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Do Advisor Designations Matter?

Spectrem's research indicates attorneys and accountants look at an advisor's certifications but do not rely on them when making a referral. 

| BY Kent McDill


If they choose to do so, financial advisors can gather a long list of accreditations and certifications to prove their worth and knowledge in the field of investment and financial planning.

But when attorneys and accountants look for an advisor to work with their clients, do they immediately check an advisor’s certifications to ensure that the person they are referring their clients to are reliable and knowledgeable?

According to Spectrem’a newest qualitative report Gatekeepers: Their Influence on Referrals and Wealth Transfer, the answer is yes and not so much.

When attorneys and accountants have clients in need of expert investment assistance, they often have a list of advisors with whom they have a prior relationship. It is someone they have trusted with clients in the past, or have had some other type of working relationship that has worked well enough to want to continue a mutually beneficial coexistence.

Those professionals who cultivate professional relationships with advisors in order to assist their own clients with their financial and investment needs act as Gatekeepers, protecting their clients from poor or unscrupulous advisors.

The designations advisors can acquire are many, and they include CFA (Chartered Financial Analyst), CFP (Certified Financial Planner) and CIMA (Certified Investment Management Analyst). But the Gatekeepers view the designations as proof of expertise and training in the field of financial management, but not proof of honestly, trustworthiness, or attitudes towards clientele.

“It’s not as important to me,’’ said one Gatekeeper. “I don’t care about that stuff.”

The Gatekeepers are merely making recommendations, and often recommend more than one. The professional designations serve as a way to indicate to the Gatekeeper’s client that the advisor being recommended has done his homework

“People are impressed with designations even though many of (the clients) don’t really know what that means,’’ said one attorney.

Investors say they care about advisor designations, just as they say they care whether their advisor is a fiduciary. Seventy-five percent of Millionaire investors say it is important to them that their advisor have professional registrations or licenses.

Often, however, investors are unaware how difficult, or simple, it is for advisors to get their designations. The CFA, for instance, is difficult to attain initially and requires continued education to maintain.

Occasionally, the Gatekeepers are also unaware of the significance of the designations as well.

“I guess we should be a little bit skeptical,’’ said one accountant. “I don’t think the designation is anything but a formality. It’s good to have that formality and plenty of people have a designation but don’t seem to know how anything works.”

The other criteria Gatekeepers use to determine whether they are going to refer a financial advisor include fiduciary status, the size of the advisor’s firm (in relation to what the client would be comfortable with), and personality, of course.

“I always consider personality, because all of my clients have different personalities, as do I,’’ one attorney said. “If the client is more sarcastic, I try to match them with somebody who is more sarcastic. If they are straightforward, and want everything laid out to them, then I will get somebody who’s very straightforward.”



About the Author

Kent McDill

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.