Adding a designation can help advisers develop additional expertise and show the world that knowledge, and client circumstances often dictate new certifications.
“I obtained the [certified divorce financial analyst] designation primarily because three client couples filed for divorce the same year,” says Diane Pearson, a CFP, wealth adviser and shareholder with Legend Financial Advisors in Pittsburgh.
“I realized that I did not understand my responsibilities to my clients,” she says.
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“Getting the CDFA designation has helped significantly. I have partnered with a divorce attorney and a divorce expert to present education seminars to people who are thinking about, in the middle of or coming out of a divorce,” Pearson says.
Leslie Thompson, managing principal at Spectrum Management in Indianapolis, also holds a CDFA.
“Although the designation is becoming more well-known, on its own it’s more of a curiosity,” she says. “To build a practice around divorce consulting, it is important to articulate to attorneys and prospective clients what is gained by having a financial professional who specializes in divorce involved in the process.”
Thompson, who is also a CPA and a certified financial analyst, says that the knowledge gained as a CDFA helps her have better discussions with clients facing divorce.
“Besides running scenarios to evaluate options for dividing assets tax efficiently, I also evaluate cash flows,” Thompson says.
“Often, clients are concerned that their spouse is hiding assets,” she says. “Others have no idea what they spend and how to go about finding this out.”
CPAs and CFPs also address such issues, but Thompson has found that “the narrative is different in the context of divorce.”
Divorce isn’t the only niche area for advisers eyeing a designation.
“Our firm had some clients who were acting as investment manager for their qualified retirement plans,” says Pearson, who has obtained the professional plan consultant designation. “We were not looking at consulting on 401(k) plans as a niche then, but in the past few years we have been focusing on developing our 401(k) retirement plan business as an investment manager.”
ENCOURAGING EMPLOYEES
Some advisory practice principals value designations so highly, they encourage advisers at their firms to get them.
“I require our planners to pursue either a CFP or a [chartered financial consultant],” says Mike Piershale, president of Piershale Financial, a wealth management firm in Crystal Lake, Ill., who has added an [registered financial consultant] designation to his ChFC.
“I also encourage them to get additional professional designations,” he says. “One of my planners just obtained an [accredited estate planner], and our firm picked up the cost.”
According to Gregory Kasten, a CFP and the founder and chief executive of Unified Trust in Lexington, Ky., his firm has seven accredited investment fiduciary analysts and more than 10 accredited investment fiduciaries.
“Designations show professionalism and dedication to lifetime learning,” says Kasten, who has an AIFA as well as an M.D. “Designations combined with culture allow our firm to place clients first, allow clients to feel safe and improve their outcomes.”
This story is part of a 30-30 series on ways to upgrade a practice.
