Does a financial professional with a certification know more or have better strategies than one without a certification? By certifications, I mean the ABCs you often see after a professional’s name when it’s written. In personal finance, for example, you may see things like CFP (Certified Financial Planner), CRPC (Chartered Retirement Planning Counselor), CLU (Chartered Life Underwriter), and a slew of others.
But how many investors really understand the nature of these certifications? For instance, how many understand that by law a financial professional CANNOT offer them any financial products – or even advice – simply because they have a certification. That’s right – they cannot! Instead, the law requires that they have the appropriate jurisdictional license. This means, for instance, that a CFP or CRPC cannot offer folks, say, mutual funds, annuities, or individual stocks. You see, it’s the specific license that allows a professional to offer financial products. On the other hand, this also means that someone could have the legally required license to offer those very same products without having any certification.
So in effect, one doesn’t need a license to obtain a certification – and vice versa. Insofar as I know, in my specific field, you, dear reader, could go out and get certified right now, if you wanted to, by taking the course and associated exam – but it would be illegal for you to practice without a license. Interesting, huh?
Does that mean we can safely say that these certifications are luxuries, and not basic requirements? Exactly! In the interest of full disclosure, though, I must let you know that I have a few certifications of my own. While I personally believe that a certification may indicate a professional’s commitment to excellence and a keen interest in their profession, I must also point out that no certification, in of itself, should be the sole basis on which you – or any investor – should choose a financial advisor.
In fact, it might be wiser for investors to base their choices and/or decisions squarely on the actual meat of the proposal/plan, provided that the professional offering it is legally licensed to do so. When it comes down to the wire, what is most important? Those certifications that are not required by law and, let’s face it, do not literally benefit you as an investor? OR an honest, straightforward, thoughtful, respectful professional who actually cares about the wellbeing and success of your financial goals and shows you a realistic, workable, step-by-step plan?
Where Did the Certifications Originate?
These certifications are created by private organizations that exist to turn a profit, just like all businesses. For that to happen, though, they’ll have to solicit interested professionals, right? But how do you get those professionals to pay the fees for the required courses – and keep paying renewal and membership fees – without indicating that there’s some value in differentiating themselves from those who do not have the certifications? And what better way of achieving all of this than by encouraging the consuming public to think incredibly highly of these folks? So one can say it’s a win-win for the professional and the organizations offering the certifications. I must remind you, again, that I have couple of certifications myself.
Let me conclude by reechoing the point I made earlier: Do not do business with any financial professional – including myself – simply because of a certification he/she holds. Do it based on their track record and the practicality of the solutions they offer, because trust me – you won’t remember the certifications if your nest egg isn’t right there with you.
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To schedule your complimentary session with a skilled financial professional who has your best financial interests at heart, call Laser Financial Group at 301.949.4449 or visit us on the Web.
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