Financial advisers sometimes tout a long list of various designations.  What do they mean and do they really provide much benefit?  Read this article to learn how to defend yourself from those who have designations that sound better than they really are.   

Just How Nourishing

Let's say you attend a free luncheon seminar and the presenter introduces himself as being well qualified to advise you regarding your finances.  The bio he hands out states that he has the prestigious CRFA designation.  That is, he is a Certified Retirement Financial Advisor.  The bio states he has been trained extensively to provide knowledgeable, thorough advice to those wanting to plan for retirement.  Sound quite impressive, doesn't it?

 Are you getting advice from a CRFA with the extensive training claimed?  In truth, no.

The designation only requires a four day course that includes subjects like, "How Seniors Make Financial Decisions", "How to Communicate with Seniors", and "Marketing Financial Services to Retirees".  As you can tell from some of the subjects being taught, this seems more like a marketing program rather than a helpful training program.

What if someone has the initials CSA after their name on their business card? They tell you that they are a Certified Senior Advisor trained especially to be of help to seniors in handling all their complex problems.  I have heard radio ads and seen print ads and billboards claiming expertise in helping seniors based upon this CSA designation.

Do you know what is required to get the CSA designation?  It requires only a 3 ½ day local course covering topics which included "The Experience of Aging", and "Spirituality and Aging". 

Now, I'm in favor of continuing education to keep an advisor updated with information needed to help clients.  And any course, even if only three days long, may provide useful information to do so.

But I'm against deceptively using these designations to create a false sense of expertise.  After all, the designation "Certified Senior Advisor" seems to convey a message of extensive training.

Confusion Reigns

During a recent U S Senate Committee hearing it was stated that, "People should be able to trust the advisor who invests their money.  They should not be worried that the title after their advisor's name is scarcely more than a marketing ploy"

At the time of this broadcast, there were about 24,000 Certified Senior Advisors and 1,200 Certified Retirement Financial Advisors.

So now you know that if you run across one of these people who claim expertise by being a Certified Senor Specialist, he is not the expert he claims to be, right?

Wrong!

The Certified Senior Specialist (not Certified Senior Advisor) is one of the most academically complete of the senior designations.

It's quite confusing.

There are over 90 financial designations and many of them sound similar.  Some of these letters behind a person's name can be nourishing to your financial well-being, others provide limited or no nourishment at all.

Misrepresentation Under Investigation

The problem of misrepresentation of expertise has gotten so bad that it is currently being investigated by the North American Securities Administrators Association, the Financial Industry Regulatory Authority (formerly the NASD), and the U.S. Senate Special Committee on Aging.

Looking at the report from the Senate Committee hearing just this month we read, "An investigation conducted by the Aging Committee has revealed that many of the designations that have been cropping up represent limited or no value with respect to advising seniors on financial matters, and that often these designations are obtained simply by attending a weekend seminar and passing an open-book, multiple-choice test.  Many seniors targeted by salesmen using these designations have lost their life savings because they were steered toward investment instruments that were unsuitable for them, given their retirement needs and life expectancy."

Scriptural References

This is not a new problem.

We read in Jeremiah 5:27-28  Like a cage full of birds, their houses are full of deceit; therefore they have become great and rich;   they have grown fat and sleek. They know no bounds in deeds of evil; they judge not with justice the cause of the fatherless, to make it prosper, and they do not defend the rights of the needy.

Of great concern to me is that I have seen those in the church misrepresent the expertise these designations imply.  Jesus had the harshest words for these people.  Speaking to those who practiced deceit in the temple by selling blemished animals passing them off as unblemished, Jesus said in Luke 19:46, "My house shall be a house of prayer, but you have made it a den of thieves."  He then overturned the tables and chased them out.

 If you are reading this and are a Christian advisor who has used these designations as mentioned (I would even go as far as saying, even use them at all), I would ask you to consider       Ephesians 4:25, Therefore, having put away falsehood, let each one of you speak the truth with his neighbor, for we are members one of another.

National Ethics Bureau - Unethical?

The most recent development used to deceive you gives the impression that you are being advised by someone who has "maintained an exemplary record of business ethics" and because of that, has been allowed to be a member of the National Ethics Bureau.  Sounds impressive, doesn't' it.

I received an email from an annuity marketing firm promoting membership in this organization stating that it would boost credibility and increase sales.  When I researched the requirements for membership, from what I could ascertain, anyone who could qualify for a securities license could be a member.

When one pays for membership they receive a wall plaque showing an impressive emblem stating that the person is approved by the National Ethics Bureau.  They get hand-out cards explaining the benefits of doing business with a member.  They even get a "Seal of Trust" camera ready logo to put on their business cards.

In a recent court action by the state of Massachusetts against two insurance agents charged with dishonest & unethical marketing practices we read:

"The National Ethics Bureau is defined as, ‘an organization that provides certifications to financial advisors after completion of a background check.' In general this organization is portrayed as unethical and less than thorough, to put it lightly. The complaint points out that in order to become a member, one simply has to fill out a short (1-2 pages) application and pay a small fee. Not only does a face-to-face meeting not have to occur, but a phone call isn't necessary either. In addition, contrary to the definition there is no background check or any type of follow-up conducted by the NEB. The complaint uses DelMonico's certification from the NEB to show that the NEB will present someone who has been previously documented as conducting unethical behavior, such as being fired by MetLife for ‘selling away.' The NEB is used by agents to give a sense of knowledge, credibility and trustworthiness to themselves and their business."

