From MarketWatch:
“There are more than 100 professional designations and credentials for financial advisers, and that doesn’t count some of the flimsy, half-hearted, or just plain silly things that some advisers latch on to as a way to impress you. Every few months, there seems to be
Are Some Designations Hollow?
another new designation, as if consumers or the financial-services industry need them.”
This is true – there are some credentials that require a good amount of work (e.g. CFP) and some that require a simpler test or that focus on specific area and therefore are not as comprehensive. The article comes to what I think is a decent conclusion:
“Yet the truth is that an ordinary financial planner with a customer base that is mostly people of your age and assets and concerns could probably do the job, without having a single advanced credential. You may feel more comfortable with someone who has additional training to meet your needs, but you can also overvalue that additional training and pick an adviser more on his or her credentials than his or her true worth as a counselor.”
I would agree that it depends what you are looking for. For example, I know money managers, especially a good number of mutual fund managers, who hold the CFA (chartered financial analyst) charter, and their investment performance is miserable. i subscribe to research to help me construct my portfolios and some of the people I subscribe to have no designations but their analysis and stock performance PUNISHES the performance of many of the CFA guys.
Similar to law, having an advisor with experience in a certain area is very important. I rely on other professionals to assist me in areas where I do not focus (life insurance for example). I focus on retirement income planning, comprehensive financial planning, and investment management. I don’t pretend to know everything and neither should anyone who calls himself a pro.
Thanks for reading – to go to the full MarketWatch article, go HERE.
Chris Grande
