NEW YORK — The Investment Management Consultants Association’s decision to offer the chartered private wealth adviser designation makes industry participants wonder if the credential will fill a need or merely add to the alphabet soup of designations already available.
The designation, launched last week in conjunction with the University of Chicago’s Graduate School of Business, will certify financial advisers who work with clients who have between $5 million and $25 million to invest.
The CPWA expands on Greenwood Village, Colo.-based IMCA’s existing 18-month-long, three-part wealth management certificate program, which has been in effect for three years.
Despite the confusion that a new designation may cause, Thomas A. Orecchio, chairman-elect of the National Association of Personal Financial Advisors in Arlington, Heights, Ill., thinks that the new mark will serve a growing demand within the high-net-worth segment.
“I think that there are too many designations in general, and it confuses the public as to what is real. However, it sounds like the right kind of stuff for the market segment, and IMCA has a good reputation of providing rigorous course work,” said Mr. Orecchio, a principal of Greenbaum & Orecchio, an Old Tappan, N.J., firm that manages $425 million.
“This can be a good [designation] for a particular market segment,” he added.
Meanwhile, the Washington-based Wealth Advisor Institute has expressed its support for the designation as a learning tool.
“Although the Wealth Advisor Institute and IMCA serve different functions, IMCA’s new designation is proof that our organizations share a similar philosophy on the importance of continuing education for advisers,” WAI chairman Keith E. Gregg wrote in an e-mail.
Some skepticism
However, some in the industry are skeptical about the addition of a designation but see a demand for its content.
“It would be hard to see how this designation would help a specific client in any way more meaningful than existing financial planners can and do,” said Paul League, a co-founder and board member of the International Association of Qualified Financial Planners in Beverly Hills, Calif., which offers the qualified financial planner designation.
“I don’t believe it adds anything to the
financial planning arena or simplifies the maze of designations that are out there,” said Mr. League, principal at League Financial and Insurance Services in Beverly Hills. “As a body of knowledge to learn and study, it can certainly have merit but if it will be helpful as another designation, I don’t really think so.”
But IMCA stands by the designation.
“There is a niche of advisers who are working in [the high-net-worth] area,” said Dede Pahl, executive director of IMCA. “There is currently no designation that specifically addresses that need.”
The designation requires applicants to have five years’ experience in the financial services industry; a bachelor’s degree or at least one of six other professional designations, including certified financial planner; and to agree that they will abide by IMCA’s code of ethics.
The course work will include classes in tax planning; tax-efficient portfolio construction and management; executive-compensation plans; management-concentrated stock options; retirement planning; asset protection; charitable planning; estate and gift taxation; and advanced
estate planning.
Candidates will also need two professional references and will undergo a background check to ensure that they have an “acceptable regulatory history.”
Gathering feedback
For a cost of $7,000, applicants who are accepted into the study program will receive six months of pre-reading material, which will culminate in a week-long course and an exam given at the University of Chicago.
The classes will be taught by practitioners and academics from the university and will be held twice a year over the next two years as the content and format for the new curriculum is beta-tested.
The first batch of study materials will be sent out next month and the class will be given in March.
The first group of designee candidates will be capped at 55.
Ms. Pahl said that IMCA expects to add 100 designees a year over the next two years in order to get the kinks out, and it plans to gather feedback from advisers about the way they use the designation in their practices.
