The media calls them “alphabet soup”. Investor Watchdog’s record is reviewing the credentials of an advisor who had 28 letters after his name. The soup I am referring to is the letters that represent certifications, designations, and accreditations that appear after advisors’ names.
We are all familiar with the well-known CPA® (Certified Public Accountant™) designation. Less well known is CFP® (Certified Financial Planner™) designation. And, even lesser known is CFA® (Chartered Financial Analyst™), a very highly regarded designation that can take three years to obtain.
Investor Watchdog staff spent months researching designations and the results were alarming. First of all, they found financial advisors used more than 200 designations that purported to show they were specialists in financial areas that included: Planning, investing, insurance, tax, legal, seniors, and divorcees, to name a few. The designations were their sources of knowledge that provided specialized expertise that helped their clients achieve their goals.
Or, that is the perception they want to create. The reality is very different. Watchdog classified 50% of the designations as deceptive sales practices. Advisors buy them to look more knowledgeable than they really are. For little or no work and a few hundred dollars, the advisors are instant experts on complex topics that may take hundreds or thousands of hours to master.
Millions of Americans selected advisors because they were “experts” in their fields. They did not question the advice they were given because the sources of advice were “experts”. And, investors rarely researched the advisors’ credentials. The consequences have been staggering. Millions of investors have lost hundreds of billions of dollars. So how can you protect yourself from advisors who use deception to gain control of your assets?
The fastest, easiest solution is go to www.InvestorWatchdog.com, click on Get the Facts, then click on Watchdog’s free Certifications research service. Enter the initials you want to research to learn more about the 200 designations in Watchdog’s database. If you run into a new designation that is not in the database you can submit it to Watchdog staff and they will research it for free in three workdays or less.
The more time consuming solution is to research the designations on your own. Watchdog recommends you review the following information:
- The prerequisites for the designation (experience, degrees, other designations, none)
- The curriculum to earn the designation (course material, classes, none)
- Method of study (classroom, online, self-study, none)
- The testing requirements (proctored, online, timed, open book, none)
- The amount of time it takes to earn the designation (four hours, one day, one year, none)
- The continuing education requirements (hours, frequency, online, classroom, testing)
- The organization that sponsors the designation
- Name search for the designation and the sponsor