Family Business Succession Planning

Understanding Financial Professional Designations and Titles

Today almost anyone may call themselves a financial planner. It doesn’t require anything…no extensive training, experience or good intentions for that matter. Most articles, professionals, and industry associations will tell you that it is necessary to search for a financial planner who is certified. In our opinion this is a good start but it isn’t necessarily the most reliable means of hiring an advisor.

Here is a short list of some of the certifications and designations advisors obtain.

Certified Financial Planner Certified Portfolio Specialist Certified Annuity Specialist
Certified Retirement Planner Chartered Financial Consultant Financial Services Specialist Certified
Private Wealth Advisor Certified Wealth Strategist Master Financial Planner
Certified Estate Planner Certified Estate Advisor Certified Exit Planner

On top of that, there are over 150 designations and certifications listed on the Financial Industry Regulatory Authorities website.

Think about that for just a moment. How could one industry have over 150 designations? Let’s put that into perspective in regards to other professions. How many designations are there for accountants? Just one, they are called CPAs, Certified Public Accountant. Medical professionals are called MDs, Doctor of Medicine.Those who practice law are JDs, Juris Doctor or Doctor of Law. So, why does the financial services industry allow over 150 designations? Overall, there are several reasons but one that stands out is that most designations in the financial services industry are not university degree programs…they are certificate programs created by organizations; each organization competing for its own survival, shelf space in the advisor’s and the public’s eyes and don’t forget about revenue.

Granted, if an advisor has a designation at least it proves that he or she has some level of education in the field of financial services, right? Or maybe it proves that they can study and take tests incredibly well but still have no clue as how to dispense financial advice? To be a MD, one will attend not only four years of undergraduate but an additional four years of medical school, then a licensing exam and two years of residency. No degree is needed to become a financial advisor. No certificate is required to be a financial advisor. If the advisor is going to handle investments they must study for and pass the series 6 or 7 exam and the corresponding state exam. It’s not an easy exam but I can assure you that anyone with half a brain and a solid determination will pass the exam.

Certainly this isn’t what you wanted to hear and as I write this I’m positive that many advisors will be throwing eggs at my office after reading this. Unfortunately, it gets worse before it gets better (I promise, it will get better). We talked about designations and what a mess that is but what about titles?

In order to stand out from one another, advisors have gotten creative with their titles over the years. Here are just a few:

Financial Advisor  Financial Consultant Financial Planner
Registered Representative Wealth Manager Investment Advisor Representative
Insurance Agent Broker Vice President or President
Financial Coach Family Wealth Manager Comprehensive Wealth Planner

If you do a search on LinkedIN (we searched the words wealth and financial) you’ll see some very creative titles, including a few titles that we have never seen before. Many of the titles sound incredibly impressive.

Yet, as we read the summary of the work they do each and every one of them sounds pretty much the same.

“Provide peace of mind”
“Preserve their wealth”
“...Comprehensive investment management”
“Educate clients to achieve their financial goals”
“Get their financial house in order”
“Identify gaps, if present. And offer solutions to fill them”
“Have extensive experience in guiding clients through all aspects of financial management”

If all advisors say they do essentially the same things, that would lead us to assume that whatever questions a consumer may ask when interviewing an advisor…the answer most likely would be, “We can do that.” I couldn’t imagine trying to figure out which advisor would be best for me and my family. If it’s confusing to us in the industry…how are you as a consumer supposed to make sense of it all.

Which leads us right into the next issue, what are the standards for service?