Financial Advisor Certifications, Titles, and Pedigrees
[See our Disclaimers page about relying on this website’s contents.]
“Professor” Herald Hill, the con-artist from the acclaimed musical The Music Man, wowed River City, Iowa, with his fancy talk and fake credentials. The magic of Broadway and Hollywood gave us a happy ending that does not often appear in the real world. When consultants, salesmen, and advisors waive their certification credentials around we must be sure that their claimed knowledge and skill are authentic.
Certified designations such as CSS, CSA, CFRA, CSFP, and ARA are confusing a lot of people. An article entitled Alphabet Soup: Industry Churning out Dubious Designations, published on the internet by Robert Powell at CBSMarketWatch.com on July 21, 2004, indicated that proliferation of these credential designations is increasing as the “baby boomers” approached retirement age. Caroline Mayer gave a more scathing critique in a 2013 Forbes.com article, entitled Watch Out For ‘Senior Specialist’ Financial Advisers, saying that some credential holders may just want “to use their lofty titles as marketing ploys to lure clients.” On May 31, 2015, Anne Tergesen wrote in the Wall Street Journal’s WSJ.com article entitled “Credentials to Look for in a Financial Adviser,” “Each month, it seems, financial advisers find a new credential to attach to their names, one they hope will help them snag more business. Many of these designations hold little meaning, but at least a few may be worth your time.”
So how can an ordinary person figure out whether a professed investment advisor’s credentials are legitimate? The Financial Industry Regulatory Authority (“FINRA”) publishes a professional designations glossary tool on its website to help investors understand the various advisor credentials. The U.S. Securities and Exchange Commission offers guidance about using investment advisers on its website entitled Investment Advisers: What You Need to Know Before Choosing One.
Unlike some of the dubious investment advisor credentials, state law generally prohibits attorneys from identifying them as specialists unless they satisfy certification requirements established by their state supreme courts. Under Indiana Law, each certifying organization must obtain authorization as an independent certifying organization (commonly referred to as an “ICO”) from the Indiana Commission on Continuing Legal Education (the “ICCLE”). Presently, the ICCLE has authorized ICOs to distinguish specialists attorneys in these specialty areas: Business and Consumer Bankruptcy and Creditors’ Rights; Civil Trial Advocacy and Criminal Trial Advocacy; Elder Law; Family Law; and Trust and Estate Law.
Attorneys can practice in almost any subject matter without specialty certification. Some lawyers have built such distinguished reputations in certifiable practice subjects that they choose not to seek certification because the certifications would not enhance their reputations meaningfully. Other lawyers with specialty certifications in some subjects practice without certifications in other related subjects, such as family law attorneys practicing civil trial advocacy and trust and estate lawyers practicing elder law.
If a potential advisor presents you with an impressive list of certified credentials, you may want to investigate how the advisor gained those credentials. If the advisor has no experience or formal training in the subject matter beyond the certification, you should suspect that “advisor” knows more about how to sell you something than how to help you make wise choices. A true expert is confident in his or her expertise and will not act defensively or irritably when you check out the expert’s credentials. When you compare an expert to a poser, the choice of which one to trust should be very clear.
Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and active members of the Indiana State Bar Association and National Academy of Elder Law Attorneys. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator, a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation; a member of the Illinois State Bar Association and the Indiana Association of Mediators; and he was the 2014-15 President of the Indiana State Bar Association.
Find more information about these and other topics at www.HawkinsLaw.com, add us to your Google+ circles, like us on Facebook, follow us on Twitter @HawkinsLawPC or call us at 812-268-8777. © Copyright 2015 Hawkins Law PC. All rights reserved.
