Demand for “responsible” investment options has never been higher. In fact, at the end of 2019, more than one out of every three dollars that were being professionally managed in the United States—$17.1 trillion or more—was invested according to sustainable, responsible, impact (SRI) strategies. Industry experts also confirm that a majority of investors want their investments to incorporate environmental, social, and governance (ESG) criteria.

For financial advisors, this demand presents several challenges. 

First, how can they acquire the insight and expertise to competently guide their clients towards ESG investments that fit their priorities? Second, how can they provide those clients with tangible evidence that they have genuine SRI expertise? 

Recognizing these challenges, the College for Financial Planning®—a Kaplan Company created the Chartered SRI Counselor (CSRIC®) professional designation program for personal financial advisors who provide advice to help individuals manage their money and plan for their financial future. This article provides an overview of the program.

Becoming a Chartered SRI Counselor 

Developed in partnership with US SIF, The Forum for Sustainable and Responsible Investment, the CSRIC® designation program is a unique program that blends SRI foundational knowledge and scenario learning. As a leading major financial credential dedicated specifically to SRI, the CSRIC® designation is supported by top financial firms. 

Who Should Enroll in the CSRIC® Professional Designation Program?

The CSRIC® Professional Designation Program is for advanced financial advisors who wish to obtain foundational knowledge and best practices for advising clients on SRI to help individuals manage their money and plan for their financial future, including

• Experienced advisors who desire financial planning credentials to advance their career
• Advisors who wish to specialize in SRI investing for new or existing clients
• Advisors who wish to pursue a Master of Science degree at a later date

Students enrolled in the program will learn the history, definitions, trends, portfolio construction principles, fiduciary responsibilities, and best practices of SRI investments.

The CSRIC® Program Curriculum

The CSRIC® Professional Education Program is a graduate-level course. 

The seven-course modules, which are offered as Live Online or OnDemand are:

• The Foundations and History of SRI
• Approaches to SRI 
• Shareholder Advocacy, Community Investing, and Corporate Responsibility
• Portfolio Construction and Incorporating SRI into Financial Advising
• ESG Performance, Risk, and Rating Metrics
• The Fiduciary Standard and Communicating the Value of SRI
• Current and Future Opportunities

How Long to Study for the CSRIC® Professional Designation Program

The typical student should expect to spend approximately 135 hours in course-related activities to study and prepare adequately for the program’s examination. The CSRIC® program also does “double-duty” for professionals who are considering a master’s degree: designees receive direct credit for one course in the College’s MS in Personal Financial Planning program, saving them time and money while pursuing multiple credentials.

Certificate in ESG Investing vs. CSRIC® Professional Designation Program

Start Earning the CSRIC® Professional Designation Today 

U.S. SIF members receive a 15 percent discount on the CSRIC® course and course-related materials. In addition, many leading financial advisory firms endorse the CSRIC® designation and will reimburse advisors for course-related expenses.

The Series 65 license, known as the Uniform Investment Adviser Law Examination, qualifies individuals to provide investing and general financial advice to clients. Passing the Series 65 exam qualifies individuals as Investment Advisor Representatives (IARs).

Obtaining the Series 65 license is important for representatives who provide advice on ERISA-regulated retirement retirement accounts.

A recent College for Financial Planning report indicated 84% of financial professionals training related to practical soft skills, such as how to market yourself and communicate with clients as important as they develop their careers.*

How to Get the Series 65 License

Unlike many other FINRA Series exams, the Series 65 exam does not require an individual to be sponsored by a member firm. If you are not Form U4 registered or affiliated with a firm through FINRA’s Web CRD system, you should use the Form U10 to request and pay for the Series 65 exam. There is an exam fee that is commonly covered by the sponsoring firm if you are Form U4 registered, or by the individual if you are not sponsored.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

Series 65 License Exam Format

The exam consists of 130 multiple-choice questions, and you have 3 hours to complete it. To pass the exam, you must get at least 92 out of 130 scored questions correct. In other words, you need just over 70% to pass.

Series 65 License Exam Curriculum

The exam covers four topic areas:

• Economic factors and business information
• Investment vehicle characteristics
• Client investment recommendations and strategies
• Laws, regulations, and guidelines on unethical business practices

In June 2023, NASAA added new content to the exam to better reflect the skills and knowledge needed to be an IAR today. Some new specifications emphasize the characteristics of different types of investments, including SPACs, blind pools, blank check companies, non-liquid REITs, and digital assets. Alternative investments were also updated to better reflect the changing marketplace. In addition, new areas were added to highlight the importance of CE for IARs, exploitation of seniors and vulnerable adults, and Regulation BI.  Updates were also added for recent regulatory changes in the Secure Act 2.0.

