Ally, Ally, InFRE
If you've attended a retirement income conference anywhere in the continental United States recently, you've probably met Kevin S. Seibert, CFP, CEBS, CRC, managing director of the International Foundation for Retirement Education, or InFRE.
A tall, sandy-haired Midwesterner, the Barrington, Ill.-based Seibert logs many thousands of air miles each year, delivering slide presentations at retirement conferences and teaching workshops on retirement income to groups of financial advisors, often at banks and insurance companies.
You may even have heard Seibert describe his epiphany when he broke with the orthodoxy of conventional financial planning and realized that life annuities, by virtue of their mortality credits, can be an important source of retirement income.
If you've seen Seibert lately, you may also have heard him announce that the Certified Retirement Counselor designation, which InFRE confers, is now accredited by the National Commission for Certifying Agencies, after two years of work by Seibert and his colleague, Betty Meredith, CFA, CFP, CRC.
So-called "senior designations," as you probably know, have become objects of controversy. Two years ago, a number of self-described “senior specialists” used flimsy credentials and free lunches to hustle retired investors. Several states began prosecuting them.
Regulations soon followed. The State of Massachusetts eventually banned the use of senior certificates except for those accredited by either the NCCA or the American National Standards Institute, two organizations that certify certifiers.
Financial advisors clearly benefit from having the right acronyms after their names. In the retirement income sphere, several certifying bodies are vying for advisors' attention. To help advisors understand their options, RIJ has initiated an occasional series on organizations that offer certificates in the retirement space.
A few weeks ago, we reported on the Retirement Management Analyst designation, which is currently in development by the Boston-based Retirement Income Industry Association. This week we report on InFre's Certified Retirement Counselor designation.
Non-partisan manual
Depending on how much you've already read about or know about retirement income, the topics that InFRE's manuals cover and the skills that are assessed during the four-hour, 200-question CRC exams may either be familiar or entirely new.
InFRE's 276-page, spiral-bound study guide, “Strategies for Managing Retirement Income,” written by Meredith and Seibert in partnership with NAVA (now the Insured Retirement Institute), presents a six-step process that covers all the basics—client assessment, management of retirement risks, income generation, etc.—in thorough and even-handed detail. It doesn't push any particular philosophy, other than perhaps the assumption that retirement income planning is quite different from financial planning in mid-life.
“We took a lot of the information that's already out there, we researched it thoroughly, and we used it to develop Strategies for Managing Retirement Income,” Seibert told RIJ. “That's our main course of study, but it's separate from CRC. It goes into more depth than the study guides for the CRC examination.”
The distinction between the educational materials that InFRE promotes and the CRC study guides or “Test Specifications” is an important one. To be NCCA-accredited, a certifying body must show that it isn't merely using a designation as an excuse to sell textbooks or other paraphernalia. Nor does the NCCA accredit an organization that simply awards a framable “diploma” to people who have completed a specific course of study.
“A certification program isn't based on the education, it's based on knowledge,” said Jim Kendzel, executive director of the Institute for Credentialing Excellence, or ICE, of which the NCCA is the accrediting arm. “It's always linked to an assessment tool, and it always involves a continuing education requirement.”
(The credentialing process presents a kind of infinite regression. InFRE is accredited by NCCA, which is part of ICE. ICE, in turn, is accredited by the American National Standards Institute, whose board consists of officers of major U.S. corporations, academics, and federal officials. ANSI represents the U.S. at the ISO, or International Organization for Standardization, which governs the ISO 9000 quality standards.)
InFRE met those requirements in September, after a two-year application process—and twelve years after the CRC was created. InFRE first developed the designation in 1997 in partnership with the Center for Financial Responsibility at Texas Tech University in Lubbock and with help from a federal grant. It has been certifying and re-certifying financial professionals since then.
“About 2,000 people are accredited or in the process of being accredited, and we're hoping to go to 3,000 by end of 2010,” Seibert told RIJ. “About 60% to 70% are in financial services. Our growth slowed down last year, as anticipated, because state compliance departments were saying, ‘We're not going to let you use your retirement designation until it's accredited.’”
One of the first to receive the CRC from InFRE was Linda Laborde Deane, CFP, AIF (Accredited Investment Fiduciary) of Deane Retirement Strategies in New Orleans. Her son Keith, a 2008 University of Georgia graduate, is among the most recent to start the CRC process.
“The more credentialing you have, the more clients respect you and the more confidence they have in you,” she told RIJ. “It's important that CRC has continuing education requirements because clients are aware of that—that is, if you make them aware of it.”
