July 26, 2011 / 9:34 PM / in 8 years

Wealth Manager: What's a title worth? Millions, maybe

NEW YORK (Reuters) - If you’re a wealth manager and working with clients who have more than $1 million in investable assets — or aspiring to be one — does it matter what title you have on your business card?

There are now 118 "professional designations," or certifications, according to the Financial Industry Regulatory Authority web site (www.finra.org/). But only a few are geared specifically for wealth management. Only one, the Certified Private Wealth Advisor (CPWA), has emerged as a widely-recognized title in the industry for its focus on solving wealthy clients' complex needs beyond merely managing a portfolio.

Two other designations, Certified Financial Planner (CFP) and Certified Financial Analyst (CFA), cover more general ground, but are also widely-respected in wealth management circles. They are considered invaluable cornerstones for financial advisers shifting their focus to clients’ life goals instead and relying less on asset accumulation.

Industry veteran Tim Kochis, director of new business lines for Aspiriant, is considered one of the pioneers of wealth management, and describes the CFP designation as a “threshold” for demonstrating core competency. Wealth managers “are not taken seriously without it,” he said.

Doug Black, a 30-year industry veteran who consults wealthy families on selecting advisers, also sees high value in CFP and CFA designations. Black, who was chief operating officer of UBS’ private wealth management division and now heads SpringReef Partners, said that the Certified Investment Management Analyst (CIMA) designation also scored highly.

“To us CIMA means someone has a high level of competency and understanding of asset management and the financial markets,” he said.

CIMA and CPWA are both issued by the Investment Management Consultants Association, a non-profit organization based in Colorado with a membership of over 8,000 financial advisers.

CIMA, which focuses on investment advice and asset management, began in 1988 and is now held by over 6,200 advisers. The CPWA, which covers tax, estate and retirement planning, was launched in 2008 and is held by about 400 advisers.


Interest is rising among big brokerage firms, banks and independent advisers who want to learn the special needs of the wealthy, who require different needs, like trust services, or worry more about capital preservation and distribution than accumulation.

The number of applicants for CPWA tag has doubled from last year’s 100. The increase comes despite its cost of around $7,500 and a rigorous course of study (six months of online courses; a week of classes at the University Of Chicago, a half-day examination and continuing education requirement).

“We saw increasing interest from advisers who want to connect with a more profitable market of high-net-worth individuals, and also advisers who had begun working with those clients but realized they may have bitten off more than they could chew,” said Sean Walters, IMCA’s chief executive.


The wealth designation alone is no guarantee of success.

“A credential is like a driver’s license,” Black said. “Having a driver’s license and being a good driver are two very different things.”

Still, he said, a certification to handle ultra-high-net worth clients, such as the CPWA, is “a step in a positive direction” for wealth management education.

Keith Clemens, a Merrill Lynch adviser in the Atlanta suburb of Alpharetta, Georgia, said the CPWA designation has enabled him to tap new markets.

“Before I studied for the CPWA, I really didn’t have the working knowledge about areas like stock options for corporate executives,” he said. “Now I do, and I’m able to step in immediately.”

LPL’s John Moninger, who heads the broker-dealer’s high-net-worth unit for targeting clients with $5 million or more, said he found the CPWA beneficial as a resource and a marketing tool.

“I was able to build a lot of great contacts for expertise in subject areas I need to know about and have a better Rolodex as a result,” Moninger said.


No matter what designation a wealth manager chooses to pursue, it’s critical to vet it first.

The designations and certifications aren’t regulated, but they are monitored by state regulatory agencies, the Securities and Exchange Commission and FINRA.

The best place to start is FINRA’s Professional Designations database, which provides key information such as the issuing organization, educational requirements, what type of exams are given, continuing education and experience requirements and the investor complaint or public disciplinary process - if there are any.

FINRA, which regulates broker-dealers but not investment advisers, cautions that it doesn’t approve or endorse any of the designations, and that state securities regulators may prohibit or restrict the use of some designations by both brokers and investment advisors.

FINRA has cracked down on designations that use the term “senior” or “elder.”

What’s more, warns FINRA spokesperson Nancy Condon, brokers “may not use a professional designation in a way that could mislead the investing public, such as by exaggerating the designation’s significance or the extent to which it demonstrates the registered representative’s expertise.”

Charles Paikert covers wealth management and family offices from New York. The opinions expressed are his own.

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