Planners' association: some designations "are essentially marketing tools". The Financial Planning Association (FPA) is supporting a rule proposed by Massachusetts securities regulator that's intended to keep financial-service professionals from using "misleading" professional designations.

There is "a bewildering number of designations currently in use in the marketplace that denote high levels of experience and expertise when, in fact, many are essentially marketing tools and nothing more," the FPA says in a comment to the Massachusetts Securities Division (MSD), the state's investment-industry watchdog.

Massachusetts is the first state to consider limiting the professional designations used by broker-dealer agents and investment-advisory representatives. The FPA says that other states considering similar limitations will be watching how things go in Massachusetts.

Baby in the bathwater

With that in mind, the FPA said in its letter to the MSD that the state agency should take pains "to develop uniform and objective criteria to ensure that meaningful designations are not included in the prohibition."

For example, the Certified Financial Planner (CFP) designation "embodies reliability and expertise because of the comprehensive education, experience and ethics requirements enforced by CFP Board [of Standards]," says the FPA in its letter to the MSD.

The FPA says that 70% of its 28,000 members are CFP "certificants."

CFP certificants have to attend 250 hours of classroom instruction for each of its three levels, pass three examinations and acquire at least three years of post-graduate experience before they can use the CFP mark. The CFP designation is also recognized by the National Organization for Competency Assurance, one of the MSD's proposed criteria for approving use of a designation.

As an example of an accreditation he considers flimsy, Robert Neil, the Denver-based FPA's Washington, D.C.-based assistant director of government relations, points to the Certified Senior Adviser or CSA designation, which he says can be obtained by taking a three-day course and completing a multiple-choice exam.

There are now "way too many titles floating around out there which imply expertise where none exists," says Neil. "The public is entitled to a little truth in advertising by their financial advisor[s]."

Last December the Washington, D.C.-based North American Securities Administrators Association, or NASAA, launched a campaign urging senior citizens to look behind the credentials of those who hold themselves out as "senior specialists."

Though "there are legitimate organizations whose members must complete rigorous programs of study, pass extensive examinations, and have practical experience in order to receive their designations, a number of entities formed in the last few years have created designations with less stringent requirements," NASAA, an investor-advocacy association, says in a 5 December 2005 press release.

The NASD's website includes a page with descriptions of financial-service designations. -FWR

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