There is no question that the wealth management industry is changing. The question for financial advisers is how do they differentiate themselves in a post-fiduciary environment with robo-advisers nipping at their heels?
Perhaps it's time to up their "gamma," which
David Blanchett, head of retirement research at Morningstar, has defined as the added value of intelligent financial planning in his 2013 paper "Alpha, Beta and Now … Gamma."
Mr. Blanchett is one of the driving forces behind The American College of Financial Services' new Wealth Management Certified Professional (
WMCP) designation program. He helped to develop the research-based curriculum that focuses on creating diversified and efficient investment portfolios centered on long-term client goals.
"Wealth management firms need to constantly evaluate and adjust to the shifting landscape as economic, political and other factors affect markets and investment outlooks," said David Hyman, US segment leader of Wealth Manager Solutions at Mercer, a global consulting firm.
Mercer's new
white paper outlines eight essential focal points that wealth management firms should consider for 2018 and beyond to provide their clients with support and strategies to address the market in this ever-changing world.
ALTERNATIVE STRATEGIES
One of the paper's key points discusses how advisers need to become more familiar with the role of alternative investment strategies as a means of achieving clients' goals. Another key area highlights how after-tax returns can be crucial to wealth managers' overall value proposition.
The American College's new WMCP program was developed to provide precisely this type of expertise. The curriculum is designed for practicing advisers who understand the fundamentals of planning, but would benefit from a much deeper dive into applied wealth management techniques that help clients meet their goals.
There are no educational prerequisites but a minimum of three years of professional experience is required to use the designation, which begins Dec. 18. The length of the program is equivalent of three college-level courses and costs $2,900.
"No other designation provides such a deep overview of tax strategies, financial instruments commonly used by advisers, applied behavioral finance, sophisticated wealth management techniques, and an in-depth overview of estate, charitable and small business planning issued faced by wealth managers," said Michael Finke, dean and chief academic officer at The American College.
The WMCP program uses simulators to illustrate, teach and integrate complex wealth and investment management concepts, providing students with the opportunity to practice the concepts emphasized in the curriculum.
These include life-cycle planning strategies, asset allocation and asset location decisions. The case-study simulations are designed to build advisers' competence and confidence in wealth management so they are prepared to address a wide range of client situations.
POSITIVE FEEDBACK
The American College decided to offer the new wealth management designation after it received such positive feedback from the more than 5,000 financial professionals who completed its Retirement Income Certified Professional program that began in 2012.
"We kept hearing from graduates of the RICP program: 'Gosh, this is something that helps me do my job better'," said Mr. Finke. "We wanted to take that same philosophy and create a program to help advisers do a better job with investment recommendations."
Steve Parrish, a 40-year veteran of The Principal Financial Group and now an adjunct law professor at Drake University in Des Moines, reviewed the WMCP designation in a pilot program earlier this year. He previously completed the RICP program.
"This new designation is more focused on the accumulation side with an end-game in mind," Mr. Parrish said. "One of the big themes of the course is how to take a holistic view of wealth management rather than just focusing on maximizing the return on wealth."
Potential candidates might include the multitude of
wirehouse brokers who are looking into becoming independent advisers after Morgan Stanley and UBS announced they are pulling out of the broker protocol, a voluntary agreement that provides guidelines for advisers when they leave for a competing firm.
