Advisor Intelligence

Strong Certifications Matter to Investors

It’s not enough to be just a licensed financial advisor. In a new study, 62 percent of investors expect advisors to go above and beyond the minimum licensing requirements, saying it's important or critical that their advisor hold a designation or certification.

In a study of 1,200 U.S. investors, the Investment Management Consultants Association (IMCA) found that a majority of investors prefer their advisors have additional credentials, with 65 percent saying they’d like to see the designations issued by objective, non-profit, third party organizations.

The strength of the designation or certification is also important. Eight in ten investors say it’s important advisors meet a rigorous set of standards to qualify for the designation and that advisors need to meet ongoing standards in order to maintain their credentials.  Additionally, about 80 percent say it’s important or critical that advisors' designations could be revoked if they fail to meet ethical standards.

NexGen investors especially place a high premium on designations and certifications, with 84 percent of the 18 to 29-year-olds surveyed saying they value credentials among advisors.

Across all generations, 59 percent of investors believe advisors with expertise in investment management strategies and expertise is the most valuable trait, followed by an understanding of holistic financial planning.

“This is the latest in a long line of consumer research to foretell rising client expectations, particularly among millennials,” said Sean Walters, CEO of IMCA. “But it’s one of the first surveys in our industry to rank the most important criteria for advisor credentials, including which knowledge competencies are most valuable.”

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Diana Britton

Diana Britton is the Managing Editor of WealthManagement.com and REP. Magazine, covering asset management and independent broker/dealers from all angles. A native of Los Angeles, she now lives in...

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Megan Leonhardt regularly pens articles around the wonderful world of the wirehouses, as well as pieces concentrated on regulatory updates, legal cases and compliance issues. A business journalist...
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