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Credential Evaluation

Credential Evaluation


I am often asked about my credentials, including the Chartered Financial Analyst (CFA) charter and the Certified Financial Planner (CFP®) designations, from aspiring advisors and clients alike. In the professional world, many companies and individuals focus on credential evaluation; which can help gauge an individual’s expertise.  In this article, I will evaluate these credentials and explain to what extent they matter. 

It’s important to acknowledge that in no way does someone having a few letters behind their name suggest they have capabilities beyond someone who doesn’t. However, there are three primary reasons I am glad I obtained the designations and how they have shaped me into a confident financial advisor. 

Importance of the CFP®

My profession has a unique, almost non-existent entry bar for anyone to call themselves an advisor/financial planner. The CFP®  designation can help “legitimize” an advisor in what can be an awfully confusing consumer experience.

Normally when you visit a doctor, dentist or lawyer you do not have to question their baseline knowledge. Of course, some practitioners are better than others but, in general, you know these professionals have gone through an education process that leads to a certain level of technical expertise in order to achieve their titles; there is no desire for credential evaluation.

Unfortunately, the financial service industry does not allow for this assumption. Our industry is incredibly vague in its definition of who “qualifies” as a financial advisor/planner – you can find brokers, insurance agents, and even some CPAs using the term.

The legal requirements are not cut and dry like that of a doctor, dentist or lawyer. The confusion and distrust this creates for consumers is a common cause of frustration.

CFP® Benchmark

While there are plenty of incredible advisors without any designations, the lack of clarity around a “qualified advisor” makes the CFP®  designation useful as a starting point for consumers. I have found the designation helps consumers identify an advisor/planner with the baseline technical expertise they should be able to expect any advisor/planner to have. I always encourage new advisors to pursue the designation to help them overcome this issue within our industry.

Benefits of Formal Schooling for Credentials

Another benefit of designations can be the career opportunities they help open for advisors/planners.

The CFA charter took over three hundred hours of studying and serious commitment to earn. While this took a toll on my social life, I can say that earning the credential allowed me to quickly get my foot in the door and garner faster consideration for two big promotions early in my career.

I gained additional confidence from the in-depth curriculum and developed expertise in my field. This confidence carries over in my conversations with clients, and showcases my commitment to the profession.

Make Yourself Stick Out

Courtesy of technology, advisors like myself can work with clients across the country, which in turn, means that we compete with advisors across the country. Anything you can do to highlight expertise through credential evaluation is to your benefit. Don’t be unrealistic, though. The designation might help start a conversation but, after that, it’s up to you to showcase your ability.

Be Aware…

Earning designations is not some end all be all. If you ever hear someone say something to the effect of, “you should listen to me because I am a CFA/CFP®“  – beware!

On top of that, just having technical expertise does not make you a good advisor. The soft skills of listening, caring and being proactive are equally, if not more so, important. Unfortunately, I don’t know that these skills can be confirmed without actually working with an advisor or getting a referral. Always start with a consultation before committing to a partnership. 

Technology Credential

Technology continues to change the landscape of the industry. You can now credential yourself in many different ways.

As NYU professor Scott Galloway says in his book, The Four:

“It’s never been a better time to be exceptional, or a worse time to be average.” (pg 230)

Some of the most influential advisors have found this truth. They do not carry designations, but they carry credentials of a different type. Some are volunteering in their community, publishing blogs, books, webinars and podcasts to broadcast their expertise. They are building tribes of loyal followers on social media and they are exceptional.

Conclusion: Credential Evaluation– do they really matter?

Without question, I am glad to have earned these designations. I know I have a lot more learning to do, skills to develop and credentials to add. But that will never stop. Credentials stop mattering the moment you think they prove anything. 

How does credential evaluation work in your field? What can you do to give yourself an edge over the competition? What steps are you taking to stand out?

Let me know and thank you for reading!

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