirement planning community?

"We counted 105 as of last week," says Dr. Larry Barton president and CEO of the American College, in Bryn Mawr, Penn. The institution has developed and administers programs for nine such accreditations, including the Financial Services Specialist, Chartered Financial Consultant, Chartered Life Underwriter and others.

Count Barton and Jesse Arman, vice president of academic affairs at the College for Financial Planning, originator of the CFP designation program, among the industry leaders who view the bloated number of advanced designations as troublesome for the financial services profession. Having so many designations, they say, causes confusion, dilutes their perceived value and opens the door to misrepresentation or even outright abuse.

While both agree it's crucial for advisors to have access to educational programs benefit their clients and practices, too often their motivation is simply to gain more marketing traction with prospects and clients.

"It's a Catch-22," says Jill D. Hollander, CFP, principal at Financial Connections Group Inc. in Berkeley, Calif. "It's great to gain an education. But it also opens the door to designations that someone can earn fast and easy."

The ability to earn a designation with minimal study via a program with suspect credentials and educational value has turned the process into "a joke, -- but hardly one worth laughing about," says Barton. "It is an enormously important issue. The industry is going to have to address it and clean up its own act. We need to get the CEOs and vice presidents of training [at financial services companies] to take a good hard look in the mirror and ask, 'Is the goal to have the most designations or the most informed, knowledgeable advisors who do the most for their clients?'"

The test of time
Dr. Gordon Williamson, executive director of La Jolla, Calif.-based Institute of Business and Finance, agrees with Dr. Barton and ensures that his organziation offers substantive designations. The Institute, which he founded in 1988, is perhaps best known for the Certified Fund Specialist.

"The Certified Fund Specialist was the first designation in the mutual fund space," Williamson says. "We tried to fulfill a niche with the CFS. I was disenfranchised with the quality of the educational programs and I wanted to develop one that provided advisors with the practical information to help them explain products and concepts to their clients."

According to Williamson, every year a number of new designations is offered. The question for advisors is how long they'll last.

"The American College, the College for Financial Planning, the Institute of Business and Finance, and even the Certified Senior Advisor -- the designations these organizations offer will be around in 50 years, but most others will not," he says.

The Society of Certified Senior Advisors' CSA designation to which Williamson refers has been striving for industry credibility since its inception in 1996. With 12,000 members, it has taken a unique approach to the professionals it targets.

"The CSA is the only designation that involves multiple professional disciplines," explains Edwin Pittock, the organization's president. "This means that a financial advisor, a nurse, an elder law attorney or anyone else who deals with seniors would be an appropriate candidate. The program is set up to deal effectively with the health, financial and social aspects of aging."

Pittock says the different disciplines can then connect to cross-market their services. The society has a marketing system called the Senior Resource Alliance, where a number of CSAs get together to discuss the issues of aging and solutions that address them.

He claims his organization receives about 100 calls a week from clients checking on an advisor. Sometimes, Pittock says, advisors misrepresent their status, claiming to be a CSA when in fact they are not. At that point, the society's law firm gets involved.

"We have a screening process that candidates go through before they get started," he says. "Some advisors don't even get to the point where they begin the process."

Ultimately, says Dan Graham, senior director of the Certified Employee Benefit Specialist program, the most appropriate and credible designation comes down to what the broker is trying to accomplish. If he is looking for knowledge and respect, he should look for something academic to help him help his client. And the designation should have a successful track record.

"I've seen so many designations by a person's name that they continue on the back of their business card," Graham concludes. "At that point, you have to wonder if they're making the best use of their time. They should be doing what they do best, which is getting in front of the client."

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