“If you have a heart problem, you don’t want to see a generalist, but a cardiologist,” says Dana Anspach, CFP, the founder of Sensible Money, a Scottsdale, Arizona advisory firm that specializes in dealing with the financial risks of retirement. “Retirement income planning takes a special skill set that goes beyond general planning.”
That skill set is something that relatively few advisors today can boast of having. Most have not looked beyond traditional accumulation-stage investment strategies to grapple with the questions that clients face when they no longer earn a substantial income.
Those questions include: When should I take Social Security? What’s the best way to draw down my 401(k)? How much guaranteed income do I need? How do I deal with longevity risk, tax risk, inflation risk, and health risk?
But times, as you know, are changing. Several certification programs—some new, some well-established—can show you how to become an expert in retirement income planning.
Just as important, these programs provide their graduates with a designation that can they hang on the wall, that will assure clients that the advisor knows what he or she is talking about, and that can differentiate him or her from other advisors.
To be sure, there’s been some abuse of bogus “Senior Designations” in the past. We looked closely at the following certification programs and feel confident in recommending any of them.
Retirement Management Analyst
The Retirement Income Industry Association created its Retirement Management Analyst (RMA) designation partly in response to the Great Recession, when retirees were poorly protected, says Steve Mitchell, RIIA’s chief operating officer and director of advisor education.
“There was a real gap in how to monetize a portfolio in a sustainable way,” Mitchell told RIJAdvisor, referring to the process of converting savings to income. “Our approach provides the protection [a retiree needs] by building an income floor with solutions that are not subject to market volatility.”
The RMA seeks flooring solutions from “across the silos.” (“Across the silos” is the slogan of RIIA, whose founding principle was that the retirement income challenge requires solutions from multiple disciplines.) Those flooring solutions range from hedging strategies to annuities to laddered TIPs.
The program recommends investing for upside potential with the assets that haven’t been used to establish the floor. The eight-module, rigorously academic course draws on principles of “life-cycle investing” by considering the interplay of clients’ human, social and financial capital and then matches income against the entire household’s needs, rather than an individual’s.
The coursework is based on two proprietary texts, The RIIA RMA Book of Knowledge, which was written by RIIA co-founder and chairman Francois Gadenne and Michael Zwecher, and the latter’s Retirement Portfolios: Theory, Construction and Management (Wiley Finance, 2010).
The RMA is offered as a five-week distance-learning program through Boston University’s Center for Professional Education. The fee is $1,295. The RIIA also offers a five-day, one-week intensive including the final four-hour exam at Texas Tech. The RMA involves other fees, including the annual $500 RIIA membership, which offers access to its magazine, conferences and webinars).
Retirement Income Certified Professional
The American College’s Retirement Income Certified Professional (RICP) is a new program from the venerated institution that was founded in 1927 by Wharton School professor Solomon S. Huebner. (The RICP program is so new that two of its three segments are still under construction.) The first segment of the three-part training just launched in April, the second and third will launch in September and January, respectively.
The RICP doesn’t rely on a specific textbook or advocate a particular strategy. Rather, each segment offers a series of about eight online lectures (with notes and exercises) by American College professors. The lectures are interspersed with some 20 video presentations by industry experts like Michael Kitces, Moshe Milevsky and Ken Dykewald. Most of the videos are taken from the college’s New York Life Center for Retirement Income where many of them are available for free viewing. “We introduce people to all the major approaches and allow them to make their own decisions,” said co-director of the New York Life Center Dave Littell.
Each course requires about 50 hours of study and is followed by a 100-question, multiple-choice exam. All three classes are available online at an introductory price of $1,349 (which will increase to $1,860 after the first year).
The American College also offers the Chartered Advisor for Senior Living (CASL) designation. With five self-study segments, it’s broader than the RICP and covers issues from the fields of psychological and gerontology. “The CASL is not a laser focus on retirement planning,” said Keith Henderson, the college’s Senior Strategy Consultant. “There’s a lot on estate planning and long-term care.” In fact, the CASL, which costs $620 per course and requires a $140 admission fee, can complement the RICP.
Certified Retirement Counselor (CRC)
The Certified Retirement Counselor designation is offered by the nonprofit International Foundation for Retirement Education (InFRE), which has been affiliated with Texas Tech University.
The course teaches advisors how to define a client’s retirement income needs, identify sources of retirement income, determine how to fill any gaps and protect income streams from threats like taxes, inflation and volatility.
“We’re good at taking the academic material and making it easily relatable to advisors so they can easily explain it to their clients,” said InFRE managing director Kevin Seibert. The CRC has certified some 2,000 advisors, about a third of whom work in banks and about a quarter work in 403(b) plans and 457 plans.
The CRC is primarily a self-study course. It uses uses a combination of four books of 150-200 pages each. These include Fundamentals of Retirement Planning, Fundamentals of Investments, Fundamentals of Retirement Plan Design and Fundamentals of Retirement Income Planning. Each book requires about 15 to 25 hours of study for a four-hour exam with 200 multiple choice questions. The books are supported with 30 e-learning modules with 18 hours of content. The course has an 85% pass rate and costs $900.
Chartered Retirement Planning Counselor (CRPC)
The Chartered Retirement Planning Counselor designation is offered by the College for Financial Planning, and according to its statistics, increased the graduates’ income graduates by 12% in 2011. The course includes 12 sections, including such topics as managing assets in retirement, planning for incapacity, and estate planning. (Those who have taken the longer and harder Certified Financial Planner (CFP) course may find parts of the CRPC redundant.) Advisors who take the CRPC course can test out of up to one-third of the CFP educational material. Cost: $1,085.
Certifications for plan sponsor advisors
For advisors who work with employer-sponsored retirement plans and small business owners, two of the most widely sought designations are the QCFP and C(k)P. Each offers a basic certificate that signifies expertise in the fundamentals of retirement plan laws and structure, followed by a more in-depth designation described below.
The Qualified Plan Financial Consultant (QCFP), offered by the American Society of Pension Professionals and Actuaries (ASPPA), focuses on all the technical information that advisors who work with plan sponsors need to know. It covers the pros and cons of different types of plans, their vendors, hybrid plan design, advanced qualification testing, plan documentation, distributions and taxation, as well as legal and fiduciary issues.
Because pension rules constantly evolve, advisors need specialized knowledge to keep up with changes. There is one online exam with 85 multiple-choice questions and one proctored exam with 75 questions. The course requires 40-60 hours of self-study. Cost: $1,000.
The Certified 401(k) Professional, or C(k)P, is a new offering from The Retirement Advisor University (TRAU at UCLA’s Anderson School of Management Executive Education. The curriculum includes three days of classes taught by Anderson professors, online lectures and self-study. In addition to legal and fiduciary technical information, the C(k)P offers a suite of courses on marketing and selling plan management services, managing an advisory practice, and maximizing retirement income for plan participants. To pass and become certified, plan advisors must get at least 70% of the exam’s 125 questions correct. Cost: $4,950.
© 2012 RIJ Publishing LLC. All rights reserved.
