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Alphabet Soup and Disney

Money-Guy 02-01-2011

In this day and age, it is hard to navigate the financial landscape. It becomes even more difficult when the waters are muddied. Therefore, many individuals seek the advice and counsel of professionals. What happens, though, when those waters are muddied as well? How do you separate the wheat from the chaff?

I don’t think we could say it any better than Jason Zweig or Mary Pilon said it in their Wall Street Journal article titled Is Your Adviser Pumping Up His Credentials: Those Fancy Initials After Your Financial Adviser’s Name Might Not Be As Impressive as They Seem:

“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.”

This article is somewhat timely for our firm, Preston and Cleveland Wealth Management, as Bo will have officially earned his CFP® (Certified Financial Planner) designation on March 1, and he found out this past week that he was one of the 36% of individuals who passed Level I of the CFA (Chartered Financial Analyst) Institute’s 3-part exam process.

In the article, the authors share that many well established credentials in the financial arena (specifically mentioned: the CPA, CFP®, and CFA) require rigorous study, demanding continuing education classes, and enforce strict codes of ethics. However, just as the financial landscape has become more complicated, so too has the landscape of financial credentials and much of that space is occupied by credentials requiring ‘comparatively  little effort’ by the students. They share a number of alarming statistics as to just how many designations there are as well as how quickly they have appeared on the financial scene.

Many of the less rigorous designations sound similar in name to the more prestigious ones, however they may only require minimal study or nothing more than a registration fee. You may ask, ‘What is the incentive for advisers to ‘pump their credentials’? Well, the answer is quite simple. According to the article, “credentials can help advisers make more money. A 2007 study by FINRA’s educational foundation determined that 46% of older investors were more likely to accept financial guidance from someone with a professional designation. 17% of investors would be more receptive to advice from a ‘certified adviser for senior investing’, even though such a credential doesn’t exist.” The article even goes on to share case studies of individuals who were originally lured to an adviser because of his seemingly impressive pedigree, but were given very poor advice and even brought lawsuits against the adviser and his firm.

As you listen to the show, I share why I pursued the more rigorous designations early on in my career as well as why I have encouraged Bo to pursue the designations he is currently pursuing. If you are curious as to how your adviser’s credentials stand up, do some research! Specifically look for how difficult it was to obtain the credential and ask your adviser what made them pursue that specific area. Be weary of any that required minimal study efforts or registration fees only.

More Magic…Less Moolah

We asked a few weeks ago if our Premium members would like a special section in the Premium area for us to share how we are really able to stretch our dollars when we visit the Magic Kingdom. We had enough positive feedback that we would feel awful if we didn’t share our tricks of the trade, but the feedback wasn’t quite strong enough to warrant an entire section in the Premium area. Therefore, our compromise (and because it is fresh on our minds since we will be heading to Orlando this week), was to carve out the second half of today’s show to share how we are able to maximize our magic when we go to WDW.

I think you will be able to tell as you listen to the show just how excited we are. Disney truly is a magical place, and I am very excited that I am able to provide Bo with the opportunity to experience it first hand. As you listen, we share some valuable mobile applications, books, and websites that can help you capture the Disney experience in the most efficient and effective manner possible. Just like with your financial affairs, those who plan ahead are usually better off in the end (i.e. have a more memorable and fulfilling trip) than those who fail to plan. Be sure to listen out for some of these great resources  :

Mobile Apps

  • WDW Lines (App available for Members)



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