November 12, 2012

IMCA Study Defines Practice of Wealth Management

Analysis identifies knowledge and skills needed to advise wealthy clients

Investment Management Consultants Association plans to fine-tune the requirements of its Certified Private Wealth Advisor certification program, based on the findings of a yearlong study.

Last week, IMCA released a whitepaper that lays out the findings of a comprehensive job analysis defining the practice of wealth management. Kryterion Test Services, a professional certification test development and delivery company, initiated the three-phase job analysis on behalf of IMCA last year.

Besides clarifying what constitutes a private wealth advisor, IMCA said in a statement, it will use the analysis to refine the experience, education, examination and ethics requirements of its CPWA certification program.

“Until now, no clear definition of private wealth advice or wealth management existed in the financial services industry,” Sean Walters, IMCA’s executive director and CEO, said in the statement.

“This job analysis clearly defines wealth management as a distinct practice of advising high-net-worth clients with specialized expertise and skills. Financial advisors without this knowledge who work with affluent clients are doing them a disservice,” Walters says.

Following are highlights of the study:

  • Wealth management is a distinct practice. Financial planners, accountants, estate planning attorneys or investment professionals may practice advanced competency in this discipline.
  • A client must have a minimum net worth of $5 million in order to be considered a high-net-worth client.
  • The knowledge advisors need in order to provide competent wealth management incorporates 169 topics within human dynamics, wealth management strategies, client specialization and legacy planning.
  • In working with clients, private wealth advisors may use fundamental tasks and a process similar to financial planning or other client-oriented professions; however, they need an advanced and unique set of knowledge and skills to serve high-net-worth clients effectively.
  • The CPWA is the appropriate standard for advanced competency in the wealth management practice, and the certification will be adapted to more-effectively address the tasks, knowledge and skills addressed in the study.

IMCA has administered the CPWA certification since 2007.

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