It is unclear exactly when the first professional designation was created. Hippocrates is credited with establishing medicine as a profession roughly 2,500 years ago, and medical schools issuing academic degrees and diplomas date back to the medieval Islamic world of more than 1,000 years ago.
In the financial services arena, the first Chartered Life Underwriter (CLU) designations were awarded in 1928, a year after Dr. Solomon Huebner, professor at The Wharton School, founded The American College. The three men and one woman who first completed the program formed an alumni organization today known as the Society of Financial Service Professionals (FSP). Among the early adopters of designations were Fellows of the Society of Actuaries (FSA) in 1900, American Institute of Certified Public Accountants (CPA) in 1917, and American Institute for Chartered Property and Casualty Underwriters (CPCU) in 1943. The first Certified Financial Planner (CFP) certificants were designated in 1973.
What I’ve always found intriguing about Dr. Huebner was his profound belief that “a man” (consider the era!) was obligated to ensure the financial security of his family whether or not he was there to see them through. Financial loss due to injury, illness or premature death was indemnified by life insurance, facilitated by those who sold it on the basis of human life value.
It makes sense, then, that one of Dr. Huebner’s missions was to see the professionalization of the sale of life insurance – the one financial instrument that could see to completion the family’s economic viability. An outgrowth of an agent’s responsibility to make certain his client was “well covered” resulted in the substantial trust and confidence that many clients experienced in their long-term relationship with their agents. This went far beyond the transactional nature of simply acquiring life insurance products. Indeed, the essence of financial planning was born out of these relationships many years before it became an industry and a curriculum.
In addition to the CLU designation signifying competence and professionalism in the sale of life insurance, it also conveyed to the prospective client that the agent was serious enough about her business to take 10 courses and pass 10 exams. It also showed that when the agent joined the Society, she was affirming her intention to treat the client in the same way that she would want to be treated in the same circumstances. The Society’s code of professional conduct requires that members “place the client’s interest above their own.”
As The American College added the Chartered Financial Consultant (ChFC) program and master’s degrees in management and financial services, it became more common to see several sets of initials on the business cards of those practitioners who began to specialize and further professionalize their practices.
Eligibility for Society membership now includes 20 rigorous designations and degrees in client-facing areas of professional focus. Chief among these credentials are CLU, ChFC, CFP, MSFS (Master of Science in Financial Services), J.D. (Juris Doctor), CPA, CASL (Chartered Advisor for Senior Living) and CEBS (Certified Employee Benefit Specialist). Also prominent are AEP (Accredited Estate Planner), CFA (Chartered Financial Analyst) and CIMA (Certified Investment Management Analyst) designations, along with MBA (Master of Business Administration) and Ph.D. degrees specialized in serving clients’ financial assessment and consulting needs. But wait, there’s more!
Somewhere between “several” designations and “too many to count,” there have emerged an astonishing number of designations, degrees and, in some cases, membership initials (such as MDRT, for Million Dollar Round Table) that have blossomed as the financial services industry expanded. (For a partial list derived from a recent Firm Element course: www.bitly.com/inn-designations).
OK – here’s a quiz. Take out your bluebooks and No. 2 pencils and define the following financial designation acronyms (answers at the bottom of this article):
An even larger and more intimidating list of designations and certifications probably exists for the medical community. The public no longer has any idea which designations/certifications are good, bad or just plain quackery!
I would like to propose yet another designation that I believe will blow all the others away. You saw it on the quiz above. I refer to it as (wait for it) …
This should not be confused with either the HIJK or the EFG designation nor that of ABCD.
And now that you know your ABCs, next time won’t you sing with me?