NASAA Ups The Bar On Financial Advisor CE New
NASAA, the 105-year-old association for state financial regulators, has upped the bar on financial advisor CE/CPE.
CPAs and CFPs earn CPE/CE credit for showing up at a live webinar without taking a test. A 50-minute class earns 1 credit. CPAs need to respond to three polls showing they are paying attention, but their answers are not scored. No scored assessment is required to earn CPA CPE or CFP CE.
In contrast, Investment Adviser Representatives (IARs), humble state-registered individuals are required to pass an exam to earn 1 credit for watching a 50-minute webinar.
To be clear, the lowest barrier to entry to the financial advice profession has always been to register as an IAR. If you managed less than $100 million and wanted to work part time while you earned a designation, you could start managing other people’s money without a CFP, CPA, or any other designation by starting your own RIA and registering as an IAR. You just paid a license fee to your state. No professional credentials were needed.
Technically, the SEC and states prohibit using “IAR” as a credential on a business card, for example, or in marketing materials. However, if your talking to someone and tell them you are a state-registered investment adviser representative, it’s easy to make it sound like you’re a professional.
By making advisors pass an exam to receive IAR CE credit for attending a webinar, the 22 states that have adopted NASAA’s IAR CE model rule have made it much harder for unserious advisors to gain IAR status and this will keep out fraudsters who generally don’t have the attention span to pass 12 IAR CE exams.
NASAA’s IAR CE program is a boon to financial consumers. They can now be more confident their local advisor is legit because they passed an exam to earn 12 professional education credits.
Being a state registered investment adviser has always meant nothing. Now, in states that adopt NASAA’s model IAR CE rule, consumers know IARs are required to take about as much professional education classes as CFPs or CPAs. In fact, CFAs, are not required to take any professional education to maintain their charters, compared to the 12 credits required of IARs.
NASAA's entry into CE regulation is an important new development in the financial advice profession. A4A is creating systems to help its members satisfy IAR CE requirements efficiently.
