CFPB Takes on Financial Designation Titles

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CFPB Takes on Financial Designation Titles

Apr 24, 2013

The Consumer Financial Protection Bureau (CFPB) has honed in on an important question: What do the various "senior designation" titles that financial advisers use to market their services really mean? As an answer, the CFPB recently delivered a report to Congress and the Securities and Exchange Commission entitled "Senior Designations for Financial Advisers: Reducing Consumer Confusion and Risks."

There are more than 50 different senior designations used in the marketplace, and while some do convey special training and experience in providing financial advice to seniors, others are a way to target older consumers and sell them "inappropriate and sometimes fraudulent financial products and services." In the topsy-turvy world of advice, a salesman can call himself an Accredited Retirement Advisor (ARA), even though the CFPB reported that this designation is not accredited at all.

How can consumers sift though the designations? The CFPB admits that seniors have insufficient information to determine the legitimacy and value of different senior designations. To help consumers, the report recommends the creation of a centralized tool through which senior investors can verify a financial adviser's designations; the establishment of a mechanism to capture complaints and enforcement actions against senior designation holders; and requiring senior advisers to disclose their qualifications and the meaning of the senior-specific certification.

Unfortunately, the CFPB did not weigh in on the elephant in the room: the fiduciary standard, a set of core principles that advisers can adhere to, most importantly their commitment to put the interests of their clients first. Consumers can eliminate many of the hucksters by only doing business with professionals who commit to the standard.

Because I receive so many questions about financial professional designations, I am once again repeating my favorites:

CFP® certification: The Certified Financial Planner Board of Standards (CFP Board) requires candidates to meet what it calls "the four Es": Education (through one of several approved methods, must demonstrate the ability to create, deliver and monitor a comprehensive financial plan, covering investment, insurance, estate, retirement, education and ethics), Examination (a 10-hour exam given over a day and a half; most recent exam pass rate was 62.6 percent), Experience (three years of full-time, relevant personal financial planning experience required) and Ethics (disclosure of any criminal, civil, governmental, or self-regulatory agency proceeding or inquiry). CFP [® professionals] must adhere to the fiduciary standard. Read more >

Chicago Tribune   
Jill Schlesinger, CFP®
April 24, 2013


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Among clients who work with an advisor, 87% of those working with a CFP® professional are satisfied or very satisfied, compared with 72% of those who work with an advisor without certification.
Anyone can call themselves a “financial planner.” Only professionals who meet CFP Board’s rigorous standards can call themselves CERTIFIED FINANCIAL PLANNER™ professionals.
The 2013 Household Financial Planning Survey shows that those with a financial plan feel more confident and report more success managing money, savings and investments than those without a plan.
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