While the passing score was decreased, the weighting of topics, number of questions, and length of the exam were not changed. Visit NASAA to view the most up-to-date content outline.

Ready to Start Your Series 65 Licensing Exam Prep?

Browse our website to learn more about our live and online study options, series 65 study materials, and to purchase a Series 65 exam prep package. 

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*This is one of the findings of a quantitative survey conducted by the College for Financial Planning®—a Kaplan Company between June 27 and August 7, 2023. For this survey, a sample of 951 2022 and 2023 graduates of the College for Financial Planning was interviewed online in English.

We’ve enlisted the help of over 100 established insurance professionals to get their take on why insurance agents often fail and what steps you can take to be successful. Avoid these common pitfalls and start your career as an insurance agent successfully.

How many insurance agents fail?

The vast majority of new insurance agents fail or quit. While it’s tough to nail down exactly what percentage of insurance agents fail to succeed within the industry, the unsuccessful majority succumb to common mistakes that can be avoided with diligence, patience, and hard work.

Why Insurance Agents Fail: Common Mistakes

Insurance agents succeed when they prioritize their customers’ needs over their own profits.

The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs. Agents who bring the right solutions to customers build trust, and that helps them build a book of loyal customers. Integrity is a cornerstone of success in the insurance industry. The agents with integrity have the most potential to make it long-term.

Insurance agents enter the industry with overambitious expectations of growth and success.

New professionals often have unrealistic expectations of how long it will take to build a book of clients and generate ongoing revenue. Building your reputation in a community takes time and requires dedication, proactivity, and patience. The first five years will be difficult for anyone trying to break into this industry. 

While building your business, you should expect to work longer hours, including nights and weekends, to accommodate clients. You must be willing to work hard to build your book of clients. This industry is about long-term growth. It’s not a get-rich-quick scheme.

Insurance agents often lack necessary mentorship.

Given the large population of older insurance agents in the field currently, mentorship has never been more readily available for new agents. Look for opportunities to connect with seasoned industry veterans, who can share their experiences and wisdom with you. It’s priceless.

According to Chronus, 71% of Fortune 500 companies offer professional mentoring programs for their employees. Hopefully, you work for an agency that offers a mentorship program. Not only does this help with knowledge transfer, but also career and leadership development. 

While technology continues to change many of the day-to-day particulars of the industry, the principles of success in the insurance industry are the same today as they have always been. A great way to develop business strategies that will work today is to examine and learn from the ones that have worked in the past

Want more advice on growing your insurance business from successful agents? Download this free Launching Your Insurance Career eBook.

Insurance agents need to be able to handle rejection well.

Rejection hurts. Fear of rejection is common among anyone working in sales, particularly those who are just learning how to sell their value and products. Agents who engage in activities like writing industry articles, creating a newsletter, or attending community events tend to succeed more in the long run because they are able to regularly communicate with potential customers even if they say “no” initially. 

These activities also help you build credibility and confidence in yourself, which helps you better take rejection when you receive it.

Insurance agents must be involved in the community or professional organizations.

Like most salespeople, insurance agents have the added challenge of debunking the “used car salesperson” stigma. One way to accomplish this is by getting more involved in the local community. Not only does it help to build credibility, but it increases visibility among community members. Relevant professional organizations are another great way to get involved in a local community, build relationships, and even find potential new clients.

Some agencies have gotten involved in a program called Agents of Change. Allstate agent Jay Adkins developed the program to give back to the community and differentiate his agency from competitors. In this program, an agency chooses a community cause every 45 to 60 days, and a campaign is launched to provide assistance to the child, family, nonprofit, or event in need. 

Not only does this help put the agency in front of the community members often, but it also helps agents build a solid reputation in the community. Furthermore, it gives you conversation pieces and an opportunity to connect with prospective customers on another level.

Insurance agents should have a long-term business plan with specific goals.

One of the biggest mistakes new insurance agents make is assuming they’ll be successful right off the bat. Building a book of clients requires time, commitment, and goals. The best way to get focused on the right business goals is by having an organizational business plan. 

As of the end of 2012, only 15% of agencies surveyed by Insurance Journal had a written business plan. Developing a plan involves writing down goals for revenue, lead generation, conversion, and anything else you want to measure. 

You will also want to define what you are best at, what opportunities you have, and how to focus your marketing efforts around that. When you have a clear plan to focus on, you will be able to evaluate all of your activities against it.

Industry leaders embrace and adapt to new and emerging technologies first.

An important skill for all insurance agents is being able to adapt well to change. Technology is constantly evolving and changing the way lead generation and tracking are performed. Understanding customer relationship management (CRM) tools and finding ways to automate lead generation efforts and marketing will allow you to make time for other tasks.

