Is it Necessary for Financial Advisors to Collect Badges?

By: Joyce Schnur
March 29, 2019
illustration of a financial services badge

Girl and Boy Scouts have long used a system of badges to help children and young adults learn necessary life skills. As we grow older and enter our professional lives, we are still searching for those badges. The easy analogy is the Armed Forces. They have a prescriptive formula on how to move up the ladder and gather additional badges or, in this case, stripes. Is the financial services industry any different?

Differentiate Yourself

This is a competitive business, and financial advisors need to differentiate themselves as they compete for customers. Many advisors try to differentiate themselves by piling on and earning many different badges. There are over 100 different financial planning designations. A fairly comprehensive list can be found on Wiser Advisor. However, many of these designations do not prepare advisors to give appropriate advice to their customers.

The list of topics and issues that face consumers are very comprehensive, complex, and interwoven. For example, it is impossible to make a decision to invest in a mutual fund without knowing how the allocation fits with the other investments, how much to invest given the various insurance needs, how the account should be titled to fit in the estate plan, and what the tax consequences are of these decisions. To many advisors, differentiation means collecting several badges that are easy to achieve, with the desire to display them on their business cards and company stationary.

Advisors can become Boy Scouts by making smart decisions on the quality and the educational value of the badges they choose to pursue. There are few barriers to entry into this field, and advisors need to differentiate themselves. But, the Boy Scouts (i.e., the advisors) understand the educational value of the topics taught and applied in a comprehensive designation’s curriculum. There is no doubt that advisors need a strong foundation in all financial planning topics, but that doesn’t mean that advisors have to provide services in all topical areas.

The educational need is the ability to recognize issues, educate the customer, and provide solutions. Advisors choosing a designation, such as CFP® certification, are better prepared to quarterback the client’s financial game plan. This is the badge that ultimately differentiates the advisor from the field and should be the start of the collection. This badge is necessary to be successful in the field and is the basis of the profession, just like the Boy Scout who learns to build a fire.

Sometimes, the issues in a client situation necessitate bringing in an appropriate specialist. Advisors should not feel threatened by using specialists. Their customers will appreciate the completeness of the advice, and not feel like the advice was all about product placement. Remember, growth in this business model is primarily achieved through referrals from existing customers, and this may be another opportunity to earn a badge. If advisors find they have a particular interest or niche client base they would like to serve better, they should seek out a new badge—find an additional designation that fits with the type of clients they are advising or wish to advise. Perhaps, a particular advisor finds that her client base is composed mainly of baby boomers or clients who run their own business. If a certain topic interests an individual advisor, she should become a specialist. Earning additional badges and gaining a reputation, as well as new customers, are surefire ways to grow a financial advising business.

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Become an Eagle Scout

But how does an advisor ultimately become an Eagle Scout? The Eagle Scouts recognize their skill gaps. These are generally not topical or technical knowledge gaps, but rather skills needed to become better advisors. The Eagle Scout seeks out professional development opportunities, often soft skills or additional competencies to earn a different type of badge. It is not about the collection of more designation badges to be displayed on a business card, but rather about the achievement of a new skill.

Education is changing. There is a movement by many institutions to offer Massive Open Online Courses (MOOCs). Entities such as the Bill & Melinda Gates Foundation are putting money into the development of MOOCs. Education opportunities are everywhere—traditional and non-traditional classrooms, technical knowledge and soft skills. The advisors seeking to be Eagle Scouts are constantly in search of these opportunities.

In the growing field of financial advising, advisors need to be able to distinguish themselves. They become a Cub Scout by achieving proper registration and licensing. This puts them in the pack. As a Boy Scout, one of the first skills they learn is how to build a fire and control it. Financial advisors are no different. So, I resoundingly say “yes” to the question, “Is it necessary for financial advisors to collect badges?”

CFP® certification shows advisors how to provide advice to their clients. It provides the necessary education and technical knowledge required to manage their client’s financial issues. Once they understand their business model, advisors should go out and seek additional badges to further educate themselves, as well as their customers. Continuing education is the key to helping them grow their business. But, remember, education can be either about gathering badges that are additional designations, or it can be about seeking out training to fill in skill gaps through a professional development curriculum. Advisors just need to figure out how to display their badges and get their message out to current and potential customers.


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