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Sound Advice: April 19, 2023

More Advisor Alphabet Soup

One can only be amazed at the creativity of those who would be too happy to sell advisors even more letters to follow their names.  Those who are naïve probably figure that the more letters there are, the stronger the credentials of the advisor.  My sympathies to those who actually believe that.  Indeed, an easy rule of thumb to follow is that once the string gets past two sets of letters it’s probably an indication of someone to be avoided.  Yet, there are always those who will be happy to sell you a small part of the alphabet for a fee.

Just recently, I received an email from the International Association of Registered Financial Consultants (IARFC), which claims to support “. . . the financial professional with a distinct Mission (capital M), a strong ethical code, and a recognition of your experience, education, and licensing through designations and an accredited credential.”  Wow, what a mouthful.

For fees ranging between $200 and $600 (plus annual renewals), the IARFC offers several membership levels.  No experience, no problem.  Just send in $200.  Less than three years’ experience, that’ll cost you $250, which gets you the letters RFA: Registered Financial Associate.  I have no idea where the person will be registered.  One thing’s for sure, this is not to be confused with Registered Investment Advisor, which requires filing with state or federal regulators.

At the top of this heap is Master Registered Financial Consultant, which requires experience of four years or more, not exactly a heck of a lot of time.  Even so, you can bet that there are ostensible financial advisors who buy in to this nonsense and most assuredly some consumers who still believe in the man behind the green curtain.

There are loads of others to be avoided.  Some are certifications specifically for selling particular types of financial products.  Others target religious groups and seniors. And then there are certifications that use letters to mirror high-quality credentials.  For example, don’t confuse CFPN (Christian Financial Professionals Network) with CFP, the legitimate certification for Certified Financial Planners.

As you might suspect, efforts by the wrongdoers get even worse.  Just remember that CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), CPA (Certified Public Accountant), and CIMA (Certified Investment Management Analyst) are those that are legitimate and meaningful.

For any of the others, it’s odds on that they’re garbage.

N. Russell Wayne, CFPÒ

Any questions?  Please contact me at nrwayne@soundasset.com


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