The financial services industry is loaded with “financial professionals” touting the letters behind their name on their business cards and pursuing the latest and greatest license, certification, and designation. I’ve been in the financial services industry and I have seen advisors obsess over these certifications like Gollum from Lord of the Rings and I have seen clients make multi-million dollar decisions over these licenses and certifications. So I want to address one single question today. Do they matter? My goal today is to show you why aside from being legal and regulated appropriately, these licenses really do not matter at all and have no correlation to the success of a client with an advisor that touts these fancy designations.
- There are basic licenses that must be obtained.
If your advisor talks to you about life insurance, he or she must have a state license to solicit insurance. If your advisor talks to you about retail market related financial products he or she must have state and federal licenses. What do these licenses do? Primarily, they put your financial professional under the jurisdiction of state and federal law, ensure your advisor knows what the state and fed want them to know about the regulated product/service, and ensure to product vendors and clients that an individual has passed the requirements to sell products and services in a given area. These licenses matter. It’s the equivalent of having a driver’s license. You wouldn’t take a ride from an Uber driver that had no driver’s license just like you wouldn’t take product recommendations from someone who had no license for that product.
- There are additional licenses that do not need to be obtained.
There are a large amount of designations that are not required, yet a high priority has been put on them. These licenses are things like the Certified Financial Planner (CFP), Charter Life Underwriter (CLU), Chartered Financial Consultant (ChFC), and even a Chartered Mutual Fund Counselor (CMFC). At one point, I was very focused on these designations. Within my industry, many of those I knew were obtaining them and it was like getting a gold star on one’s business card. What do these licenses really do? Well, an advisor must pay money, study curriculum, and then pass a test. Then it is common for the advisor to market the license as a differentiator from other professionals in their industry. So basically, it gives an advisor extra memorization on the subject of financial products and services.
- These additional licenses do not matter one bit.
Bold statement? I agree! Let me break this down for you.
a. A client who works with a CFP verses someone who is not a CFP is guaranteed absolutely no difference. The product or service will be exactly the same when buying from a non-CFP vs someone who is a CFP.
b. These licenses are often gimmicks to justify charging higher fees. That’s right. The only real difference when working with a professional designation is that they will probably want you to pay them for it. I call this entitlement. It’s like someone coming to work for me and expecting a higher paycheck simply because they went to college. College doesn’t mean they’ll be a good employee. I’m going to give them the same shot as everyone else.
c. These licenses are typically obtained by advisors who are not sold on themselves and produce low results. This isn’t a blanket statement because I have met 1 or 2 excellent designated professionals who are sold on themselves and do a good job. But here is the thing, a financial advisor is an entrepreneur. An entrepreneur’s value is gauged in the marketplace by the value they deliver to their clients. Value shows up on a top line or a bottom line. Either you help people make more money or you help them save money. If an advisor believes that the differentiator is a piece of paper rather than just doing an exceptional job at helping clients make money or save money, it means that the advisor lacks real value in the marketplace. Clients pay for results. A test and a license doesn’t produce results. Yes knowledge is important, but knowledge that does not create a noticeable difference in results is simply not valuable.
d. The information in these licenses is not worth the money paid for them by the advisor, nor the money charged to you the client. I believe competence is only measured by results. So if you are a working with a CFP that has access to the same products and a non-CFP, meaning that the same type of results will be produced either way then there wasn’t any real knowledge. A retail financial product is a retail financial product whether bought from a CFP, CLU, or CMFC. You’re buying the same product either way and getting the same result either way. Based on that, I do not believe any real knowledge is contained in those designations.
- Do the wealthy use them?
Look at those you desire to emulate. For me it is Rockefeller, Carnegie, Walton, Ford, Buffet, and others. They created real wealth. If we study them we find that they did not have these designations and that these designations were not even in existence for the majority of them. Yet they still built massive wealth. So if wealth has been obtained without these designations and before they even existed, what value do they actually bring? Additionally, look at the financial condition of the designees. Many of them are upper-middle-class at best and even more of them are paycheck to paycheck just like everyone else.
Don’t hire a financial professional because they have letters behind their names or have papers on their walls or because they passed the latest and greatest exam. Unless you’re paying them to help you pass tests, those skills and achievements mean absolutely nothing to your wealth. Look for those who produce results in their own lives, for their clients, and model those who have produced the wealth you desire. Often times, you neighborhood financial advisor isn’t where you desire to be. This means that their plan for you must be based on those who have achieved what you desire.
I help my clients make money, keep it, and multiply. I believe the best way to build wealth is to study the top 1% of wealth in history and model them. Success leaves clues. If we do things like increase our income, add new flows of income, save 40% of our gross income, invest in real assets that produce income, and other clues left to us by the top 1% then we will able to achieve what they achieve. And these clues have not been written down in some test that gets sold to financial advisors to tout to their colleagues and clients. Click here to get real results with you money.
Own Your Potential,
Jerry Fetta
Jerry Fetta helps his clients make money, keep it, and multiply it.
He believes everyone should own their potential. He believes you were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf.
His clients see a 30% increase in income, a guaranteed increase in savings rate, and 8-12% fixed annual returns on their assets in the 1st 90 days of working with him.
To get started, go to www.WealthDynamX.com/potential
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