Social media is another important tool for marketing your insurance business. Because of the robust opportunities to target particular demographics and geographical locations, social media ads can be a great way to reach prospective customers affordably. You can also use social media to promote your community involvement and partnerships. This will help to build the reputation of your business.

Try Today’s Insurance Licensing Question Of The Day

Insurance agents must be disciplined in time management.

Although flexibility is a big perk in the insurance industry, it can make time management a struggle for new agents entering the business. A good way to ensure you use your time well is to block out time for prospecting and sales activities. Without that set time, it is much easier to let non-sales-related tasks take (or steal) priority. You need to understand how to work smarter and harder. 

Insurance agents should ask themselves:

• Is this activity moving me toward a business goal?
• Is this activity moving me toward a personal goal?
• How much business can I attribute to this activity in the past?

Activities that don’t qualify should be done minimally. Keeping track of how you spend your time consistently helps identify work habits that don’t support the goals of the agent and the organization.

Insurance agents are marketers, too.

While people skills are crucial, many insurance agents fail because they do not know the market well enough. One of our survey respondents even claimed that in order to be successful in the insurance industry, 75% of efforts should be in marketing, 20% in sales, and 5% in operations. Marketing can be a daunting task. Determining the ideal customer segments for the products you sell and how to best reach those audiences is a good starting point.

A referral marketing program that benefits both existing and new customers is a cheap and easy tactic that can produce great results. Agents who establish themselves as thought leaders in the industry by blogging, creating newsletters, and writing for larger insurance publications build a reputation and name recognition in the community. 

These are also great opportunities to get links back to your website, which helps build website authority and can help it rank better in search engine results.

As an insurance agent, being unreliable is a non-starter.

“Not enough follow up and follow through” is one of the most commonly cited reasons insurance agents fail. While many agents are well-intentioned when they promise to get back to a client, it is often poor organizational skills that lead to the lack of follow-through. 

Getting into the habit of following up on sales leads as soon as possible will make a big difference in conversion. With a solid, consistent system in place, you will be less likely to neglect or forget to follow up with your prospective customers.

One way organizations can help improve the follow-up and follow-through of their agents is through a good customer relationship management (CRM) system. Having a system in place that helps you track your conversations with prospective and current clients and notifies you when they need to follow up will go a long way in ensuring you do not forget. 

A CRM system can also help track key dates like policy renewal windows, holidays, and birthdays to ensure customers see that you value them.

Insurance agents must be knowledgeable in state laws and regulations.

A strong desire to learn and keep up with the industry is an important trait for an insurance agent. Laws and regulations change frequently in different states, and it is vital that agents know what those changes mean to their customers. Keeping up with publications like Insurance Journal, PropertyCasualty360, and other trade journals like the NAIFA blog is important. If your organization has an intranet site, that is a good place to stay informed of changes and how they may impact their customers.

How to Spot Money Laundering in Insurance

Insurance agents must be knowledgeable in products and offerings.

Listening to clients is vital to the success of insurance agents. A common reason insurance agents fail is not taking the time to listen to client’s needs and determine what product truly suits their situation. There is an overwhelming amount of insurance products on the market, and it can be difficult to keep up with all the options. It is important that you take the time to research products and figure out what makes the most sense for any situation. This is how agents earn the trust of clients and retain them long-term.

Organized documentation is key for insurance agents.

Proper documentation is critical for success in any industry. For insurance, an agent’s files are used as key evidence in defending error and omissions (E&O) cases. A single piece of documentation can lead to a decision in favor of an agent in court. Compliance audits by the government are another reason to have detailed documentation of all activities by agents.

Hopefully, you work with an agency that utilizes an Electronic Document Management System (EDMS) to create efficiencies and eliminate costly inconsistencies in paper-based processes. An EDMS allows users to access documents anytime, anywhere. If a client calls while you are out of the office, documents could still be accessed and discussed on the spot. This saves time and reduces the amount of phone tag you have to play with clients.

Insurance agents should ask for referrals.

Referrals are one of the most cost-effective and efficient ways to market your agency. They also tend to hold more weight with prospective customers than traditional marketing efforts because the endorsement comes from a peer rather than the agency itself. It has been estimated that 70% of referral business closes and converts.

A common mistake of insurance agents is to wait too long to ask for a referral. It can be easy to shy away from asking for a referral until the client is finished with their experience or services, but why wait to ask for a referral when something could go wrong in their experience later? It is human nature to want to help others succeed. The worst that can happen is someone will not give a referral, but then you are no worse off than if you had not asked at all.

Insurance agents should not make empty promises to clients.

