We got a great and interesting response to this week’s reader poll — apparently designations do matter… to some.
It’s not surprising. Ours is a complex and ever-changing industry, and getting — and staying — on top of the latest developments (not to mention understanding the fundamentals) is an essential component of developing and expanding a successful practice, as you help your plan sponsor and participant clients.
But as we all know, all certifications are not created equal.
Most Important Criteria
As for the things considered most important in a professional certification/designation, readers cited the following (more than one item could be selected):
- 88% — Educational value
- 78% — Market recognition
- 69% — intellectual rigor
- 42% — Compliance approval
- 24% — Cost
- 15% — Time required to acquire
- 7% — Referral by trusted friend/colleague
- 4% — Convenience
Indeed, when it came to the one thing considered most important, readers also went with educational value (41%), followed by:
- 30% — Market recognition
- 22% — Intellectual rigor
- 5% — Compliance approval
Among the credentials possessed by respondents, the Accredited Investment Fiduciary (AIF) was most common, held by roughly 39%. Other popular certifications were:
- Qualified Pension Administrator (QPA) (32%)
- Qualified 401(k) Administrator (QKA) (30%)
- Qualified Plan Financial Consultant (QPFC) (19%)
- Chartered Retirement Plans Specialist (CRPS) (18%)
- Certified Pension Consultant (CPC) (12%)
- Certified 401(k) Professional (C(k)P) (9%)
Roughly 4% were working on NAPA’s new Certified Plan Fiduciary Advisor (CPFA) certification.
‘Best’ Credentials
As for which certifications respondents thought were “the best,” Certified Pension Consultant (CPC) topped the list (cited by 35%), followed by Qualified Plan Financial Consultant (QPFC) (cited by 26%), Accredited Investment Fiduciary (AIF) (cited by 22%), and both Qualified 401(k) Administrator (QKA) and Qualified Pension Administrator (QPA) cited by 19%.
Respondents felt that the AIF was most valued by their clients (28.6%), followed by 17% who cited the Qualified 401(k) Administrator (QKA) and then 12% each for Certified 401(k) Professional (C(k)P), Certified Pension Consultant (CPC) and Chartered Retirement Plans Specialist (CRPS). However, the most telling statistic is probably that nearly half (46%) said that their clients valued “none of the above.”
Indeed, as important as respondents felt the designations/certifications were (at least some of them), it was clear that respondents didn’t think their customers shared that perspective. Wrote one: "I think if there were a way to 'market' the designations better to our clients so that *they* could see the value of them it would encourage more people to attain the designations. This in turn would strengthen our industry overall. Also, maybe we could somehow get rid of the ones that don't really mean anything so that the ones that are left actually are worth the time and effort."
Do Plan Sponsors Care?
Do plan sponsors care? Not much, apparently, at least in the perspective of survey respondents. “Some string of letters behind your name is more to the point of what they care about,” noted one respondent. “My clients are largely unaware of what the designations mean,” said another, while yet another explained, “It matters for a split second in the selling process, that’s it.” Or as one reader noted, “They couldn't tell you the difference between ABC and AIF.”
Other comments included:
- I'm not sure they know or care about the credentials.
- Many of these designations may as well be alphabet soup to clients. Nobody knows what they are.
- Clients generally aren't aware of the designations we hold so dearly in the profession.
- Honestly, I don't know if my clients actually have any idea what any of the designations mean.
- I'm hoping they value QKA because they see it at the end of my signature, and I do know quite a few of them actually value me and the role I perform.
- I don't think clients can tell the difference between any of the above. Some clients know CFP, but in the aggregate they don't know any of these. But having them leads to questions and dialogue which can be helpful.
- These designations are all just alphabet soup to our clients, they cannot tell one from another. On face value, they don't value any of them because it seems there are too many and everyone has one (or more).
- I am not sure that my clients value any of the designations; they have never mentioned them and I personally have not talked to them about any designations I or my colleagues have.
- They are out of control and many are meaningless due to multitude.
Too Many Credentials?
Many readers commented on the sheer volume of possible credentials. ”It's obviously a huge alphabet soup of designations and a range from nonsense to highly professional,” said one reader. “I am always skeptical of new designations as they often are thinly veiled attempts to generate revenue rather than really advance the profession. We need fewer, not more, designations and outreach to educate sponsors on the value of a designations/credentials that actually have meaningful requirements and rigor.” Another observed, “There certainly are too many of them, and even for me, in the business, I can't keep track of what they all mean.” An even more succinct perspective came from the reader who said, “The volume of credentials in this industry is ridiculous.”
There were also issues with the certifications themselves — or more precisely, their administration:
- It would be great if every industry event counted toward a common set of CPE but then the certification creators would have less influence.
- Certifications and CE should be my “acid test” or my competency test... not for marketing; if I don't know how to deliver the work, it does not matter what my certification is. The educational content helps me deliver services correctly. A lot of advisors have the title, but very little practical knowledge of plan management.
- I think it's ridiculous that in order to keep my designation I have to go to my designation's conference every year. Forcing me to fork over a few grand every year to “keep” my designation.
- There's way too many designations and the majority are “light” in nature. Not sure how to correct that, it's probably a “horse is out of the barn” situation, but it seems a little silly to me that there are so many and many offer very little.
- There are too many designations and they just water down everything. Work to get some coverage of plan fiduciary matters in either the CFA or CFP curriculum.
Not that it has to be that way. One reader explained: "I think that there should be some prerequisite, a minimum entry cost (or a ticket, if you will) for retirement plan consultants to be permitted to serve as consultants or advisers over retirement plans. I always felt that it was somewhat ridiculous that a Series 6/63 is all that was required to be allowed to sell a 401(k) plan. Designations, if done right, can have a way separated experts from non-experts. That's important."
But this week’s Editor’s Choice goes to the reader who noted, “If you have too many, clients think you spend too much time taking tests and not enough time serving your clients.”
Thanks to everyone who participated in our reader poll! Got a suggestion for a future reader poll? Post it in the comments below, or email me at [email protected].