Deane sees no need for annuities for her retired clients, preferring to rely on prudent, adjustable systematic withdrawals for income. She advises her clients each year on how much they can afford to harvest from their accounts. Though not a market timer, she watches the markets closely. In July 2006 she eased back to a 50/50 balance of stocks and bonds, then stood pat. “My clients went through 2008 without any decrease in their income,” she said.
Annuity revelation
Seibert joined InFRE in 2003. A graduate of Miami University of Ohio with an MBA from the University of Wisconsin, he founded and operated Balance Financial Services, a Chicago financial planning and consulting in 1988. Earlier, he'd been a consultant at William M. Mercer Inc., specializing in employee benefits.
His financial life includes a conversion of sorts. “When you grow up in the fee-only CFP world, you're taught to think that annuities are bad." He had not considered the mortality pooling effect, however, which enhances the wealth of the surviving annuity owners.
“That was something of a revelation,” he said. “And you're not just getting more income than you would otherwise. You're preserving your managed assets as well by making sure that your basic needs will always be met. One of the cons of annuities is that they take away from your estate. But the opposite is true. If you live a long time, they can preserve your estate.”
You might notice that Seibert and Deane don't hold identical views on the value of income annuities. But then, there's nothing in the CRC designation that says they have to.
© 2009 RIJ Publishing. All rights reserved.
Industry Views,
Annuity Firms Turn Their Focus To Online Client Security
Annuity issuers are finally beginning to beef up the security of their client sites. Firms have bolstered login requirements, strengthened security measures and educated users about online crimes. A number of annuity client websites now offer detailed tutorials on phishing and other online scams. Several firms have ramped up their login security features.
Pacific Life, for one, has overhauled its entire client login process. The firm implemented computer recognition, which allows only users logging in from verified IP addresses to access account information.
Users can verify their computer by successfully answering a predetermined security question. Clients are also asked to select an image and create a custom caption that will appear on the password screen in order to confirm the page's authenticity.
 |
| Private Enhanced Security Login |
Allianz and TIAA-CREF also enhanced their respective client login processes. Allianz tightened its password criteria, forcing clients to choose more secure passwords. Clients are required to change their password every 90 days; Allianz is the only firm we track that requires regular password updates. In January, TIAA-CREF introduced a new login system that incorporates security questions into the regular username/password login process.
More firms are also employing automatic logouts. This simple but effective feature automatically ends a user's session after they have been idle for a set period of time (most of our firms will now automatically log a client off after 15-30 minutes of inactivity).
Such improvements are more the exception than the rule, however. Pacific Life and Vanguard are the only firms that have incorporated computer recognition as well as customizable security imagery and captions into the login process. Most of the firms we track continue to use barebones login requirements. Too many firms have neglected to make online security a priority.
Although annuity firms have improved client security, they lag behind brokerages and banks. When Corporate Insight launched annuity coverage in 2006, for example, all of the firms in our roster simply required clients to enter a username and password to gain access to online account information. At that time, many banking, credit card and brokerage firms had already added stringent two-factor authentication methods to their login processes.
The speed at which annuity transactions are processed may help explain why annuity firms have short-changed security. Unlike transactions on brokerage websites, where trades are completed instantaneously, annuity transactions take at least one business day to clear. There's significantly more time to detect fraud.
Because most investors purchase annuities through advisors, there's usually a second set of eyes monitoring the contracts for suspicious activity. The heavily regulated nature of the product provides additional layers of protection. But these are not reasons for complacency or lax security. The sensitive personal information found on annuity websites will always make them potential targets for identity thieves. More than ever, firms must stress safety and prevention.
© 2009 Corporate Insight, Inc. All rights reserved.
Industry Views are special reports that are sponsored and independent from RIJ's editorial content.
Ally, Ally, InFRE
If you've attended a retirement income conference anywhere in the continental United States recently, you've probably met Kevin S. Seibert, CFP, CEBS, CRC, managing director of the International Foundation for Retirement Education, or InFRE.
A tall, sandy-haired Midwesterner, the Barrington, Ill.-based Seibert logs many thousands of air miles each year, delivering slide presentations at retirement conferences and teaching workshops on retirement income to groups of financial advisors, often at banks and insurance companies.
You may even have heard Seibert describe his epiphany when he broke with the orthodoxy of conventional financial planning and realized that life annuities, by virtue of their mortality credits, can be an important source of retirement income.
If you've seen Seibert lately, you may also have heard him announce that the Certified Retirement Counselor designation, which InFRE confers, is now accredited by the National Commission for Certifying Agencies, after two years of work by Seibert and his colleague, Betty Meredith, CFA, CFP, CRC.
So-called "senior designations," as you probably know, have become objects of controversy. Two years ago, a number of self-described “senior specialists” used flimsy credentials and free lunches to hustle retired investors. Several states began prosecuting them.
