Financial Advisor Designation Proliferation Is A Disaster For Consumers And Retirement Management Analyst Designation, A New Designation Sponsored By Product Manufacturers, Illustrates The Threat To Professionals

Monday, February 13, 2012 12:29
Financial Advisor Designation Proliferation Is A Disaster For Consumers And Retirement Management Analyst Designation, A New Designation Sponsored By Product Manufacturers, Illustrates The Threat To Professionals

Tags: financial planning | marketing | prospects | retirement income | retirement planning | Wealth Management

“Retirement Management Analyst (RMA) Designation Expands Into Level 1 Curriculum and Level 2 Curriculum,” says the headline of a press release issued this morning by the Retirement Income Industry Association (RIIA).  

While the news could be good, it is nonetheless yet another example of the proliferation of financial advisor designations bedeviling a consumer’s quest for a trusted financial advice.

This Website Is For Financial Professionals Only

RIIA appears to be a good organization. So this story is not meant as a knock against RIIA.
Trouble is, consumers can’t tell whether the young accreditation body is for real. Nor do consumers know if the RMA designation is worth the paper it’s printed on.
The proliferation of advisor designations poses a major competitive threat to CPAs, CFAs, CFPs, CIMAs, CLUs, ChFCs, and other established professional designations.
Put yourself in a consumer’s shoes. Your financial advisor has a long list of designations after his name. Is an RMA better than a CFA or CFP? The consumer does not know. Even if a consumer checks, the answer is difficult to discern.
“Launched in 2009 through requests from RIIA members and in response to demand from financial advisors and consumers, the RMA designation is the only scientifically-based, rigorous retirement planning education and certification serving the financial services industry including defined contribution and retail distribution organizations, financial advisors, broker dealers, banks and insurance companies,” says the press release issued this morning.  “Individuals earning the RMA designation are uniquely prepared to deliver retirement income solutions and services to clients who want a secure income stream and ongoing professional management throughout their retirement years. To help RMA candidates prepare for the exam, RIIA partnered with software providers and leading universities.”
If a consumer goes to the RIIA website to find our about the RMA designation, the group is impressive. Its board of directors includes representatives from the largest and smartest companies in the financial advice business, Bank of America’s Head of Personal Retirement Solutions, David Tyrie, the former head of the mutual fund industry trade association, Matthew Fink, the top financial whiz from Ibbotson Associates, Peng Chen, and other powerful people.
RIIA’s home page features its effort to educate financial advisors so that Americans can find safer retirement solutions.
And it doesn’t hurt that "RIIA" sounds a lot like RIA. Consumers are bound the think RIIA is related to being an RIA. Nonetheless, the group looks like it’s doing good work.
But what’s really happening here?
Truth is, RIIA is a group created by product manufacturers. BlackRock, New York Life, Allianz and other powerful companies have allied themselves to create a designation of their own.
Now there is nothing wrong with that. These companies are a key part of the solutions professionals must provide to consumers.
But why did product companies have to go and create their own designation? Why didn’t these powerful companies just go to the existing professional organizations and support their effort to educate their professionals?
My guess is the CFP Board and even the well-heeled CFA Institute would have welcomed the assistance of the product companies in designing better educational programs for financial professionals. Does adding yet another accreditation help consumers?
While RIIA may actually do great work -- it is backed by big bucks to pay for research studies and has attracted numerous academics to its board of “special advisors” -- creating yet another designation for retirement advisors only will confuse consumers.
What do you think of the RMA designation? It looks like RIIA can add value because the product companies are where the money is.
Do you have room for one more designation on your business card?
What can established professional licensing bodies do to fight designation proliferation?


