If you receive an award notice from the Consumers’ Research Council of America, don’t take the honor lightly.
It isn’t the responsibility that comes with the award that should give you pause: This isn’t the financial planners’ equivalent of the Miss America Pageant, where the winner has to assume a laundry list of responsibilities and make public appearances on behalf of the organization.
It’s the legitimacy of the award and its sponsoring organization that’s the problem. If you get the award letter, you can proudly proclaim yourself one of “America’s Top Financial Planners,” as recognized by the Consumers’ Research Council of America, but don’t accept the award without preparing yourself to answer questions about what the award really means.
Forbes first exposed the Consumers’ Research Council of America in 2009 in an extensive investigation piece. They discovered that the council sends award letters to financial planners, asking them to purchase an award plaque that costs up to $243. But the criteria the council uses to select award recipients are amorphous at best and certainly don’t, by themselves, indicate “top” status, and being among the countless financial planners qualify for the award is less of an honor than it appears at first glance.
Forbes found that the award is bestowed on financial planners, regardless of disciplinary history and their actual prestige in the industry. In fact, some recipients are not even financial planners, brokers or financial advisors. A writer for CBS MoneyWatch was even able to register his dog for the award.
The provenance of the council itself is also questionable. It lists its address as being on Pennsylvania Avenue in Washington D.C. But the address—just down the street from the White House—is just a mailbox at a UPS store. Consumers’ Research Institute does not have offices at the location. And neither Consumers’ Research Council of America, nor its parent company, SLD Industries, is registered as a nonprofit with the IRS.
The council’s “Guide to America’s Top Financial Planners” is a 1990s clipart-heavy e-book that apparently is not available in paper form. It consists of only a poorly constructed online search function paired with a series of very basic articles on the basics of “financial planning.”
A number of financial planners have cited the Consumers’ Research Council of America award in advertising material. Although many consumers will not research the award’s legitimacy, those who do will certainly be less than impressed.
The same caution should be exercised toward the myriad certifications and credentials offered to financial advisors. There are over 100 professional designations in the financial services industry. The cost of adding one of the three letter acronyms to the end of your name may be higher than it’s worth.
Rather than spend your money on designations and awards of dubious significance, concentrate on recognized credentialing programs, such as the Certified Financial Planner Board of Standards’ CFP designation. Even membership in an industry association such as the Financial Planning Association or the National Association of Personal Financial Advisors is a better use of your marketing and professional development capital, even if membership requirements of those associations are less strenuous than the CFP Board’s.
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See also The Law Professor’s blog at AdvisorFYI.