In the midst of a tumultuous year, some advisors have shifted their focus toward the long term by improving their credentials. This is evident in the increase in the percentage of advisors holding key designations, such as certified financial planner, financial management advisor and Canadian investment manager.

“Designations usually take you a little higher than the basic minimum requirements and can help an advisor provide more sophisticated product and investment strategies, as well as a more holistic view of a client’s overall financial plan,” says Mark Flynn, vice president of regulatory relations and academic standards for Toronto-based CSI Global Education Inc. “Clearly, that is a value-added benefit.”

Advisors seem to have taken this theory to heart. The percentage of advisors holding the FMA increased to 7.3% from 5.6% last year, with the biggest jump among those in the brokerage industry. Holders of the CIM designation climbed to 9.7% overall from 7.9% last year, with a significant increase among advisors at banks and credit unions. But the biggest increase this year was in the percentage of advisors obtaining their CFP, with an overall increase to 33.6% from 31.4% last year.

Every industry segment except insurance saw significant spikes in the percentage of advisors who hold the CFP designation. Notably, the percentage of advisors who hold a CFP at banks and credit unions increased to 43.5% from 37.5% last year, while the percentage of advisors who hold a CFP at dealers rose to 47.2% from 44.4%.

Those who hold a CFP, which is offered by Toronto-based Financial Planners Standard Council, adhere to internationally recognized professional standards of competence and ethical practice — which are becoming more important to investors after the impact of reeling equities markets as well as widely publicized scandals involving advisors, Flynn says.

“The CFP designation is really a seal of approval, from the public’s point of view,” says John Wickett, senior vice president of standards and certification for the FPSC. “It allows the public to look at you and say, ‘This person has gone through vigorous training and is held to a code of ethics.’ Not many credentials can combine all those elements.”

The increase in the percentage of advisors surveyed who hold a CFP could also be a result of the recent announcement that the process of obtaining the designation will be reformatted as of July 1, 2010. Changes include replacing the single six-hour exam with a two-stage exam process as well as an additional educational component — the capstone course — to demonstrate the writing of a financial plan.

Additionally, candidates will be required to complete three years of qualifying financial planning work experience, which is an increase from the current requirement of two years.

“We review our program every five years or so to ensure that things stay current and applicable to what the public needs,” says Wickett. “These improvements are not changing the standard, and no one should feel concerned about the new program. It is designed to smooth the process toward getting the CFP credential. And while there are a few more steps involved, we are very confident, coming out the other end, that those individuals will be highly educated and skilled as they meet the public. We are not changing the standard; just changing the format to make it more accessible.”

Although many firms do not require advisors to hold a specific designation to join, there are a number of firms that are willing to assist advisors who want to obtain designations.

Mississauga, Ont.-based managing general agency IDC Financial Inc. works in conjunction with Toronto-based Advocis to run its own training program for advi-sors, which includes a focus on the CFP and the chartered life underwriter designation. Last year, IDC went a step further and hired Jeff Cait as director of tax and estate planning; he oversees a number of training programs, including the one that helps advisors complete both the CFP and CLU designations.

“Insurance companies have gotten into manufacturing, as opposed to training and educating their sales forces,” says Cait. “So, there is a real void in the industry when it comes to education and training.”

Cait runs two study groups that meet once a month, which allows advisors to bring their own case studies to the table.

@page_break@“Advisors can learn so much just by talking about specific situations that occur with their clients,” Cait says. “The group is really about leaving your ego at the door and letting everyone get a chance to discuss their client issues and then help each other learn from them.”

For banks and credit unions, designations are becoming a competitive advantage as institutions are starting to require higher standards from their employees. Toronto-based Bank of Nova Scotia is one of the only banks in Canada to require all its branch-based financial advisors to obtain the personal financial planning designation.

“Our advisors care about helping our customers find the right solutions to meet their financial needs,” says Wendy Hannam, Scotiabank’s executive vice president of domestic personal banking and distribution. “And the designations can help them find those solutions.”

Montreal-based National Bank of Canada makes obtaining designations worthwhile, as it offers higher compensation for those who complete their designations. All advisors within the bank must first obtain their mutual fund licence and then go on to obtain their CFP (or the Institut québécois de planification financère’s equivalent financial planning diploma for advisors in Quebec).

In the credit union environment, Vancouver-based Vancouver City Savings Credit Union requires all advisors to obtain the CFP designation. The firm covers all costs involved, as well as renewal fees.

“We are trying to ingrain the financial planning process into the investment process,” says Michael Atkinson, director of investment solutions with Vancity. “We have highly qualified folks who deal with clients regardless of account size, and many of those clients might not get to see the same type of advisor at another financial institution.”

Like Vancity, Guelph, Ont.-based insurer Co-operators Ltd. also covers the costs associated with obtaining a designation for all its dedicated sales advisors. Although the firm does not make having a designation a mandatory requirement, it does encourage advisors who join Co-operators to consider obtaining a designation — in particular, the CLU and CFP — when they are still in their apprenticeship phase, which is the first 36 months with the firm.

After Co-operators’ advisors achieve self-employed status, they then take on the costs associated with earning a professional designation — but they are still eligible to receive a bonus upon obtaining the designation.

“Although we don’t pay for the courses while they’re independent, we do provide our advisors with an education-award bonus,” says Jim Wingrove, Co-operators’ vice president of agency and sales support. “And we do that because, in our opinion, it puts them in a better position to provide more valuable services.” IE