I began my career as an external wholesaler in the mid-2000s for a major variable annuity company. My experience and exposure with high ranking industry executives has given me a unique perspective on how and why the financial advisor industry operates the way that it does.
I believe that the term ‘fiduciary’ is mostly used today as a marketing term to convey a false sense of confidence to the investing public.
Today there are over 10,000 advisors that market themselves as an Accredited Investment Fiduciary (AIF) – a designation created by the for-profit fiduciary training and software company Fi360.
The first AIF designation was issued in October 2002 by the same organization but under its former name, The Center for Fiduciary Studies. By April 2012, it was reported that there were more than 5,200 active AIF designees.
The Center for Fiduciary Studies was founded by Don Trone in 1999 as a for profit fiduciary training company. Over the years Trone built a reputation, both, for his fiery character and his dedication to the fiduciary movement in the financial services industry. His work was even cited by the Department of Labor in 2002 as best practices for fiduciaries.
Then, in 2007, The Center for Fiduciary Studies board of directors voted Trone out as CEO and replaced him with current CEO Blaine Aiken. That same year the company renamed itself Fi360.
Today, Fi360 promotes three services to financial professionals and institutions: Learning & Development, Software & Technology, and Data & Analytics.
Reviewing FINRA’s overview of the AIF designation you will see somewhat confusing information. https://www.finra.org/investors/professional-designations/aif
First, the issuing organization is listed as “The Center for Fiduciary Studies” even though the link is directly to Fi360’s website which has no reference to The Center. A Google search for The Center for Fiduciary Studies turns up this PDF which describes it as the “training portion” of Fi360. https://www.fi360.com/main/pdf/CFS_profile.pdf
Second, you will notice that FINRA shows the designation is listed as accredited by “none”. Yes, that is correct, the Accredited Investment Fiduciary (AIF) designation is not accredited by any institution.
Advisors earn this designation after passing a single exam. Fi360 offers a self-paced study option through an online course or a one-day class which must be completed prior to the exam.
6 hours of CE is required annually to maintain the designation. Fi360 is gracious to offer the annual CE training at no cost.
When registering for the designation Fi360 notes “Fi360 partners with many organizations to provide AIF designation training to their advisors. Fill out the form to find out if you qualify for any discounts”.
Fi360 Director, and primary instructor for Fi360 training, Rich Lynch was interviewed as a guest in Dec. 2016 on the podcast hosted by the401kstudygroup.com titled “The AIF, is it a marketing tool?” https://soundcloud.com/fi360/the-aif-is-it-a-marketing-tool
Host Chuck Hammond asked Lynch how advisors were using the AIF designation to highlight their experience and qualifications with retirement plans, Lynch included the following in his reply, “Often times a comment that I’ll get in class…you know Rich, it’s not like you mentioned anything that I didn’t already know or hadn’t already heard before”
Both speakers made clear their opinion that the AIF designation should be used as a tool for advisors to differentiate themselves from the competition. In other words – it should be used as a sales tool to win business.
I believe that Fi360 is using this designation as part of a loss leader strategy to sell their 10 Technology and Analytics products.
I believe that the designation’s name is misleading to the public as it is not accredited.
I believe that the training and CE requirements are inadequate.
I believe that the influence that this organization has on the fiduciary movement poses serious ethical questions.
I believe that a fiduciary is not only someone who can communicate fiduciary principles but is someone who has the character to fulfill them.
Keep asking questions.
Submitted May 03, 2019 at 06:17PM by iamreeb http://bit.ly/2vKLRxb
