Alphabet wise

If you happen to be in Windsor and run into Jeff Pocock, consultant with the Investors Group, beware he might be armed. His shootin’ irons hang from his belt loop but never actually go bang—they’re little cue cards crisscrossed with red, orange and yellow highlighters, and replete with industry acronyms that he jokingly calls his "intellectual ammo."

As you’ve likely guessed, Pocock is gearing up to tackle the Certified Financial Planners (CFP) exam this fall. He’s required to surmount the four E’s before he’s deemed CFP-certified: education, examination, experience and ethics. The cue-card experiment, he hopes, will arm him with ethical rigour and technical expertise.

"The certification gets you to a point where you’re not just pushing products for big fat commissions," Pocock says. "The exam trains you to think, synthesize and apply the knowledge."

For Pocock, who spends from 10 to 15 hours studying every week, the results have started showing even before the exam. "When I’m with clients, I realize my knowledge base has definitely increased."

The Investors Group offers incentives to advisors who pass the CFP exam within five years. The certification also enhances insurance premiums and commissions.

Impress ‘Em Ethics and education apart, another equally important aspect of credentials is they make perfect marketing sense for advisors seeking new clients.

Most advisors attest alphabets add credibility. They’re always a good way to differentiate your services from everyone else’s.

And sure enough, financial advisors these days come in an alphabet- soup array, including chartered financial analysts (CFA), chartered life underwriters (CLU), certified financial planners (CFP) and allied designations such as chartered financial consultant (Ch.FC) and certified trust and financial advisor (CTFA). Tax lawyers, stockbrokers and investment managers round out the mix.

Bruce Cumming, founder of Cumming & Cumming Wealth Management Inc., has more bits of the alphabet after his name than in it—thirty to be precise. And he isn’t done yet. Already a CFP, RFP, CLU, Ch.FC, RHU, CIM, TEP, and EPC, Cumming will soon add FCSI (Fellow of the Canadian Securities Institute) to the list. By 2009, he’ll also be certified as a divorce specialist.

So far, Cumming has met just one person with more lettered credentials—Peter Wouters, director of advanced planning for Empire Life, who has forty. And that’s where Cumming’s headed. "I’ve worked hard not to be a generalist, but an expert in all the areas of financial planning,” he says. "If I’m going to ask people personal questions about their financial lives, I want to be an expert on all topics.”

With his two university degrees, and eight professional designations, Cumming knows he’s different. And different, he says, means better. "Designations give me the comfort that I can help my clients; the knowledge makes me feel worthy of asking those intimate questions,” he says.

Nathan Parkhouse, a financial advisor with Parkhouse Financial, already has CFP, CIM, FMA and FCSI trailing his name. And while he’s got absolutely nothing against the vigorous pursuit of education, he admits having to list more than five designations on the business card can be slightly over-the-top.

And not every advisor chooses to take letters. There are plenty of practising advisors with bulging books and zero designations. But, while that’s true, Parkhouse says the more successful, newer practitioners are now trending toward credentials. He cites colleagues at his firm who already have fat books of business but feel the need to be certified.

And the CFP, according to Parkhouse, is by far the most client-recognized designation. So the Parkhouse advice? "All those who can, should take it.”

Beyond the CFP and CSA, most other designations are phonetic mumbo jumbo. They look impressive on the letterhead but don’t mean much to the lay customer.

Nonetheless, says Pocock, credentials impress because they convey that the advisor is committed to keeping current. "Most advisors operate in a warm market— among friends and family. If they wish to get out into the cold market and succeed, they need to offer more.”

That’s why, when Pocock cold calls, he likes to add a third dimension—credentials. He finds them especially helpful with the high-net-worth, who tend to be more discerning.

Oddly, however, even though highly coveted, of the 50 advisors at the Investors Group in Windsor, only about eight have their CFPs.

The reason, Pocock says, is that unlike clients, the fraternity are sometimes more envious than admiring. "There’s almost a bit of bragging: ‘I can do the same job without the training,’ ” he adds. "Too many advisors try to justify professional laziness by arguing, ‘I don’t need it. It’s about numbers, not certificates.’ “

Cumming disagrees. Designations, he stresses, are the hallmark of a true professional. His challenge: If you think you’re good enough, prove it by sitting for the exam.

"It’s disappointing that in our industry advisors think they can practise without being certified. When people won’t go to a doctor, lawyer or accountant if they aren’t certified—it’s just too bad they go to financial advisors without designations,” Cumming says.

While older, more experienced advisors could get away without certifications, in Parkhouse’s opinion, for newer advisors who don’t have much experience under their belts, such bravado might not help. "It definitely makes sense to take at least the CFP,” he says.

Pocock predicts getting certifications will become an industry standard in the next ten years, adding that they’ll be viewed as a minimum requirement.

Acing the Alphabet When taking certification exams, some advisors find it best to simply throw themselves into the fire—book the exams even if they don’t feel ready. They suggest getting an exam date within two weeks of taking the course, because if you have a six month window you’ll never really do it.

Despite being among the most certified advisors in the industry, Cumming still gets nervous about exams. He takes advantage of professional prep courses whenever they’re available. Otherwise, it’s all self-study.

For Pocock, consistent persistence is the name of the game. He suggests taking prep courses, because they "give you structure.”

Case studies tend to psych Pocock out. Here’s how he deals: Skim through the case study, don’t try to read it front to- back. Then look at the questions. If a question tests for some general concept, you don’t need to delve into details. If it’s specific, then go back to the relevant sections and mine Mr. and Mrs. Jones’ ages, medical conditions, and so forth.

The key, for Parkhouse, is time management. "You’re essentially going back to school, and if you’re taking the exam concurrent to your work, you need to have a time management plan,” he says.

"Crash courses help get a perspective on what items to concentrate on. But don’t treat them as a substitute for the groundwork,” he warns.

Michael Hlinka, instructor at the School of Continuing Education at the University of Toronto, tells advisors to treat the taking of a certification exam as a part-time job. "Determine your hours, and stay on schedule. Go about creating the template of an organized course.”

From an instructor’s perspective, Hlinka advises against rushing the process. "You don’t do yourself or your clients a service by cramming concepts, you need to understand them.”

Whether you cram, take a crash course or go back to school to get certifications, the bottom line, Parkhouse says, is to do something.

"In today’s world, it just doesn’t make sense not to provide a visual proof to clients that you’re committed to education, especially when you’re managing their money.”