Professional designation programs for financial planners continue to expand year by year - as some disappear, others (more?) emerge to take their place. And although many are appropriately critical of some designations in particular, the trend begs the question: is an expanding number of professional designation programs good news, or bad?
Today's blog post is inspired by two interesting articles and announcements that came through my email this week. The first is a video interview with Frances McMorris of On Wall Street magazine, speaking to Lyle LaMothe of Merrill Lynch about whether advisor retirement designations are essential to operate in today's world. The second was an announcement by The American College that it is launching yet another new professional designation program: the Chartered Healthcare Consultant (ChHC).
The aforementioned video makes the case that a retirement planning designation is virtually a necessity in today's world, especially given the overwhelming proportion of financial planning clients who are baby boomers, making a need for guidance in this exact area a widespread issue for advisors. Yet as the video discussed the issue, I found myself wondering - if retirement planning needs are SO widespread, does that mean we need (another?) retirement planning designation... or does it simply mean that a higher level of knowledge about retirement issues is simply part of the core competency to be an advisor in today's marketplace? In other words, where do you draw the line between a specialization of the body of knowledge, versus a need for deeper content as part of the core competency "baseline" education, like the CFP certification?
For instance, contrast some sort of "retirement planning" designation as mentioned in the video, with a program like The American College's new ChHC designation. In the latter case, it certainly appears that their curriculum does (or at least, will when it's fully developed) extend far beyond the typical scope of what an advisor covers in a standard financial planning engagement. In other words, the ChHC would appear to support a bona fide area of specialization, in far greater depth than the extent of health care knowledge a "typical" advisor might know and apply in the course of a "typical" client engagement.
Of course, if health care consulting issues become an increasingly significant part of the core issues a financial planner must advise about, this should show up in a future version of the CFP Board's Job Analysis Survey, culminating in an increase in the focus on health care issues under the official Topic List for the CFP curriculum. In other words, if greater depth of health care issues becomes a common enough need and focus, it crosses its own line from being an area of specialization, to being a part of the list of core competencies in the future.
In the end, this means that what constitutes an area of specialization, versus a core competency to be a planner in the first place, is dynamic and evolves over time (which, of course, is what the Job Analysis --> Topic List methodology of the CFP Board is intended to capture). In an ideal world, new specializations will emerge - likely with professional education/designation programs to support them - and some will remain areas of specialization, while others may ultimately become a core competency that becomes part of the general practitioner body of knowledge (e.g., the CFP certification's Topic List) in the future.
Accordingly, I would make the case that an expanding list of professional designations can actually be a good thing for the profession - it is a part of the process by which a body of knowledge expands, either to support focused areas of specialization, or to develop a "new" specialized area of knowledge which may ultimately be incorporated into the core curriculum for a practitioner in the future.
Of course, that still assumes that the educational program itself is designed and implemented by a reputable educational organization like the American College. Not all "professional" designations meet that particular criterion. But that's a conversation for another time...