Challenge exam option introduced for CLU designation

(November 20, 2003) The CLU Institute is introducing a bridging program that will allow experienced advisors to obtain the Chartered Life Underwriter (CLU) designation by writing a single exam.

The normal route to the CLU involves completion of the CFP program combined with three specialized courses. The challenge exam recognizes that many non-designated advisors have acquired extensive skills and knowledge through hands-on career experience, says CLU Institute trustee Deborah Kraft.

“This will allow advisors who have many years of experience in the industry, but who do not currently hold a professional designation, to effectively demonstrate their knowledge,” adds CLU Institute chair Kristan Birchard. “Our goal is to offer these veteran advisors a one-time opportunity to put their knowledge to the test and be recognized for the valuable advice they offer their clients.”

Candidates must submit qualifying criteria, including relevant work experience and education programs, to write the exam. They must also be members of Advocis, which operates in partnership with the CLU Institute.

The institute is offering optional prep courses in advance of the first exam, scheduled for May 2004. The exam will “thoroughly test candidates on their knowledge of the concepts taught in the CFP and CLU curricila,” the CLU Institute said.

The CLU Institute will begin accepting applications for the bridging program in January and the prep course will begin in April. The last re-write exam will be offered in October. “Candidates will only have six months to participate in this program,” says Terry Taylor, chief operating officer.

The exam will cost $500 and the prep course costs $295. There are currently 3,600 advisors in Canada with the CLU designation.

Advocis has been actively campaigning to change the present regulatory system in Canada so that designations like the CLU become a requirement of advice-giving.

In a speech earlier this week at the Advisor Forum in Toronto, Advocis chair Brian Mallard said the current system, focused on financial transactions, not financial advice, must change.

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“It leads to higher costs and a much more complex business,” he said. “Ultimately, we see a decline in consumer confidence.”

Mallard says the Advocis solution is simple: embed the accreditation process in legislation. “That means an advisor should have a designation or be on their way to getting one, they should subscribe to continuing education, they should have errors and omissions insurance and they should follow practice standards.”

Under the Advocis proposal, the Financial Planners Standards Council, the Association for Investment Management and Research, the CLU Institute, and the Canadian Securities Institute would be responsible for their corresponding designations: CFP, CFA, CLU and FCSI.

“It’s a partnered SRO concept,” Mallard said. “We should work with the regulators and take the things away from them that they can’t economically and logically deliver.”

Advocis has embarked on a letter-writing campaign to promote the concept and is asking advisors to participate. Mallard says the December issue of Advocis’ Forum magazine will include postcards advisors can send to regulators and politicians.

“I think that if an MFDA director got 10,000 postcards they might begin to understand the frustration and the anger that you feel on a day to day basis — and they might be motivated to make some changes,” Mallard said.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

(11/20/03)

Doug Watt