Why it is important to choose professionals with accredited certifications?

Evaluating Advisor Designations

Depending on who you talk to there are between 150 and 300 designations available to retirement advisors today. The alphabet soup bowl of designations is so large that not even the financial services industry can track them all. Some of the more credible designations require a valid assessment of knowledge and ongoing education and are independently accredited. Others mislead consumers about the rigor associated with obtaining the designation and may be earned in a weekend after paying a few hundred dollars and attending a seminar. But make no mistake, financial services professionals should be encouraged to participate in credible professional development programs that show consumers that they have demonstrated competency in a particular subject matter. So how do you tell the good designations from the less credible?

Below are the attributes you should be looking for in a credible designation:

  • Is the organization conferring the designation a non-profit company and is not primarily a marketing organization?
  • Are candidates required to pass a valid and reliable exam based on sound psychometric standards that measures competency?
  • Is there an enforceable code of ethics whereby violation may be easily reported and lead to disciplinary action or revocation of the designation by an independent Board of Standards?
  • Are designees required to meet continuing education requirements that ensure they maintain up-to-date knowledge and best practices?
  • Are candidates subject to a background check before being awarded the designation?
  • Has the designation been independently accredited by accreditation body operating under a national or international standard? See more on the importance of accreditation below.

The CRC® is an Independently Accredited Certification

Many states have enacted regulations that restrict the use of less credible professional designations. Many of these states have special exemptions from the more stringent requirements if the designation is offered by an accredited institution of higher education or is independently accredited by either one of two accrediting organizations.

Although “institutional accreditation” is an appropriate and valid means of ensuring the public that institutions of higher education are meeting certain standards, “program accreditation” requires that each specific certification program demonstrate adherence to rigorous standards related to governance, responsibility to stakeholders, exam process, and recertification with continuing education requirements.

It may take up to two years to become accredited while completing a process that includes creating an up-to-date comprehensive practice analysis, linking the practice analysis to a psychometrically valid and reliable exam that measures competency and submitting a comprehensive application. Clearly, an independently accredited certification program requires a more credible process for certifying advisors than programs that are conferred by accredited colleges and universities. Sadly, fewer than 5% of financial services industry designation programs have gone through the rigorous process of independent program specific accreditation.

Click hear to go to the FINRA website to review many of the more common designations and there requirements. Further down on the same page you may link to a map of states that have enacted regulations pertaining to the use of professional designations. Note that FINRA does not endorse or approve any professional designation.

The Certified Retirement Counselor® (CRC®) program is independently accredited by the National Commission of Certifying Agencies (NCCA).