Enthusiastic educator

The American College has forged its reputation for 80 years, providing financial advisors with the education and the designations they need to serve consumers. The College’s current president and CEO is Dr. Larry Barton, a lifelong educator who is passionate about improving the reputation and integrity of the financial services industry.

He says a dedication to ethics and true continuing education are the best ways to turn the tide of consumer sentiment and put the term financial advisor on par with registered nurses and CPAs.

Senior Market Advisor: How important are designations in the eyes of consumers?
Larry Barton: I started to speak about the issue three years ago. I think I have been one of the most vocal individuals on the subject. From a consumer standpoint, credentials matter. Consumers today – specifically seniors – when they are hiring a planner or advisor, are looking for someone who has knowledge and depth and credentials. They expect that someone who is creating an advice plan for them has had training and some type of formal credentials. For years, most of that training was done by the companies. They put you through boot camp and you were a sponge for that information and then you went to work with clients. As years have gone by and we’ve learned a lot in education, it’s fair to say that most consumers expect more than just a company training program to constitute your breadth of knowledge.

Consumers expect credentials because they speak volumes about how well-prepared you are and how knowledgeable you are. If you were to look at some of the studies done by the Roper organization and others, nurses consistently rank among the highest in terms of levels of respect in consumers. CPAs are held in very high regard because people know that designation, like an RN, to be something that required much study. Well, when it comes to financial services and insurance, it often ranks very close to the bottom. I think it’s because consumers are bewildered, and in many cases they simply don’t have confidence that they are receiving objective counsel.

SMA: And having designations helps?
LB: The first thing is that consumers have legitimate questions: “Am I being sold a product, or is this person really trying to customize their counsel? Am I there to receive counsel or am I going to be sold a product?” From the advisor’s standpoint, they are in an awkward position, too, because their companies are telling them they must complete this company training protocol, which is very appropriate. You have to seek that knowledge. Here are our procedures, here’s our compliance, here are our procedures for underwriting. All of that is proper. But what companies are investing in the advisor to go beyond the company, the basic training?

I think the industry is dropping the ball on that. Some of them are sending their advisors to weekend designation programs. I’ve been a very vocal opponent of them. I think this industry is headed for class action lawsuits because we have some companies that are sponsoring and reimbursing agents who go to two- and three-day seminars and walk out with a credential after their name. I think consumers, when they hear about it, are going to find it disturbing, and we are going to see sons and daughters come forward saying, “My mom and my dad invested with your company because this agent told us they were certified or chartered in some area of senior planning,” and they believed that meant they had been tested and they were the product of a strong multiyear journey.

SMA: But that may not be the case.
LB: What’s the story? Can you actually get a designation after two to three days in a hotel? The answer in this industry right now is “You bet.” That must stop. Some of these programs are excellent. They are very good. Some of them are really good introductory programs. They teach about senior living, they talk a little bit about annuities, they talk about long term care. They’re very good. But they are not designations. They are not on the same par as a CLU or a CFP or the CASL, designations that come from an accredited college or university. That’s my beef.

SMA: What are the things in your mind that make being a financial planner different from being a product salesperson?
LB: The majority of advisors working with senior clients are not only sitting and helping the senior plan in terms of doing the risk tolerance, looking at a Monte Carlo simulation, looking at the family estate plan issues, looking to see if there are any business implications and tax planning, but they are talking about sibling rivalries. They are talking about Alzheimer’s care. They are talking about the whole notion of family holistic planning, what you need in your family. I call that a needs assessment; different companies call it different things. But a great advisor is going to do a needs assessment on the front end as opposed to product assessment, where I walk in with six brochures. You want DI? I’ve got DI. You want long term care? I have long term care. You think you might want an annuity? We sell variable. I don’t know how you can do that effectively if you have not conducted a thorough needs assessment first.

SMA: And that involves more than finding out what product a person may want.
LB: That means a discussion, an interview, and maybe even separate interviews with a husband and wife. The point is the fact-finding process is essential because what some consumers have complained about is the moment they hit me at the kitchen table, they are telling me I need long term care. Well, maybe I don’t. Maybe I can’t afford a DI policy. Maybe I can’t, but it would be much more useful if you listen to my story before you sold the product. That’s one of the ingredients of communication. It’s not just writing and speaking and reading. A lot of it has to do with listening.