Just when Americans seem more desperate than ever for trustworthy investment advice, financial advisers are brandishing a baffling array of new credentials—some of which can be earned with minimal or no study and a few hundred dollars.
Increasingly, say regulators, financial advisers are using these dubious designations as marketing tools to win the trust of older, wealthier clients, in hopes of selling high-fee investments that aren’t appropriate for them.
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“State securities regulators have been very worried about this,” says Denise Voigt Crawford, securities commissioner for the state of Texas and past president of the North American Securities Administrators Association. “We are taking a growing number of administrative actions against people using designations as part and parcel of fraudulent securities activities, especially with older people.”
Professional certifications arose decades ago as a way for firms in various industries to identify qualified practitioners.
“To my knowledge, I have not had a complaint from anyone who has confused the CFA and the CRFA mark,” says Ms. McColl.
In much the same way, the CSFP, or chartered senior financial planner, credential could be confused with the certified financial planner, or CFP, designation. The CFP, established in 1972, requires that students pass the equivalent of 15 credit hours of college-level courses, culminating in 10 hours of exams.
The CSFP, launched in 2003, requires a three-day review course and the passing of one two- to three-hour exam.
CSFP holders are required to spell out “chartered senior financial planner” in their marketing materials, says Stewart Davidson, president of the Association of Chartered Senior Financial Planners.
The American Academy of Financial Management, based in New Orleans, awards numerous designations, including the CAM, CMA, CPM, CTEP and CWM (chartered asset manager, chartered market analyst, chartered portfolio manager, chartered trust and estate planner and chartered wealth manager).