When you make promises you can’t deliver on, it opens up the possibility of lawsuits. It is also the quickest way to lose the trust of your clients, which impacts retention and long-term profitability. The best way to prevent that is to operate from a credo or service mantra for yourself. Include promises to work for the client; make their lives as easy as possible; take the time to understand their needs and select the best products for them; offer choices and walk clients through them in detail; and own your mistakes. 

Operating from a series of promises to deliver customer satisfaction based on your organization’s values can help guide your client relations.

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If you're ready to take start your career in insurance and earn your license, Kaplan's insurance certification study packages can help you succeed.

A career in wealth management for the sports and entertainment industries offers the exciting opportunity to work with athletes and entertainers from around the world and guide them on their financial journeys. This specialized type of wealth manager can expect a lucrative and rewarding career as well as the chance to make a real impact in their clients’ lives. In this article, we provide a comprehensive overview of why and how to become a certified sports and entertainment wealth manager.

What does a sports and entertainment wealth manager do?

A sports and entertainment wealth manager is a type of wealth manager who works with high-net-worth clients in the sports and entertainment industries. They help their clients overcome the distinct financial challenges they face in their careers. From a sudden wealth event to uneven or multiple income streams, these professionals have added complexities in their financial lives and require a qualified advisor who can handle their specialized needs. The chart below showcases some examples of the clients you might work with as a sports and entertainment wealth manager. 

Unique Dynamics and Challenges of Sports and Entertainment Wealth Management Clients

Every profession in the sports and entertainment industries is unique and has its own earning profile and career span. Professionals who work in these industries need an accredited sports and entertainment wealth manager who understands the unusual dynamics and challenges they may face, including: 

• A sudden wealth event

• Uneven cash flow

• Multi-sourced income streams

• Variable career spans

• Lifestyle maintenance

• A broad network of influencers

• Physical, emotional, and behavioral risks with potentially long-term impacts

Benefits to Becoming a Sports and Entertainment Wealth Manager

Wealth management is a rewarding financial career with steady industry growth, job flexibility, and high earning potential. As a wealth manager, you can choose to specialize in the types of clients you work with, becoming an expert in a specific industry and ultimately garnering a higher perception of authority in the marketplace. For example, you could become a sports and entertainment wealth manager and work exclusively with athletes and entertainers. Becoming a sports and entertainment wealth manager has numerous benefits, including:

• Income potential. As a sports and entertainment wealth manager, you have the opportunity to earn more by taking on as many high-net-worth clients as you can handle.
  

• A flexible work schedule. Sports and entertainment wealth managers have the flexibility to create a work schedule that suits their needs, unlike other career paths that follow a traditional 9-to-5 schedule.
  

• The chance to work with interesting clients. Sports and entertainment wealth managers often work with famous, high-profile clientele as well as rising stars.
  

• An opportunity to make a meaningful impact. As a sports and entertainment wealth manager, you have the chance to make a real difference in people’s lives – from helping them grow their businesses to planning for retirement and leaving a legacy.

Sports and Entertainment Wealth Manager Salaries

You can expect to make a competitive salary as a wealth manager working with high-net-worth sports and entertainment clients. According to data from Glassdoor, the average salary of a wealth manager in the United States is $84,668 per year, with additional pay from commission and other bonuses bringing the total up to $100,039. Salaries will range depending on your experience, client base, and credentials, but Glassdoor cites the wealth manager salary range as anywhere from $25,456 to $490,786 per year. 

What skills do you need to be a sports and entertainment wealth manager?

Wealth management is a client-focused industry, and as a sports and entertainment wealth manager, you’ll be working with high-net-worth clients and dealing with sensitive financial information. Some soft skills that will help you succeed as a sports and entertainment wealth manager include:

• Communication skills. You’ll be working closely with clients, so strong communication skills are critical to this career path. The ability to hold productive conversations and actively listen will help you build relationships and establish a strong client base.

• Integrity. Wealth managers often deal with sensitive, private information about their clients’ assets, so integrity is critical to their roles. Sports and entertainment wealth managers, specifically, may work with high-profile clientele, so having a reputation for discretion will be key in attracting and maintaining clients.
  

• Analytical skills. One of the top requirements of all types of wealth managers is the ability to analyze and interpret data into logical information for your clients.
  

• Customer service. Prioritizing your clients’ needs and responding to them in a timely manner will help you build relationships and maintain customer satisfaction.

• Problem-solving. Being able to solve your clients’ unique financial problems and overcome challenges will be critical to your success as a sports and entertainment wealth manager.
  

• Proactivity. Sports and entertainment wealth managers devise proactive and assertive financial strategies for their clients, acting in anticipation of future needs.
  

• Market awareness. Spotting investment opportunities and staying on top of market trends will allow you to successfully advise your clients.

