Talk Straight When It Comes to Industry Designations

Red Flag Reminder #103 - 7/29/06 - If you have an industry designation, you need to be careful how you represent those letters to your prospects and clients.  That’s the lesson learned from the recent spate of bad publicity about “senior specialist” designations.

Insurance and financial advisor misuse of designations—everything from using credentials offered by phony organizations to misrepresenting valid designations—has aroused the ire of regulators. 

“Individual may call themselves ‘senior specialists’ to create a false level of comfort among seniors by implying a certain level of training on issues important to the elderly,” says NASAA President Patricia D. Struck. “But the training they receive is often nothing more than marketing and selling techniques targeting the elderly.”

In the last year, some 26 cases were opened involving “senior specialists” in the Eastern U.S., she said.  They involved advisors securing a senior-oriented designation and using the added credibility to convince prospects to liquidate securities and to use the proceeds to buy insurance products.  Since the advisors weren’t licensed as investment advisor representatives, they were operating without a license and subject to enforcement action.

So if you’re interested in picking up a senior designation, keep these issues in mind:

• What are your motivations for attaining the designation?  If you just want to learn more about the needs of the senior marketplace, that’s one thing.  But if you are looking for a credential to catapult you into the senior marketplace, that’s quite another.

• How should you position the designation with your clients?  Do you just describe the subject matter covered or do you push the envelope, suggesting it qualifies you to do comprehensive financial planning?  If you don’t already have financial planning training and credentials, a senior specialist designation will not make you an expert senior planner.  So don’t say—or imply—that.

• Have you done your due diligence on any designation you’re considering?  Is the course work substantial enough to merit the term “designation?”  Does it have a track record?  Is it offered by a real and credible organization?

Given how complex our business has become, studying for designations is great; it makes you a better advisor.  But using designations to create false impressions and to steer prospects into unsuitable products is not only unethical . . . it’s illegal.

What “Red Flags” are affecting your business? The National Ethics Bureau welcomes your input. Send your comments to: redflags@ethicscheck.com