Is the Retirement Income Industry Association (RIIA) controlled by financial product manufacturers and distributors? Will RIIA's Retirement Management Analyst designation simply confuse consumers by adding to designation proliferation? Francois Gadenne, founder, chairman, and executive director of RIIA, will respond to these and other questions from financial advice professionals this Friday.
In a post two weeks ago
, I cited RIIA as yet another example of the proliferation of financial advisor designations bedeviling a consumer’s quest for a trusted financial advice. I also said RIIA was created by product manufacturers, including BlackRock, New York Life, Allianz and other powerful companies that have allied themselves to create a designation of their own.
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To his credit, Gadenne called me and told me I had the story wrong.
Gadenne’s candor, intellect, charm, and record of accomplishment are impressive. He co-founded Rational Investors, an independent provider of investment education and advice products for the defined contribution market that in 1999 was sold to Standard & Poor's. He also co-founded Retirement Engineering, Inc. (REI), which designs insurance and investment products for those approaching retirement and he's a co-inventor on REI patents.
Despite Gadenne's credibility, over the past couple of weeks I've struggled with whether to trust RIIA and the RMA program because designation proliferation is a serious threat to financial advice professionals. To consumers, CFPs, CPAs, CFAs, CLUs, ChFCs, CIMAs, and other “real” financial advisor designations are indistinguishable from dozens of new certifications launched in recent years. The new designations are usually for “specialists,” such as working with seniors, analyzing mutual funds, technical analysis, or on the fringes of financial planning.
The curriculum for certification and continuing education of these new designations are sometimes less than rigorous, but consumers would have a difficult time of knowing that. The websites for these groups look credible and investors would have to spend a good bit of time researching the certification requirements of these groups.
When I started writing my post two weeks ago about RIIA, I assumed initially that it was one of the growing number of certification factories. However, as I learn more about the group, I realize that RIIA may actually be a good idea that happens to be backed by serious money. Check out the names of academics at the bottom of the page that are RIIA “special advisors
RIIA was founded in 2006 and its board of directors includes top executives from product manufacturers. While the knee-jerk reaction of many fee-only advisors will be to distrust the RMA movement because of its ties to product manufacturers, that may be unfair.
From the RIIA website “About” page:
“RIIA's mission is to bring the retirement income industry together with a unique ‘View Across Silos’ in creating an unbiased forum for sharing information, strategies, education and research combined with unmatched opportunities to network with industry leaders.
“RIIA members span the entire industry and include banks, insurers, mutual fund companies, brokerage houses, financial advisors and distributors, plan sponsors, researchers, technology companies, marketing firms, academics, and industry media. This unique view provides home offices, investors and advisors with balanced perspectives on key retirement income issues. Plus, it gives the industry a rigorous research-driven, investor-focused foundation for developing retirement solutions that cannot happen within the normal product development silos or various distribution channels.”
I am a cynic. My first instinct was to question RIIA’s motives and value to consumers and financial advice professionals. However, RIIA is behaving like a good an virtuous professional group. It’s invited my skepticism and questions. More and more, I'm starting to believe the RIIA and its RMA program can be an important new voice in the financial advisor profession.
Francois Gadenne, yesterday accepted my invitation to speak this Friday at 4 ET at an Advisors4Advisors Webinar about RIIA and the RMA designation and answer your questions. Please join us by registering here