Education to Become a Sports and Entertainment Wealth Manager

Sports and entertainment wealth managers have an in-depth and broad knowledge of the stock market, tax laws, banking, and more. Most wealth managers hold a bachelor’s degree in finance, accounting, business, or a related field; some may even hold a master’s degree or doctorate in wealth management. In addition to a college education, competitive wealth managers also hold certifications that demonstrate their commitment to learning and showcase their expertise. Wealth management certifications like the AWMA® designation and the SE-AWMA℠ designation set you apart from other wealth managers and prepare you to handle your clients’ financial needs.

What is the SE-AWMA^SM designation?

The Sports & Entertainment Accredited Wealth Management Advisor℠ (SE-AWMA℠) designation is the certification you receive after successfully completing the SE-AWMA℠ designation offered by the College for Financial Planning® (CFFP)—a Kaplan company. The SE-AWMA℠ designation is the first and only professional designation from an accredited college or university designed to prepare advisors to address the sophisticated financial planning needs to help high-net-worth sports and entertainment clients protect, grow, and transfer their wealth. Earning the SE-AWMA℠ mark reinforces your credibility with sports and entertainment wealth management clients and proves you have the specialized knowledge needed to help them navigate their unique financial challenges.

What if I have already received the AWMA® designation? 

If you have already received the Accredited Wealth Management Advisor® (AWMA®) designation from the College for Financial Planning, you are well on your way to earning your SE-AWMA℠ designation. You only need to complete the Sports & Entertainment (SE) Supplemental Education for the AWMA® program to earn the SE-AWMA℠ designation. This additional course module will build on the wealth management knowledge you learned in the AWMA® designation program and train you to handle the specialized financial needs of athletes and entertainers.

What is the SE-AWMA^SM program?

The College’s SE-AWMA℠ program prepares advisors to address the sophisticated financial planning needs to help high-net-worth sports and entertainment clients protect, grow, and transfer their wealth. The program augments your existing skills, so you’ll be able to analyze and evaluate different planning strategies that account for sports and entertainment clients’ unique circumstances, including:

• Qualitative planning

• Trusts

• Investments

• Employee and retirement benefits

• Cash flow, budgeting, and tax planning

• Business planning 

• Estate planning

Coursework in the SE-AWMA℠ program utilizes real-world situations and case studies to illustrate planning techniques instantly applicable to your practice. The program is delivered via the College’s exclusive online learning platform. Enrollment includes your choice of Live Online classes or OnDemand classes, a learning platform to access course materials and study resources, and expert instructors providing personalized guidance in class and via email as you study from your online learning platform. 

How to Earn the SE-AWMA^SM Designation 

See below for the step-by-step process on how to earn the SE-AWMA℠ designation:

1. Complete the College for Financial Planning’s online SE-AWMA℠ program in 120 days or less (this includes taking and passing the final exam). The modules cover getting to know your high-net-worth client; investment risk, return, and performance; advanced investment products and strategies; considerations for business owners; income tax planning for high-net-worth clients; executive benefits planning for high-net-worth-clients; estate planning for high-net-worth clients; fiduciary and regulatory issues for financial services professionals; and special issues for athletes and entertainers.
   

2. Take a module quiz after each class.
   

3. Pass the final exam, which is taken online through your learning platform.
   

4. Upon graduating from the program, apply for the SE-AWMA^SM designation.

What are the benefits of earning the SE-AWMA^SM designation?

There are multiple benefits of earning the SE-AWMA℠ designation, including:

• Reinforcing credibility with clients in the sports and entertainment industries by earning the only professional designation from an accredited college or university focused on the wealth management of this special client segment.
  

• Gaining specialized knowledge to address the unique circumstances and financial planning needs of clients in these niche segments, such as the unique tax, retirement, and estate implications.
  

• Distinguishing yourself from other advisors to help expand your client base by becoming an accredited sports and entertainment wealth manager.
  

• Earning stackable credits toward our CFP® certification education program or Master of Science Degree.

How long does it take to get the SE-AWMA^SM designation?

How long it takes to get the SE-AWMA℠ designation depends on how quickly you finish the College for Financial Planning’s program. Students have a maximum of 120 days to complete the SE-AWMA℠ program, including passing the final exam. The program is delivered online through your choice of classes. You can either take the Live Online option, which has a fixed schedule, or the OnDemand option, which you can start anytime and complete at your own pace. On average, students should commit to 8-10 hours per week of studying and expect to spend a minimum of 135 hours in course-related activities. 

Are SE-AWMA^SM program credits transferable?

