Fake Designations Impact Your Success!

The media calls them “alphabet soup”. These are the strings of letters that appear after some financial advisors’ names. I think my personal record is interviewing an advisor who had 32 letters after his name. The “soup” represents the certifications and designations that professionals have obtained to increase their knowledge and improve the quality of their advice and services.

It is unfortunate, but the letters themselves do not mean much to investors. They recognize CPA®, but have no idea what PFS (Personal Financial Specialist) stands for. That’s about it. Very few investors have any idea what CFP® stands for. Even fewer know the value or requirements of CFA® or CIMA® designations.

Based on the number of letters that appear after some advisors’ names, their strategies seem to be quantity is more important than quality. I believe it is way more onerous than that. Unscrupulous advisors “buy” multiple designations and use them in their sales pitches so they appear to be planning and investment experts. At the least this is how they represent themselves to investors. Regardless of strategy or intent, this is a deceptive sales tactic that works almost 100% of the time because investors don’t know a good designation from a bad one.

Because this strategy works it impacts your marketing results. Investors select your competitors because they believe they are more qualified than you. How do you compete with these advisors without appearing to be just another advisor who is bad- mouthing a competitor? You need a strategy for alerting investors when advisors use this deceptive sales practice, but do it in a way that does not reflect badly on you.

You can encourage investors to conduct their due diligence on designations or use a free, easy to use online solution. I founded a website (www.InvestorWatchdog.com) that has a free tool that investors can use to research certifications and designations. Watchdog staff has already researched more than 200 of them. The website documents the sponsor, prerequisites, curriculum, testing method, and continuing education requirements. If the designation is not already on the system Watchdog staff will research it for them and email the results in three business days or less. This is also a free service. Go to the Watchdog’s website and click on Get the Facts (top navigation) and Certifications (drop down) to open the function.

Why protect investors? Watchdog’s team found 10 very high quality designations (CFP®, CFA®, CIMA®, etc.), 25 good designations, 65 mediocre designations, and more than 100 that are worthless or outright scams. Unscrupulous advisors buy these designations for a few hundred dollars. There are no prerequisites, curriculum, testing, or continuing education, but investors don’t know that.

Jack Waymire spent 28 years in the financial services industry. For 21 years he was the president of an RIA that provided services to more than 50,000 investors. He is the author of Who’s Watching Your Money?, the first book that provided an objective process for selecting higher quality financial advisors.  He is the founder of two major websites, www.InvestorWatchdog.com for individual investors and www.PaladinRegistry.com for financial advisors.  He is a columnist for Worth magazine, a blogger on major financial websites, and is frequently quoted by the media. 

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