Regarding the recent Dateline expos? titled “Tricks of the Trade,” I have two fundamental observations.
First of all, the incidents and allegations stated or implied should come as no surprise. The media almost always focuses on the negative, which for the most part are exceptions to the rule. Or, as one analyst once stated, “We don’t report on the safe landings at O’Hare Airport.” This, I believe, makes a point that should always be kept in mind; the news for the most part is about what is not normal and not happening to most people. If it were not exceptional, it would not be news, any more than safe landings at O’Hare are newsworthy.
Consumers do not always recognize the foregoing and that is why it is so important for the business to maintain a vigorous public relations effort. Programs such as “LIFE” are important in providing a counterbalance to such broadcasts. Sometimes I think the media provokes attacks on business to stimulate advertising sales that rebut the claims. I guess that is the cynic in me manifesting itself.
The second fundamental observation regarding “Tricks of the Trade” that I have, and this may be the more important, is that there are some scalawags out there and we need to help rid the marketplace of them so that all consumers will have a “safe landing.” Two primary points made by “Tricks” is that there are people using doubtful designations that imply an unwarranted expertise (Alphabet Soup) and misrepresentations (Gobbledygook).
A recent incident in our area, I believe, will serve to underscore the issue. About a year ago a person ran a series of full-page ads in a local magazine holding himself out as some sort of financial guru. Behind the name of the person were letters comprising almost half the alphabet. There was not a single designation in the lot that I was able to recognize. After 52 years in the business I believe that I would have been able to spot any designation that carried real substance.
I inquired within our business to see if anyone knew or had even heard of this person–no one had. And yet, there were exorbitant claims of expertise in estate planning, insurance and wealth management contained in the ads. I am surprised that Dateline did not latch on to this person as another horrible example.
At any rate such people are out there and it is up to us and the regulators to find a way to curb this kind of representation. I have not seen any of these ads recently so perhaps they didn’t work and consumers as well as those of us in the business could detect the “tricks.”
Alphabet soup is, in my judgment, a large and growing problem. The American College has identified almost 250 designations that, in one way or another, relate to the financial services business. The College was good enough to supply me with a list for my own evaluation. FINRA (formerly NASD) also lists many of these same designations on its website with an explanation of the requirements to qualify for the designation. This could be useful, I believe, to an agent who may have a competitor displaying one or more designations of doubtful value.
Using the list supplied to me by the American College and the FINRA website I was able to look up quite a few of these questionable designations. Almost all were either “certified” or “chartered” by some illusory organization. Some required a few hours of self-study to qualify while others merely required passing one or two tests. A few had an experience requirement, but many did not.
No wonder regulators at both the state and federal level are becoming increasingly concerned over the proliferation of “Alphabet Soup.” It is not good for the consumer and it is bad for the business. For the consumer, phony designations imply knowledge and experience that isn’t there, and it hurts the business by confusing valuable and important designations with imitations. Perhaps the regulators will solve the problem by limiting the use of designations that are of doubtful value to consumers. But like all regulation, rule-making takes time and in the meantime we and consumers have to find ways to cope.
The spread of misinformation (Gobbledygook) is, for the most part, a lack of proper training. With the rise of independents in the business this is increasingly difficult. Perhaps this is a viable mission for local NAIFA associations and a prime justification for their role in our business. Some companies do an excellent job of monitoring and controlling the use of designations by their representatives, but many do not. Perhaps the regulators should give those who are not performing a bit of a nudge to be sure their representatives are not holding themselves out with bogus titles. With information available from FINRA it is not difficult to spot the bad eggs.
Alphabet Soup and Gobbledygook are fellow travelers. Wherever you spot one the other is almost always present. “Tricks of the Trade” may have been a bit hard to endure, but it would be unwise to ignore the message entirely. We cleanse ourselves or our reputation is soiled by those who disregard proper training and the value of earning a truly useful designation.