Looking to advance your finance career even further by building upon your SE-AWMA℠ designation? Graduates of the SE-AWMA℠ program receive credit that you can use towards your next credential, saving you time and money. If you’re interested in pursuing your CFP® certification or master of science degree, here’s how credits from the SE-AWMA℠ designation will transfer:

• Course FP513 Investment Planning in the College’s CFP® certification education program or
  

• One elective course in the College for Financial Planning’s Master of Science Degree in Personal Financial Planning         

The AWMA® designation, also called AWMA® certification, is the industry benchmark for wealth management credentials recognized by top financial firms. AWMA® stands for Accredited Wealth Management Advisor^SM. As a financial professional, you’ve undoubtedly heard of this top-tier certification, but you may be wondering if it’s right for you. In this article, we discuss what the AWMA® designation is and how it can benefit your career.

What is the AWMA® designation?

The AWMA® designation is the certification you receive after successfully completing the AWMA® Professional Designation Program. It is an indication that you can effectively identify, analyze, and recommend strategies for the unique needs of high-net-worth clients. The AWMA® mark assures your clients that you have the education and knowledge to help them achieve their wealth management goals. After earning the AWMA® designation, financial professionals showcase the certification by listing it on their business cards, resumes, LinkedIn profiles, and more. The AWMA® certification is also listed by FINRA, a private, self-regulatory organization that regulates certain aspects of the securities industry.

What is the AWMA® Professional Designation Program?

The AWMA® Professional Designation Program is an education program for financial professionals offered by the College for Financial Planning® (CFFP)—a Kaplan company. The program teaches financial professionals how to advise their high-net-worth clients on growing, preserving, and transferring their wealth. Its specialized curriculum contains sections on behavioral finance, working with small business owners, and succession and exit planning. The AWMA® program launched in 2005 and is offered exclusively via CFFP’s digital learning platform. 

Is the AWMA® designation right for you?

The AWMA® offers you a chance to distinguish yourself in wealth management. This designation is right for you if you are:

• An experienced advisor who wants financial planning credentials to advance your career

• A producer who is transitioning from product sales into offering a broader range of services

• An advisor with general financial knowledge who wants to specialize in the unique needs of high-net-worth clients

• An advisor who wants to pursue the CFP® Certification or a Master of Science degree at a later date
  

Learn more about the AWMA® program and how to enroll here.

Requirements to earn your AWMA® designation

To earn the AWMA® designation, follow these steps:

1. Complete an eight-module education program provided by CFFP. There are no prerequisites for this program, and you have 120 days to complete it (including testing and passing the Final Exam). The modules cover getting to know your high-net-worth client; considerations for business owners; income tax strategies for high-net-worth clients; executive benefits planning for high-net-worth clients; estate planning for high-net-worth clients; and fiduciary, regulatory, and ethical issues for financial services providers.
   

2. Take and pass the AWMA® exam. There are 80 questions on the exam, and the passing score is 70 percent. According to Analyst Forum, you should plan on studying for about 150 hours.
   

3. Agree to abide by a code of ethics.

How long does it take to get the AWMA®  designation?

How long it takes to get the AWMA® designation depends on how quickly you complete the CFFP program and pass the AWMA® exam. You have 120 days to finish CFFP’s eight modules and pass the program’s final exam. We recommend at least 135 hours of study for the course. On average, it takes financial professionals two to three months to earn the AWMA® designation.

What are the benefits of earning an AWMA® designation?

Achieving the AWMA® designation is a huge milestone in your financial career. Some of the benefits of earning the AWMA® mark include:

• Earning more while working with fewer clients. AWMA® designees have reported that since earning the credential, they are able to attract and maintain higher-net-worth clients, which means they can increase their income while focusing on fewer clients at a time.

• Getting tangible career benefits. 72% of professionals surveyed with specialized financial designations such as the AWMA^® designation reported an increase in their client base after earning their most recent professional designation. Financial planning professionals working in a financial planning role both the year before and year after receiving their most recent specialized professional designation such as the AWMA^® designation reported an average 16% earnings increase in the year after earning that professional designation

• Differentiating yourself from your peers. Achieving the AWMA® designation signifies you have the qualifications to work with high-net-worth and ultra-high-net-worth clients. Some of these clients will specifically look for advisors who have received the AWMA® designation, allowing you to grow your client base and set yourself apart from competitors.
  

• Earning stackable credits. Earning the AWMA® designation saves you time and money by allowing you to stack credits. AWMA® designees are qualified to earn credit for completing course FP513 Investment Planning in our CFP® certification education program or receive credit for an elective in our MS Degree in Personal Financial Planning.

• Fulfilling continuing education requirements. For CFP® professionals who are required to complete continuing education requirements as part of their certification renewal, the AWMA® designation program completion fulfills 28 hours of continuing education. If you currently hold a professional designation from CFFP, completion of the AWMA® program fulfills 16 hours of continuing education as part of the renewal of your current designation.
  

