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Will You Finish This Article?

The other day, I ran across an interesting study that Lloyds TSB Insurance did several years ago in the U.K. They found that the average attention span has dropped from more than 12 minutes in the 1990s to just over five minutes today.

The pace of our lives has become so frantic that everything from news to public policy has to be reduced to an overly simplistic sound bite just to gain any traction in the crowded public mind space.

It’s actually very unlikely that you’ll finish reading this article. But I’ll soldier on because I believe the ability to concentrate on an issue or set of issues is rapidly becoming a competitive advantage. As an educator, I see this every day. The agents and advisors who commit the time and effort needed to earn an advanced designation or a master’s degree do substantially better across all aspects of their careers. Professional education at a high level takes consistent commitment and hard work – and the attention span to learn – but the payoff can be dramatic.

For years, we’ve talked about the increased average earnings that come from completing advanced designation programs. Last year when it came time to update our study of designation outcomes, we decided to go further. We wanted to look at such factors as leadership, retention and compliance incidents for designees as compared to those without credentials. What we found was astounding.

Before we get to the results, I want to comment on methodology. Most studies about the impact of designation on compensation or other factors are self-reported, meaning advisors submit their own estimates of earnings and other data. While results from that type of survey can be directionally right, the figures are not as accurate as getting actual data from employing companies. We decided to approach firms willing to provide aggregate data across a number of key performance areas for almost 32,000 financial services field representatives on a confidential basis. Their commitment of data analysts to the project was the only way we were able to complete the study in a meaningful way.

First, the results on compensation. Financial advisors with a CLU or ChFC are more productive at every career stage. Overall, advisors with a CLU earn 22 percent more than those with no designation, and advisors with a ChFC earn 51 percent more. By mid-career, those who have either or both of these marks have 40 percent higher aggregate productivity than those with no designation.

There’s also an advantage for new agents who pursue professional education. Those who complete the LUTCF skills training program early in their careers are earning 72 percent more by year four than those without the designation. They also have 90 percent longer average tenure, meaning their survival rate in the business is much higher. The curriculum of this program is focused on product basics, how to prospect, meeting client needs and so forth. What I found especially interesting is that career-long learning is key. If an advisor stops his or her professional education at LUTCF and doesn’t go on to pursue another credential by mid-career, the earnings advantage drops to only 7 percent.

What about leadership? As you might expect, holding a CLU or ChFC is one predictor of advancement into field leadership. The data show that those in field leadership roles are 59 percent more likely than their peer group to have earned one or both of these designations.

One area we had never explored before was the impact of professional education on compliance-related incidents. For all of those compliance officers out there: 81.4 percent of compliance issues come from advisors who do not hold a CLU or ChFC. The more professional education an advisor has, the more ethically consumers are served.

Here’s to all of the financial advisors out there with the attention span – and the dedication – to pursue real professional education. It makes a difference for the advisor, for companies and – most importantly – for the consumers we serve. When I was meeting with representatives from the Consumer Financial Protection Bureau about their good work regarding senior designations, it was encouraging to discover their interest in not just discouraging “weekend” credentials, but also in encouraging the pursuit of meaningful professional education because of the inherent advantage to consumers.

I appreciate those whose extended attention span got them all the way through this article. As always, I’d enjoy hearing your thoughts and comments and invite you to visit The American College website to view our Designation Outcomes Study.

Larry Barton, Ph.D., CAP, is president, chief executive officer and holder of the O. Alfred Granum Chair in Management at The American College, Bryn Mawr, Pa. Contact him at [email protected].

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