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Life Health > Running Your Business > Certification

Clients Demand More Certifications, So Advisors Seek Them: IMCA

By Emily Zulz

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Applications for the Investment Management Consultants Association’s certification programs — Certified Investment Management Analyst and Certified Private Wealth Advisor — have increased significantly from last year.

And perhaps surprisingly, according to IMCA CEO Sean Walters and IMCA board chair John Nersesian, the largest single group of CIMA applications for the first half of this year has been independent advisors.

“A lot of independents, they either get no designation or a CFP,” said Walters in an interview on Monday with ThinkAdvisor.

Walters and Nersesian, who is also managing director of wealth management services at Nuveen, stopped by ThinkAdvisor’s New York office to discuss some fresh data about IMCA membership and take a look at recent research.

“The reason we found those findings to be surprising is because — if you think about it — the independent advisor, by definition, they’re paying for it out-of-pocket,” said Nersesian. “And our programs are not inexpensive.”

CIMA certification program typically costs $7,000 to $9,000, and the cost of the CPWA program is $7,475 for IMCA members and $7,975 for nonmembers.

“The independent advisor who’s choosing to sign up, that’s a real commitment,” Nersesian said.

According to Walters, applications in general have increased since last year. CIMA applications are up 20% year-over-year and CPWA applications are up 35% over last year, he said. And, he added, membership is up about 5% from last year.

“So, we’re growing and we have a lot of interest out there,” Walters said.

Recent research from IMCA and Advisor Impact released in May showed that clients want credentialed advisors.

“What this [research] is saying is that clients want an advisor to hold something that’s voluntarily higher than the minimum requirement,” Walters added.

Moreover, millennials especially want advisors to hold additional certifications. According to the study, nearly 80% of those under 40 said they wanted their advisor to hold voluntary designations or certifications, compared with nearly 60% of the 40-plus crowd who said the same.

As Nersesian, who was an advisor for more than 20 years, puts it, “Today’s client is a lot different than the one that we used to serve 10, 20 or 30 years ago. The needs are more complicated, their financial situations are more complex, they’re more demanding, there’s more competition in the game that’s trying to serve that client. And the question we ask rhetorically is how are you responding to those changes? It’s not just about relationships or does the person like you — those are important as well — but do you possess the competencies needed to help me make the tough financial decisions?”

Adapting to the needs and wants of today’s client by receiving more certifications could also in return lead to higher pay, as a previous IMCA study found. Walters pointed to last year’s data that found one-third of CIMA professionals earned $380,000 or more in 2012, compared with only 6% of other financial advisors. That study also found that team practices with CIMA professionals manage more than twice the assets per client as other practices and generate more than twice the revenue per client.

“Confidence and satisfaction tend to lead toward more people being successful in their career,” Walters said.

Walters added that during this study, which was done in 2012, the confidence was much higher in those who held CIMAs or CPWAs despite the recent economic meltdown.

“How confident am I that I can manage my clients’ investments and not lose their money? And there was a lot of damage on that point,” he said. “But those who held these advanced credentials, CIMA or CPWA, had much higher confidence.”

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