• Learning skills that will benefit you and your clients. Completing the AWMA® designation program gives you the most up-to-date financial skills and knowledge you can use to advance your career and serve the unique needs of your high-net-worth clients via behavioral finance and emotional intelligence. 

What does a wealth manager do?

A wealth manager offers comprehensive financial advice to high-net-worth clients. They go beyond providing investment advice by taking a holistic approach to meet the complex needs of their clients. Typical services offered by wealth managers include:

• Investment advice and management

• Estate planning

• Retirement planning

• Trust services

• Risk management and insurance planning 

• Tax planning and accounting services

Download the free eBook, Getting There from Here: Career Path Stories from Finance Professionals, to read firsthand accounts of what it's like to have a rewarding career in finance.

What is the difference between a wealth manager and a financial planner?

While there is no strict definition for wealth managers or financial planners, there is generally considered some overlap between the two professions and some important distinctions. Wealth management is a comprehensive financial service for high-net-worth clients, typically with $5 million or more in assets. Wealth management services and strategies vary based on the needs of the client, but the overall goal of wealth managers is to help their clients accumulate, protect, and distribute their wealth. Financial planning is generally considered the first step in wealth management. Where the two roles diverge is that wealth managers work almost exclusively with higher-net-worth clients and provide a wider range of financial services. In contrast, financial planners primarily assist with lifestyle planning for clients in all income brackets. 

[Learn more: Is a Wealth Management Career Right for Me?]

What is the difference between a wealth manager and an asset manager?

The main difference between a wealth manager and an asset manager is that wealth managers offer long-term, holistic financial guidance while asset managers focus more on investment management and maximizing returns. Because wealth managers provide a wider range of financial services, they earn more than asset managers. Both wealth managers and asset managers may bill clients based on the amount of money they manage, but wealth managers may also be compensated via an hourly fee or a flat fee. Wealth managers are also more likely to be fiduciaries than asset managers, but it is not a requirement of the profession. 

Why Financial Professionals Should Learn Behavioral Finance

Why should financial professionals learn behavioral finance? For one, understanding the psychology, economics, and other social sciences that drive people to make certain financial choices can help finance professionals develop long-term relationships with their clients and build portfolios better suited to them. For another, the awareness of the effect that market and trading psychology, cognitive errors, and emotional reasoning have on investors is growing.

In fact, 70 percent of the 503 financial professionals who participated in a 2020 survey and who had not received behavioral finance training say they are now considering it. Seventy-eight percent of all survey respondents say they would be interested in behavioral finance training if they received accreditation for it. Seventy-nine percent feel that accreditation in behavioral finance would positively influence current and potential clients. Lastly, 90 percent think that behavioral finance training can help them build their client base and deepen relationships with existing clients.

If you’re a financial advisor, a behavioral finance approach to investing can help differentiate your services and ultimately better serve your clients. Let’s explore what is available to you in terms of becoming proficient.

What are Behavioral Finance Programs?

Behavioral finance is the study of the effects of psychology on investors and financial markets. It focuses on explaining why investors often appear to lack self-control, act against their own best interest, and make decisions based on personal biases instead of facts. Behavioral finance programs come in many forms. Some are courses and course modules offered by online training firms and universities. Others are professional programs offered by traditional universities. Some universities offer accredited behavioral finance degrees, including bachelor of science, masters of science, and Ph.D. programs. 

These programs also have all kinds of names—from “behavioral finance” to “behavioral economics and social health science.” They combine psychology and neuroscience with traditional financial practices. They aim to equip advisors with tools and training to further help their clients make sound financial decisions, maintain emotional competency, and achieve their financial goals. 

Accredited Behavioral Finance Professional℠ (ABFP℠) is the designation offered by the College for Financial Planning^®, a Kaplan company. This program helps to provide an understanding of theories and hands-on practice of the knowledge to help advisors translate what they learn into their day to day client interactions.

Who Should Earn a Behavioral Finance Designation?

Gaining knowledge that is part of earning a behavioral finance designation can benefit most finance professionals, especially those who are in wealth management, securities, and financial planning fields. The College for Financial Planning^® notes that finance professionals in mid-career to advanced career stages are most likely to benefit, such as experienced advisors who desire financial planning credentials to enhance their careers and advisors who wish to pursue a master of science degree at a later date. For that reason, the College’s designation is designed to accommodate working students. However, if you are in the process of earning a degree or credential in another finance field, the designation can help you as well.

No matter where you are in your career, the program gives you tools that help you understand clients better and motivate them to make wise financial moves. It also enables professionals to advance current career stages while earning credit toward their next credential.

Why Earn a Behavioral Finance Designation?

