In an industry with competing designations, here’s how advisors perceive their value

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Most advisors earn professional designations to show their qualifications, but how do they choose which ones to pursue?

The financial industry has dozens of designations, which can be confusing for consumers.

Title protection in Ontario has attempted to whittle down designations by approving certain ones for those professionals seeking to call themselves a “financial advisor” or “financial planner.” But that approved list still has 13 designations.

For new certified financial planner (CFP) Aravind Sithamparapillai of Ironwood Wealth Management Group in Fonthill, Ont., deciding on a designation took a lot of pondering.

“I didn’t look at every single designation because there are far too many,” he says.

“We don’t have clear metrics of what each designation does, who’s good at what,” Mr. Sithamparapillai adds. “For that reason, it’s difficult for consumers to know whether they’re getting good quality advice or not.”

Ultimately, Mr. Sithamparapillai investigated the choices made by advisors and financial planners he admired for their technical expertise and social media posts. After speaking with them and exploring the type of work he hoped to do as an advisor, the CFP designation came up multiple times.

After two years of studying and completing the course load, he took the CFP examination this year. He not only passed the test but also achieved the highest mark in his class.

Lynn Wang’s journey racking up multiple designations started directly with her client base.

At first, Ms. Wang, wealth advisor at iA Private Wealth and insurance advisor with iA Private Wealth Insurance in Toronto, thought her chartered financial analyst (CFA) designation – which required minimum explanation to clients due to its international reputation – would suffice, but she quickly realized she needed more expertise in financial planning.

For instance, one client needed advice on a complicated estate situation. While Ms. Wang advised the client to seek out an expert with the trust and estate practitioner (TEP) designation, the client said they preferred to work with her and hoped she had plans to obtain the designation.

So started Ms. Wang’s foray into earning the TEP designation.

Next, she studied for her chartered life underwriter (CLU) designation to advance her knowledge of insurance planning strategies for her business-owner clients. Originally, she hoped to partner with an insurance specialist but had difficulty finding the right fit for her firm.

Ms. Wang’s total designation count stands at six, but she says quality matters more than quantity.

“I made sure I got all the high-quality [designations] that best fulfill my clients’ needs,” she says. “It’s a huge responsibility for me to provide the best possible advice and solutions to my clients. Getting designations is one of the best ways to learn the subjects systematically.”

That idea resonates with Cindy Bowden, a 46-year veteran of the business and president of Cindy Bowden Insurance and Benefits in Markham, Ont. She earned her CLU designation from the outset at the urging of her late father, who was also an insurance advisor.

Ms. Bowden sees no issues with the myriad financial designations and feels it’s just a matter of an individual advisor educating their clients about them.

“If somebody has gone through legitimate courses of curriculum, they are showing the public they have done something to make themselves better educated,” she says.

Ms. Bowden adds that client confusion comes from not understanding there are different designations for different purposes. Some are more specialty designations to serve a particular niche or problem, for example.

“The beautiful thing about our industry is that you can learn whatever you want, and the fact is you have to be learning constantly to survive,” she says.

Ms. Bowden also sees great value in the continuing education the designations require to stay in good standing and in being current with tax and regulatory changes.

While Mr. Sithamparapillai is taking a breather from studying, he intends to earn more designations. First up is a portfolio management designation, either the CFA or chartered investment manager, which he says is a must for proper investment planning.

“There’s a brand cachet being able to say you’re a portfolio manager and you’ve done more due diligence than people who only have their securities licence,” he says.

Mr. Sithamparapillai is also interested in learning more about estate planning designations, as that space is a growing area that will affect all of his clients. He likes that the TEP is a designation that is held by other professionals, such as estate lawyers and accountants.