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headshot of Michael Finke, a professor for the American College of Financial Services

Michael Finke Sees a Bull Market in Advisor Education

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What You Need to Know

  • The American College commissioned a survey of 386 advisors at RIA firms and about 1,157 investors.
  • About 76% of advisors said typical advisors in their practice have designations beyond the certified financial planner mark.
  • Investors ranked certifications and other evidence of knowledge as the top characteristic to look for.

Investment advisors are hungry for financial education, and prospective clients want to see hard evidence that financial advisors know things.

About 76% of the advisors who participated in a recent American College of Financial Services advisor survey said advisors in their practice have designations beyond the certified financial planner mark — and 58% strongly agreed that pursuing financial services designations had helped their careers.

College researchers found that 27% of the investors who participated in a separate investor survey said “evidence of knowledge,” including educational credentials and certifications, was the top characteristic to look for in a financial advisor.

Michael Finke, a wealth management professor at the college and the director of the O. Alfred Granum Center for Financial Security at the college, said, in a comment included in an announcement of the results, that the surveys show that studying up helps advisors build their careers.

“Looking at the data, we see a clear need for further education and specialized knowledge in retirement income planning,” Finke said. “It is what consumers want, and it is what advisors in the RIA community think is valuable.”

What It Means

You had better be comfortable with taking classes and passing exams, or trying to build a financial advisory practice might be difficult.

The Surveys

The college conducted one survey of 386 independent advisors or hybrid advisors at RIA firms.

The Granum Center commissioned a second, separate survey of 1,157 investors. The investors had to have a minimum of $25,000 invested.

A Surprise

You might not have to have a great bedside manner to be an appealing financial advisor.

Only 8% of the investors listed positive recommendations from people they know as the top characteristic they would look for.

Recommendations trailed far behind evidence of knowledge, trustworthiness and listening skills.

“Online reviews” and “values my input” ranked even lower.

Just 4.4% of the investors would make a point of looking for advisors with good online reviews, and barely 2.2% want advisors who value their input.

Pictured: Michael Finke (Photo: The American College of Financial Services)