Consumers Value Advisers' Certifications, Training, Experience

When choosing an adviser, consumers report placing high value on knowledge, including the type of advice an adviser provides, their education, and years of training.

Consumers look at certifications, training and experience as they seek an adviser who will understand and offer guidance on all their financial needs. In a survey of consumers with more than $100,000 in investable assets, nearly 90% see a potential adviser’s certifications as important, 86% would prefer working with an adviser who has passed a certification exam and has completed a course of education, and 82% say it is important for a potential adviser to discuss training and certifications.

The Certified Financial Planner (CFP) Board of Standards survey revealed that nearly three-fourths (72%) say they expect a financial adviser to receive one to four years of training in financial planning, while another two-thirds (65%) say they would abandon or not engage an adviser whose knowledge and training is limited largely to his or her company’s products or services.

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“This survey tells us that firms need to rethink their training models to incorporate financial planning competency from the beginning of a new adviser’s training program – not three to four years into their career,” says Joseph Maugeri, CFP board’s managing director of marketing and corporate relations. “The days of ‘learning on the job’ seem to not apply anymore when it comes to what competencies consumers now expect of their financial advisers.”

Consumers value advisers with diversified knowledge, as more than 80% prefer to work with an adviser who is qualified to review all areas of their financial life rather than someone who specializes in one or two subject areas. Additionally, 48% say that knowledge of multiple financial areas is most important to them when choosing a financial professional, compared with an adviser’s investment track record (31%) or personal referrals (18%).

The Investor Preferences in Selecting a Financial Advisor survey was conducted November 20-23 involving a sample of 850 investors 18 years of age or older.

New York Life Investment Management to Acquire IndexIQ

New York Life Investment Management announced the signing of a definitive agreement to acquire IndexIQ, a firm specializing in liquid alternative exchange-traded funds.

New York Life’s MainStay Investments business will leverage the acquisition of IndexIQ to enter the exchange-traded fund (ETF) market “with dominant position in alternative ETFs,” the firm says, calling the acquisition its first entry into the ETF industry.

The combination of the two companies brings New York Life’s global asset management franchise and distribution platform together with IndexIQ’s ability to launch alternative ETF products. Upon closing of the transaction, IndexIQ’s services will be delivered through New York Life’s MainStay Investments platform, opening new capabilities to investors seeking exposure to alternative investments through ETFs. It will add $1.5 billion to MainStay’s $101 billion in assets under management, according to the firms.

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“Our entry into the ETF space is a significant leap forward for New York Life Investment Management and offers remarkable opportunities all around,” says Drew Lawton, chief executive officer of New York Life Investment Management. “Retail and institutional investors are increasingly attracted to ETFs because they offer a cost-effective, transparent way to access investment opportunities across asset classes around the globe.”

Lawton says IndexIQ has established itself as an innovator in liquid alternative ETFs, adding that New York Life intends to leverage IndexIQ’s capabilities to become a leading provider of non-traditional ETF solutions to the investment markets.

Among its 12 fund offerings, IndexIQ offers the IQ Hedge Multi-Strategy Tracker ETF, which aims to replicate the risk-adjusted return characteristics of hedge funds using strategies that include long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, emerging markets and other strategies commonly used by hedge fund managers. IndexIQ also offers ETF models and separately managed account services.

The transaction is expected to close in the first half of 2015. Terms of the transaction were not disclosed. More information is available at www.mainstayinvestments.com and www.indexiq.com.

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