Wading through the alphabet soup

Aug 18, 2013 @ 12:01 am

The financial advice industry has long been criticized for having too many professional designations — some good, some OK and far too many just worthless. By some estimates, there are now more than 100 professional designations and certifications for advisers, many of which require no accreditation and very minimal study requirements.

A quick scan of the business cards piled high on my desk turned up this list of acronyms: AAI, AEP, AFC, AIFA, APR, ATA, AWMA, BCA, BCE, CAC, CAP, CCPS, CDFA, CDP, CEA, CEPS, CFA, CFC, CFDP, CFP, CFPN, CLTC, CLU, CPA, CPWA, CRP, PFS, WMS ...

You get my point.

The preponderance of designations dilutes the importance of those that require a level of experience, and an adherence to a certain code of ethics and educational requirements. As a result, most credentials following an adviser's name are rendered meaningless — at least in the minds of clients or potential clients.

For that reason, InvestmentNews has avoided using professional designations when running advisers' letters to the editor. The policy is based on the simple fact that we do not want to be seen as promoting one designation over another. We also try to avoid promoting designations or credentials that are essentially worthless, and quite possibly dangerous to consumers.

For the most part, this policy has served us well. Occasionally, however, we hear readers who find it irksome that we don't recognize their credentials. By refusing to identify advisers' credentials, they say, InvestmentNews is unfairly punishing those advisers who have worked hard to attain credentials that are generally held in high regard, and connote some level of expertise and a higher standard of care. Furthermore, they contend, certain credentials lend credibility to their ability to speak on specific subject matters, such as college savings planning or divorce planning.

One reader, for example, recently balked at seeing himself represented in a letter to the editor as simply a “financial adviser.”

“To me, that could be anyone and says nothing to degree of training or competency,” he wrote. “Not everyone can put CFP behind their name. It takes much effort to earn this.”

It's a fair point and one that deserves further consideration.

Most rational advisers would probably agree that the certified financial planner designation, which is offered by the Certified Financial Planner Board of Standards Inc., indicates a high level of expertise, and at least a moderate level of experience, in the field of financial planning. The same argument is made that the chartered financial analyst designation, which is given by the CFA Institute, suggests strong expertise in securities analysis and portfolio management, and American College's chartered life underwriter designation speaks to insurance expertise.

Still, it would be impossible — and definitely unwise — to acknowledge every designation used by advisers in InvestmentNews. Not only are many credentials meaningless, publishing any and all of them would suggest that all credentials are equal, and clearly they are not.

The question then becomes: What criteria would we use to disallow some designations and not others? Number of designees? Level of coursework? The stature of the organization behind the credential?

How about whether that credential comes with a clearly stated code of ethics?

Common sense?

The more I think about this, the more I think our policy of not publishing adviser designations is the right one.

That said, I'd love to hear from you, our readers, on whether you think adviser designations should be published in our letters to the editor. If so, which ones?

To weigh in, go to our survey at InvestmentNews.com/designations.

Frederick P. Gabriel Jr. is the editor of InvestmentNews. Twitter: @fredpgabriel


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

May 02


Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


Why some retirement plan advisers think Fidelity is invading their turf

InvestmentNews editor Frederick P. Gabriel Jr. and reporter Greg Iacurci talk about this week's cover story that looks at whether Fidelity Investments is stepping on the toes of retirement plan advisers.

Latest news & opinion

Gun violence hits investment strategies, sparks political debates with advisers

Screening out weapons companies has limited downside.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

If Finra eases firm oversight of outside business activities, broker-dealers could lose revenue

Brokerage firms would no longer be able to charge reps for supervising nonaffiliated RIAs.

Galvin charges Scottrade with DOL fiduciary rule violations

Action of Massachusetts' top regulator shows states can put teeth into a rule under review by the Trump administration.

Fintech aims to digitize estate planning

Companies like Everplans and Yourefolio are finding success with advisers looking to expand their planning capabilities.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print