Again, deception to lull you into a false sense of security.

What's The Answer?

So what's a person to do?  Well, we can help.

We have provided this article including the following designation requirements as a resource.  You may want to consider printing and keeping it for reference.  We haven't included all designations, just those that most people will come across. 

For example, the following designations are considered respectable but normally used by institutional money managers (CFA, CIC, CIMA, CMT).

If you run across a designation not found below, please contact us for information.

  Designation Requirements and Related Information

1. Certified Senior Advisor (CSA) -Offered by the Society of Certified Senior Advisors, this designation can be earned by taking just three and one-half days of coursework. Many advisors who earn this designation work primarily with fixed or index annuities only.  Because of this many will often make assertions at their seminars regarding the dangers of any type of investment other than what they sell.
2. Certified Senior Consultant (CSC) - Offered by the Institute of Business and Finance, this designation requires 25 to 30 hours of self-study plus three final exams along with 15 hours of continuing education per year for the first five years. The coursework covers the basics of Social Security and Medicare, long-term care planning, annuities and other retirement income, elder care, and other related topics.
3. Certified Senior Specialist (CSS) - Issued by the Center for Senior Studies this designation is by far the most academically complete of the senior designations.  It requires completion of five self-study modules with a requirement of a 70% passing grade on each module and final exam.
4. Chartered Senior Financial Planner (CSFP) - The issuing organization claims that it trains its certificants in advanced retirement and estate planning strategies, and that the "Senior" in its name implies professional seniority as opposed to a demographic target market. However, only three days of academic training are required, followed by an open-book exam.
5. Certified Retirement Financial Advisor (CRFA) - The designation only requires a four day course that includes subjects like, "How Seniors Make Financial Decisions", "How to Communicate with Seniors", and "Marketing Financial Services to Retirees". 
6. Certified Financial Planner (CFP) - One of the most comprehensive and respected designations.  Candidates must complete studies on over 100 topics covering all areas of financial planning.  In addition to completing the CFP certification exam, designees must complete qualifying work experience and agree to adhere to the CFP Board's code of ethics and professional responsibility.
7. Chartered Financial Consultant (ChFC) - Administered by the American College, the ChFC designation is very similar to the CFP designation above requiring comprehensive extensive studies, exams, adherence to ethical and professional standards, and continuing education.  Coursework in one may be used to qualify for coursework in the other.
8. Certified Fund Specialist (CFS) -As the name implies, an individual with this certification has demonstrated his or her expertise in mutual funds and the mutual fund industry. The Institute of Business Finance provides training for the CFS designation, and the course is quite comprehensive and focuses on a variety of mutual fund topics which translates into expertise in advice regarding investing in mutual funds.  The knowledge these CFS designees hold is kept up to date through their continuing education requirements.
9. Chartered Life Underwriter (CLU) - This designation is issued by the American College, and those who hold it work mostly as insurance agents. The CLU designation is equivalent to a master's degree in life and health insurance.  It is awarded to persons who complete a 10-course program of study and 20 hours worth of exams. The course covers the fundamentals of life and health insurance, pension planning, insurance law, income taxation, investments, financial and estate planning, and group benefits.  Experience in the insurance industry and continuing education are required to maintain the designation.
   
   

Caution!

One word of caution - just because someone has a generally respected designation doesn't mean that you will get trustworthy advice.  I'm reminded of the saying, "People don't care how much you know until they know how much you care."  In my 35 plus years in the financial services industry, I've met numerous advisors with many prestigious initials after their name who would rob you blind if they could.  They have used their knowledge to deceive and prey on others. 

And this is also important for you to know - Just because someone doesn't have designations, it doesn't mean they aren't knowledgeable. 

Designations (Financial Alphabet Soup) don't guarantee knowledge.  And they certainly don't guarantee honesty.

I'll use my son, Todd, as an example.  Todd has officially been in the financial services business about 10 years now (of course, he grew up around it all his life since he has helped me and his mom, who is a Health Insurance Specialist). 

Todd has not taken the large amount of time and expense needed to obtain the more respected designations due to the demands of raising a family and building a business.  He is also very involved in his church.  His priorities, I believe, are in order.

He also has no interest in buying the designations that tend to be used deceptively, which I commend him for.

Yet, he is extremely knowledgeable and capable.  More importantly, he's honest and he cares.

He took about two years to write his Biblical finance study book, "The Christian and HIS Finances" which was endorsed by several people including Ron Blue, founder of the national organization, Kingdom Advisors and chairman of the board of Crown Financial Ministries.

I know I'm prejudiced, but I believe it's the best down to earth, practical, and life changing book available on Christian finances.

He has also developed several very comprehensive seminars for churches and organizations.

Bottom Line

So, the bottom line is that you need to be aware of the role of these designations and the amount of expertise they actually convey.

The knowledge gained from getting some of the more respected designations can be used to help you or hurt you.

If a financial advisor is deceptive about the expertise gained from the designation, they will more than likely be deceptive in dealing with you about your finances.

Consider using this article as a resource to defend yourself.