Comments (7)

I suspect that when these product companies talk about a "secure income stream" this is code for annuities. Caveat emptor.
jalfonso , February 13, 2012
At least once per month, I receive a survey invitation for responses to industry questions. Most questions relate to products provided by Blackrock, NYL, Allianz, and various mutual fund companies. As an independent and certified financial planner (registered mark), my response is almost exclusively, "I do not use that product or that company's products." I would guess those companies really feel the heat from persons like unto myself and would gain more by raising up their own core advisors that promote the products.
ajhfpainc , February 13, 2012
The core curriculum is decent, and it's not just annuities, though those are included. But if you start digging into some of their affiliated programs (software) you find how simple, product oriented, and wholly inadequate they are. And that leads one to discount the validity of the whole shebang. What reading through their body of research and curriculum has helped me do is to do a better job of not just saying "here is the best way to do things", but to realize that my preferred option may not always be what the client will live with. Sometimes my choice B is someone else's choice A. How else can I meet my client's needs? While I'm not a big fan of annuities, I realized that being 100% opposed to them may be as big a mistake as selling nothing but. All said, I am glad I studied their curriculum, but I chose NOT to add their designation to the list of letters at the end of my name.
vguettlein , February 13, 2012
Duncan Williams
Andrew, I must agree with you about the proliferation of designations, but I think you were mistaken to lump RMA in with the rest of the alphabet soup.

I am a doctoral candidate in financial planning at Texas Tech, and prior to this I was a fee-only advisor in Atlanta for a decade. It is in my interest to promote the CFP mark, and I think the public would be better off if there were only a handful of designations to serve as a signal of quality. Even some of the ones that you mentioned, while they have plenty of meat on the bones, are merely watered down versions of more rigorous designations (CIMA for CFA and ChFC for CFP).

I stumbled across RIIA purely by accident. My research is in the area of distribution planning optimization and I found the Retirement Management Journal (published by RIIA) in a search for potential outlets for publishing. I can tell you that unlike CIMA and ChFC, the RMA body of knowledge represents the leading edge of knowledge within its niche, which is distribution planning. And to Mr. Guettlein’s point about the inadequacy of the related software, I concur that a tool that handles the complexity of retirement strategy design is yet to be developed. However, this lack of technology development should not be confused with the elegance of the approach to retirement income planning provided by the RMA body of knowledge. It is simply an issue of programming.

As far as the product companies supporting RIIA, I too am always skeptical of motivations. But from my observation, the RIIA organization seems to be driven more by the pursuit of retirement optimization than by corporate interests. They invite people with opposing views to speak at their events, and when appropriate incorporate corresponding improvements to their curriculum. Of course, insurance companies are smart to embrace movements that serve their interests, and there is no doubt that the RMA body of knowledge can serve to provide a more sophisticated, solution-based approach to distributing their products.

Given my fee-only background, it was not the intent of my research to find that in this defined contribution world, many retirees would be better off with a higher percentage of their consumption being supported by guaranteed income. But as a researcher, I have to be agnostic and that is where the results have led me. Aided by the Treasury's announcement to allow Qualified Deferred Annuity Contracts in retirement plans, I think this is the start if a trend that the retirement planning world will be following for some time. The fee-only and fee-based worlds would be wise to get on board or risk being left behind.

Thanks for letting me share my two cents. I always enjoy your articles. Sincerely, Duncan Williams, CFP®
Duncan Williams , February 21, 2012
Whoa, watered downed? Kinda hard for someone enrolled in PhD course with no Masters degree requirement to cast stones .

I have now seen it all.....
brentb843 , February 21, 2012
Duncan Williams
Brent, it certainly was not my intent to cast stones. The article references a designation with which I am familiar, and I merely meant to contribute to the conversation.

And for your edification, neither Harvard's Econ PhD program nor Chicago's Finance PhD program require a previous masters degree. And while Texas Tech is certainly not in that league, it is widely considered the top Financial Planning program. Students who enter our PhD program without prior financial planning education do have to complete masters level courses in the field prior to proceding on to PhD level coursework.
Duncan Williams , February 28, 2012
RIIA will answer questions from advisors this Friday at 4 ET. Register at
agluck , February 28, 2012

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.