In the film O Brother, Where Art Thou?, the Coen Brothers' inspired sendup of The Odyssey, George Clooney plays the wayward wanderer Ulysses Everett McGill, who returns home only to be rejected by his brood of adorable tykes because he lacked bona fides.
Safe to say, McGill never toiled as a financial advisor during his epic journeys. But, no doubt, like the McGill character, more than a few registered reps have been rejected by potential clients for being light in the bona fides department. There are ways for reps to become authentic financial advisors, like the courses offered by continuing education groups and it seems that many advisors are, in fact, taking them. There are scores of designations to choose from, and more being added all the time. Dozens of organizations will allow you to earn them, as the old line goes, from the convenience of your own home via the Internet.
There are those who might say this is a good thing. After all, it's tough making a living the old-fashioned way — going out, winning new clients and making money on the business you create. You need to stand out from the crowd: One way is to be perceived as an expert on something. A new designation may supply just the authority you're looking for. The allure may well prove irresistible, since some Wall Street firms even reimburse advisors for the cost of getting additional credentials.
As Advertised?
Still, with designations proliferating like ragweed, they have come under fire from a number of public officials lately. One dismissed some designations as “junior sheriff badges.” And there has been talk of lawsuits, based on misleading sales practices.
Nobody is surprised by the backlash. Look at the number of choices and you have to wonder what, if anything, many of these designations are worth. (For a list of some better known titles, check out this Web site: registeredrep.com/mag/OBA_MainTable0505.pdf.)
While many programs are well respected, the names of designations are reason enough to be suspicious. They have a derivative quality, much like the way bucket shops use names that sound like established brokerage houses. Almost any three-word combination will work if it includes certified, accredited, qualified, registered, chartered, planner, counselor, practitioner, consultant, advisor, manager or analyst.
The only important difference between, say, a chartered investment counselor (CIC) and a certified financial consultant (CFC) may be that I made up the latter. At least it doesn't appear among the 62 designations found on the NASD Web site or among the 87 listed on Financial Planning Consultants' financialsoftware.com.
This raises another point about designations: No one has compiled an official record of them. Nor are there any uniform industry standards for designations. You are on your own when choosing one. Of course, there are bound to be some combination of letters that might legitimately catch a wealthy prospect's eye should it be tacked onto a business card. They stand for Chartered Financial Analyst, the rare designation that requires plenty of intelligent work to complete (a minimum of three years to earn) and may have almost as much caché as a decent MBA. Even then, though, the designee must worry about the value of his or her CFA being diminished when it might be easily confused with the lesser CFE (certified financial educator) or CFS (certified fund specialist).
Yes, there's an alphabet war out there and you could be one of the casualties. Seriously, though: Would your practice be enriched and your reputation for brilliant investment advice really be enhanced if alongside your name were the letters CDFA, CFG, CFPN — respectively, certified divorce financial analyst, certified financial gerontologist and Christian financial professionals network certified member?
None of this takes into account the numbers you can bore your clients with. That is the 39 series examinations, oddly listed from 3 to 87 (not even officials at the NYSE, which owns the designations, know why they are numbered so), with champs like the Series 32, the limited futures exam-regulation, (how's that for optimism?), that you might actually be required to pass to get a financial job. But then, that's another story altogether.
Barry Rehfeld is the executive editor of Registered Rep.