Skip to main content

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


Comments

Post a Comment

Popular posts from this blog

Sound Advice: March 10, 2021

The ABCs of Stock Picking After decades of analyzing stocks (and funds) and investing for clients, I'm happy to share in plain English what's involved, what works, and what doesn't.  Keep in mind the reality that successful stock picking is an effort to maintain a good batting average. In baseball, a batting average of .300 or better is considered quite good.  With stock picking, you need to do better than .600, which means you have many more winners than losers. No one gets it right all of the time.  It's not even close.  Wall Street shops all have their recommended lists and the financial media regularly hawk 10 stocks to buy now. Following that road usually is a direct route to disaster.  Don't be tempted. Let's begin with the big picture: The stock market goes up and down over time, but the long-term trend is up.  When there's a rally under way, everyone feels like a genius.  When the market hits an air pocket, though, with few exception...
Post a Comment
Read more

Sound Advice: January 3, 2025

2025 Market Forecasts: Stupidity Taken To An Extreme   If you know anything about stock market performance, you can only gag at the nonsense “esteemed forecasters” are now putting forth about the prospective path of stocks in the year ahead.   Our cousins in the UK would call this rubbish.   I would not be as kind. Leading the Ship of Fools is the forecast from the Chief Investment Strategist at Oppenheimer who is looking for a year-end 2025 level for the Standard & Poor’s Index of 7,100, a whopping 21% increase from the most recent standing.   Indeed, most of these folks are looking for double-digit gains.   Only two expect stocks to weaken. In the last 30 years, the market has risen by more than 20% only 15 times.   The exceptional span during that time was 1996-1999, which accounted for four of those jumps.   What followed in 2000 through 2002 was the polar opposite: 2000:      -9.1% 2001:     -11.9% ...
Post a Comment
Read more

Sound Advice: June 17, 2020

Rock and a Hard Place Regardless of your age, impressions from childhood linger.  As the first days of summer approach, we all remember the feeling that accompanied the end of a school year.  Yet as much as many of us would like to believe we again have the summertime freedom to do as we wish, the reality is quite the opposite. Although months of confinement and limitations on social interaction have increased our personal discomfort and severely impacted the business community, our current situation is not analogous to the end of any school year.  It’s quite the opposite. There is every reason to continue wearing face masks, social distancing, and avoiding close contact with others.  Nothing suggests that we can modify our behavior significantly or resume patterns of daily living we enjoyed only a few months ago. There are no meaningful advances in medical treatments.  At best, there are attempts to combine different approaches...
Post a Comment
Read more