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Why Advisors Need Credible Financial Literacy Certifications

Posted by Partners Advantage on Wed, Dec 21, 2016 @ 05:29 PM

Over the course of the past 10 to 15 years many designations have come and gone. Many were merely alphabet soup behind the person’s name and had little to no value or legitimacy. Several financial advisors have tried to recreate themselves with self-appointed designations that would somehow differentiate them from the rest of the industry or their local competition. Unfortunately, that tactic doesn’t work.


Why Self-Appointed Designations are Ineffective

Many designations do not add credibility because they aren’t supported or administered by any legitimate and reputable organizations or institutions. Secondly, the designations aren’t exclusive. Anyone who has a heart beat can obtain the designation. Last and not least, the bogus designations aren’t endorsed by credible organizations or institutions. Advisors need the reputation and knowledge provided by credible financial literacy certifications and designations.

Certified Financial Educator Designation

The CFE Certified Financial Educator® designation is a unique, credible and legitimate designation. First, it is a designation that identifies that an advisor is an educator and an advocate of financial literacy. Many designations are planning or sales designations. The CFEd® is an education and financial literacy designation.

This designation is not issued by a for-profit or sales related organization. It’s solely administered and supported by a 501C3 that was established in 1997 to further the national financial literacy movement initiated in 1994 by the Government Accountability Office. This designation is even endorsed by a consortium of colleges and universities. The financial literacy activities, as well as the 501C3 non-profit, are endorsed by the Department of Labor (DOL).

Reasons to Get Certified

So why do you need it? For several simple reasons:

  1. Exclusivity: An advisor must apply for the designation, pass an industry background check, and a proctored exam
  2. Legitimacy: Supported and administered by a 501C3 non-profit that’s sole mission and purpose is to promote and further financial literacy development in a non-solicitous classroom environment
  3. Endorsements: Colleges and universities as well as the DOL support the designation
  4. Differentiation: Many can say they are educators but have no background in financial education, training or legitimate certification

How to Get Certified

Financial advisors who want to get certified must accomplish the following:

  1. Complete an application
  2. Pay designation fee upon application approval/acceptance
  3. 40 hours of self-study 
  4. Pass a proctored exam

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This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.