Regulations soon followed. The State of Massachusetts eventually banned the use of senior certificates except for those accredited by either the NCCA or the American National Standards Institute, two organizations that certify certifiers.
Financial advisors clearly benefit from having the right acronyms after their names. In the retirement income sphere, several certifying bodies are vying for advisors' attention. To help advisors understand their options, RIJ has initiated an occasional series on organizations that offer certificates in the retirement space.
A few weeks ago, we reported on the Retirement Management Analyst designation, which is currently in development by the Boston-based Retirement Income Industry Association. This week we report on InFre's Certified Retirement Counselor designation.
Non-partisan manual
Depending on how much you've already read about or know about retirement income, the topics that InFRE's manuals cover and the skills that are assessed during the four-hour, 200-question CRC exams may either be familiar or entirely new.
InFRE's 276-page, spiral-bound study guide, “Strategies for Managing Retirement Income,” written by Meredith and Seibert in partnership with NAVA (now the Insured Retirement Institute), presents a six-step process that covers all the basics—client assessment, management of retirement risks, income generation, etc.—in thorough and even-handed detail. It doesn't push any particular philosophy, other than perhaps the assumption that retirement income planning is quite different from financial planning in mid-life.
“We took a lot of the information that's already out there, we researched it thoroughly, and we used it to develop Strategies for Managing Retirement Income,” Seibert told RIJ. “That's our main course of study, but it's separate from CRC. It goes into more depth than the study guides for the CRC examination.”
The distinction between the educational materials that InFRE promotes and the CRC study guides or “Test Specifications” is an important one. To be NCCA-accredited, a certifying body must show that it isn't merely using a designation as an excuse to sell textbooks or other paraphernalia. Nor does the NCCA accredit an organization that simply awards a framable “diploma” to people who have completed a specific course of study.
“A certification program isn't based on the education, it's based on knowledge,” said Jim Kendzel, executive director of the Institute for Credentialing Excellence, or ICE, of which the NCCA is the accrediting arm. “It's always linked to an assessment tool, and it always involves a continuing education requirement.”
(The credentialing process presents a kind of infinite regression. InFRE is accredited by NCCA, which is part of ICE. ICE, in turn, is accredited by the American National Standards Institute, whose board consists of officers of major U.S. corporations, academics, and federal officials. ANSI represents the U.S. at the ISO, or International Organization for Standardization, which governs the ISO 9000 quality standards.)
InFRE met those requirements in September, after a two-year application process—and twelve years after the CRC was created. InFRE first developed the designation in 1997 in partnership with the Center for Financial Responsibility at Texas Tech University in Lubbock and with help from a federal grant. It has been certifying and re-certifying financial professionals since then.
“About 2,000 people are accredited or in the process of being accredited, and we're hoping to go to 3,000 by end of 2010,” Seibert told RIJ. “About 60% to 70% are in financial services. Our growth slowed down last year, as anticipated, because state compliance departments were saying, ‘We're not going to let you use your retirement designation until it's accredited.’”
One of the first to receive the CRC from InFRE was Linda Laborde Deane, CFP, AIF (Accredited Investment Fiduciary) of Deane Retirement Strategies in New Orleans. Her son Keith, a 2008 University of Georgia graduate, is among the most recent to start the CRC process.
“The more credentialing you have, the more clients respect you and the more confidence they have in you,” she told RIJ. “It's important that CRC has continuing education requirements because clients are aware of that—that is, if you make them aware of it.”
Deane sees no need for annuities for her retired clients, preferring to rely on prudent, adjustable systematic withdrawals for income. She advises her clients each year on how much they can afford to harvest from their accounts. Though not a market timer, she watches the markets closely. In July 2006 she eased back to a 50/50 balance of stocks and bonds, then stood pat. “My clients went through 2008 without any decrease in their income,” she said.
Annuity revelation
Seibert joined InFRE in 2003. A graduate of Miami University of Ohio with an MBA from the University of Wisconsin, he founded and operated Balance Financial Services, a Chicago financial planning and consulting in 1988. Earlier, he'd been a consultant at William M. Mercer Inc., specializing in employee benefits.
His financial life includes a conversion of sorts. “When you grow up in the fee-only CFP world, you're taught to think that annuities are bad." He had not considered the mortality pooling effect, however, which enhances the wealth of the surviving annuity owners.
“That was something of a revelation,” he said. “And you're not just getting more income than you would otherwise. You're preserving your managed assets as well by making sure that your basic needs will always be met. One of the cons of annuities is that they take away from your estate. But the opposite is true. If you live a long time, they can preserve your estate.”
You might notice that Seibert and Deane don't hold identical views on the value of income annuities. But then, there's nothing in the CRC designation that says they have to.
© 2009 RIJ Publishing. All rights reserved.