It appears that a Senate Special Committee on Aging doesnâ€™t take lightly that the financial services industry has numerous designations which give the appearance of credibility when there may not be any. In an article in Financial Advisor Magazine in October 2007 entitled â€œCongress Grills â€œSeniorâ€ Advisor Designationsâ€ Tracey Longo warns advisors that taking weekend seminars to add letters behind your name may not be such a good idea. State securities regulators are making a model which imposes fines and jail terms on those that use the designations to mislead investors. The CFP Board, which oversees 55,000 advisors/planners that qualify for the CFP Certificate submitted a written statement indicating that they support curbing the use of â€œquestionableâ€ designations. While these designations may shed some light on areas of planning that could use further study, holding oneself out as a â€œspecialistâ€ may better serve the public rather than through a misleading certification which often times is earned from going to a weekend class and passing an open book test.
The public needs to be able to differentiate between a legit financial advisor and a shady salesman. The industry needs to tighten the definition of what constitutes an advisor. CFP certificants not only take intense graduate level courses on the foundations of financial planning, they are also required to pass a two-day, 10 hour exam, many of which have a national pass-rate of 50% or less. Furthermore certificants are required to have 30 hours of continuing education every two years. The National Association of Personal Financial Adivsors (NAPFA) requires its advisors to have a minimum of 60 hours of continuing education every two years. They also require that their advisors sign a Fiduciary Oath, abide by their Code of Ethics, and be compensated only by fees paid by the client (Fee-Only), reducing conflicts of interest inherent in other forms of compensation. While some organizations such as NAPFA and the CFP Board of Standards are trying to hold their members to a higher standard, others are selling letters.