Competing adviser certifications are causing confusion for retirees and other savers.
Leaders of the Financial Planning Association have recently advocated adopting the CERTIFIED FINANCIAL PLANNER™ [professional] designation, or CFP® [professional], as the industry's sole credential. "The idea of reducing consumer confusion is paramount," says Paul Auslander, volunteer president of the membership organization. The CFP® [certification] is one of the tougher designations: It requires that holders complete 15 college-level credit hours, plus take a rigorous, 10-hour exam administered by the Certified Financial Planner Board of Standards. (The first-time pass rate on that exam is between 52% and 57%, according to the board.)
Some prominent planners support the streamlining effort. Rallying the profession behind one designation will put the purveyors of flimsy credentials out of business, says Michael Kitces, director of research for Pinnacle Advisory Group, a wealth management firm in Columbia, Md. Kitces holds the CFP® [certification], among other designations. The minor designations have proliferated, he says, because consumers don't know the difference between credentials that require lots of study and those that don't – they just like to see letters after their planner's name. "A lot of organizations have thrived on being the simpler, easier alternative to the CFP® [certification]," he says. Read more >
September 14, 2012