Know Way?
Elsewhere in this issue, you’ll find coverage of an interesting survey conducted by Financial Service Standards, LLC, (which offers a retirement plan designation called the Professional Plan Consultant) based on responses from nearly 2,000 plan sponsors and financial service professionals. Just as interesting—certainly from the standpoint of advisers considering the pursuit of a designation, not to mention that of an institution that offers those programs—was a side-by-side comparison of several of the major designations now available.
The survey itself probably didn’t tell us much we didn’t already know, or at least suspect. First off, despite confusion about the requirements and differences in designations, the vast majority (95%) of survey respondents said that they thought it was important for those who work with retirement plans to obtain credentials that indicate a certain proficiency in this business, and nearly as many (89%) said they would be more inclined to work with someone who had retirement designations compared with someone who did not. In fact, specific training/knowledge regarding qualified plan management was the top-cited criterion by plan sponsors seeking help with their program in the FSS survey, just ahead of “experience with similar plans.”
Unfortunately for those of you with designations—as I have noted in previous columns—those designations on a provider or adviser business card can be just so much “alphabet soup” (see “Alphabet Soup,” PLANADVISER, Fall 2006). While plan sponsors tend to assume that the designations are meaningful (why else would they be listed on your business card?), the reality is that most just don’t know. Indeed, nearly 91% of plan sponsor respondents to the 2007 Retirement Credential Comparison Survey indicated that they did not know the key differences among the various credentials.
When it comes to what plan sponsors feel is most important from a financial services professional, both advisers and plan sponsors rank experience with similar plans and specific training/knowledge regarding qualified plans well above any other criteria in the Financial Service Standards designation survey. While designations certainly have the potential to provide training/knowledge, it seems that plan sponsors don’t always equate the two. Consider that, among eight different adviser attributes, “professional designations” came in dead last, according to respondents to PLANSPONSOR’s 2006 Defined Contribution Services survey—but “industry knowledge” was ranked third, behind only the quality of advice to the plan and quality of advice to plan participants in that survey of nearly 5,000 plan sponsors.
Indeed, education was a key element cited by advisers in pursuing a designation program—the second-most cited. However, interest in “increasing credibility” was the most cited—calling to mind the question: Can designations increase credibility if they aren’t seen as providing education? Little wonder that adviser respondents, by a near 2-to-1 margin, think that plan sponsors do not understand enough about the various designations.
On this point, anyway, both plan sponsors and advisers appear to be in agreement.
Nevin E. Adams is Dean of the PLANSPONSOR Institute, the education arm of PLANSPONSOR. Nevin also is Editor-in-Chief of PLANSPONSOR magazine, and the creator, writer, and publisher of PLANSPONSOR.com’s NewsDash. A 28-year veteran of the retirement services industry, he graduated magna cum laude with a BS in Finance, and later received his JD from DePaul University in Chicago, Illinois.