IFA worried by TNP's new acronyms
The Institute of Financial Advisers has raised concerns about TNP offering new designations for advisers, saying the move could cause confusion for consumers.
Tuesday, February 21st 2012, 6:00AM 
6 Comments
by Niko Kloeten
However, TNP said the new designations would not be in direct competition with other acronyms offered by the likes of the IFA.
The dealer group has brought in three new designations as part of the launch of its own professional association, TNPPA.
According to the media release, TNPPA Certified is "predominantly a business practice designation that recognises business practice standards, educational standards and professional tenure."
Associate Risk Adviser is an "education-based designation [that] has been developed specifically for RFAs who have completed the Certificate in Financial Services in order to recognise their educational achievement and professional tenure."
The Chartered Risk Adviser designation "recognises educational achievement at a diploma level."
IFA chairman Tony Vidler said the institute held a "neutral" view on TNP's decision to enter the professional association market but was concerned about the prospect of new designations.
"It has the potential to be confusing for consumers," he said. "There are already too many acronyms; there's been a proliferation of acronyms and it needs to be tidied up."
Vidler said the IFA, which awards the CFP (Certified Financial Planner) and CLU (Chartered Life Underwriter) designations in New Zealand, had been raising the issue for a long time.
"We've been in that space for over 15 years and to be honest we've talked about it and explained it a heck of a lot over the years. The more you look into it, you can see it's really not helpful to go out and have a raft of acronyms."
But TNP director of development Dave McMillan denied the new designations would confuse consumers, saying they covered an area not well-served by any other acronym currently available.
"The first thing is to look at the risk space and say, what alternative do they have? Not a lot," he said.
McMillan said there was a gap in the market for risk advisers who didn't want to become AFAs but wanted some sort of recognition for their qualifications.
"This is for risk advisers who want to do something more than the minimum and want to be recognised for it."
He said the designations were introduced at the request of TNP's advisers, most of whom are RFAs.
"From what I understand about 95% of IFA members are AFAs; well, we would be almost the reverse."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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So after I get RFA and do NCFS to get to AFA, I could then focus on my Grad Dip Bus Studs (PFP) and work towards AFP. CFP may come later but all along I might be in the IFA. Alternatively I could be in the TNPPA and be TNPP Certified (which isn’t CFP) and start out as an ARA (which isn't AFA) while I'm RFA, then when I have the Diploma I could be Chartered (CRA) (which is not CLU but is really the same thing). After some more time and some case studies and mentoring I could then become Certified (CFP).
But all along I was telling my clients I was certified (TNPPA Certified) just to make sure they weren’t confused.
Since the two organisations will be competing for my $$ I will likely choose one or the other won’t I? But if I am one, and another adviser is the other, how the hell is the poor client supposed to tell the difference?
If new designations are supported by a robust and formal qualification process that includes mentoring, academic achievement, and a minimum (unblemished) performance period by the aspirant then they have credibility. If they also happen to fulfill a need for consumers by identifying a unique skillset that is not otherwise recognised, then new designations would have merit. If new designations are created to provide the illusion of credibility for the benefit of a single stakeholder, then the designation – or it's purpose - must be questioned.
The Institute would contend that the Code encapsulates the intent and requirements of the market authorities in respect to recognizing appropriate professional qualifications, and that position is further supported and justified by the extensive history and professional processes involved in attaining (say) the Certified Financial Planner or Chartered Life Underwriter. It is relevant to also consider that both of those designations carry international significance, with over 140,000 CFP's worldwide and over 110,000 CLU's.
Tony Vidler - Chairman, Institute of Financial Advisers
Speaking of "the game" there might be one little element that all may have forgotten in their pre- 2011 thinking.
"The game" now has a ref. The ref has an intersting acronym after his or her name too. It's called FMA.
If the ref (FMA) thinks for one tiny minute that the use of new acronyms and the creation of new "associations" is likely to cause confusion or misinform the spectator (in this case the consumer; I think you can safely bet that the whistle will be blown; time will be called, penalties and yellow cards will be given out and the rules will be changed unilaterally to prevent it happening again.
It's 2012 folks; there is a lot less room for gratuitous self promotion these days and much more space on the field if we keep it as simple as we possibly can.
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In my long experience it is only plonkers and those with a low self-image that like to string acronyms after their name.
And as for confusing the public - they don't know one from the other and, with a very few exceptions, couldn't care less what letters you have after your name. They are much more interested in how believable/likeable/trustworthy you appear.
Lastly, if you think that letters after a name, even ones that indicate relevant qualification, are any guarantee of getting a good outcome then you haven't seen some of the rubbish I have from those with supposedly high qualifications (and the current requirements for AFA could hardly be called 'relevant qualifications')