In today’s ever-changing and complex financial markets, any professional responsible for managing client assets should recognize the factors that lead to less-desirable outcomes for investors. Behavioral finance helps professionals understand the applied science of effective decision-making and how human brains are not wired to deal with the decisions that modern financial markets require. 

Because behavioral finance is an offshoot of conventional financial theory, anyone who masters skills as part of earning a designation in it can help their clients stay on a more rational course. By recognizing that human decision-makers are often influenced by emotion, biases, and cognitive errors, finance professionals with a behavioral finance designation can not only help clients see and manage their irrational tendencies, but they can also see their own. Other benefits of taking courses like the ones required for the ABFP^SM designation is that they help you understand why financial bubbles develop so you can design strategies that avoid that behavior and identify the psychological reasons that lead clients to make severe investment errors.

This program also helps advisors differentiate themselves by adding an extra dimension to the advice they provide to clients. Many investment-focused advisors, robo-advisors, and even other financial planning firms do not yet take the behavioral dimension into account when providing advice and developing goals. The ability to help clients manage their emotions and connect their goals and behavior with what is most important to them is a significant value-add.  An advisor who understands behavioral finance and uses it along with other skills and knowledge will also be better able to build deep, meaningful relationships with clients.

Behavioral Finance Skills for Financial Professionals

The fact of the matter is that investment markets are more about emotions than they are about rationality. This is where the science of behavioral finance comes into play. There are several studies that indicate that the difference between successful and unsuccessful investors is not in their cognitive abilities but rather in their behavioral abilities. Here are some of the advantages of using this philosophy after earning your designation to make investment decisions.

Understanding Your Clients’ Biases

Pointing out biased behavior, especially in the moment, may not be well received. To be effective, you need a plan in place in advance. Few of us are comfortable owning up to our own bias, but if you approach the subject correctly, your clients may benefit, and so will you. A more self-aware client should produce fewer counterproductive demands, which could mean less stress and greater productivity for you.  

Understanding Your Clients’ Behavior

The more you understand what motivates your prospects and clients, the better your chances of success when it comes to attracting and retaining them. When you begin to see things from your clients’ and prospects’ point of view, you can start to influence their decisions and help them make good ones. Then you will be able to build strong client relationships, anticipate your client needs, and manage their expectations.

Understanding Emotional Reasoning

Once you understand what may be getting in the way of solid decision-making, while you cannot remove emotions, you can help mitigate them. This could include utilizing goals-based investing, which helps you understand from the very first conversation what your clients are trying to accomplish. The more you understand your clients’ emotions and anticipate those behaviors, the better their financial decision-making can be. 

Behavioral Finance Applications for Retirement

Financial advisors with a behavioral finance designation can encourage clients to make binding decisions earlier in life and prior to the onset of cognitive impairment. They can also help protect older clients from unwisely draining their assets too quickly, either by recommending financial products that guarantee payouts for life, or by limiting the amount that may be withdrawn at a given point.

How to Become an Accredited Behavioral Finance Professional

As the first advisor-focused behavioral finance designation from an accredited college or university, the Accredited Behavioral Finance Professional℠ (ABFP℠) program, is a unique program that enhances advisors’ emotional competencies, client interactions, and financial planning advice through a thorough understanding of psychological explanations for economic behavior and hands-on practice of knowledge.

Designed for financial professionals in mid to advanced stages of their career, the ABFP℠ program brings together comprehensive research and trends from leaders and experts in the area of behavioral finance. Engaging, in-class activities enable you to start using your new skills with existing clients from day one.

Course topics in this program include:

• Foundations in behavioral finance

• Cognitive and knowledge errors

• Overconfidence and emotional reasoning

• Investor behavior

• Debiasing and client management 

• Behavioral finance applications

• Behavioral finance applications for retirement

After you complete your coursework, you will have to pass a final exam. The exam has 50 questions on it, and you will have two hours to complete it. The passing score is 70 percent or better. 

This program can also help you fulfill continuing education (CE) requirements. For example,If you are a CFP^® professional, it is one of the designation programs that fulfills 28 hours of CE as part of your CFP^® certification renewal. If you currently hold a professional designation from the College for Financial Planning^®, completion of a new professional designation fulfills CE hours as part of the renewal of your current designation.

Could a Behavioral Finance Designation Benefit Your Career?

The survey mentioned at the beginning of this article found that those who incorporate behavioral finance into client relationships see benefits in many areas. Of those surveyed who had received behavioral finance training, 79% said it resulted in better client relationships, 75% said it resulted in better client reception of their planning advice, and 22% said it resulted in more clients. 

If you are interested in earning the designation to benefit you or your career, read more information about behavioral finance designations.

Behavioral finance is the study of the effects of psychology on investors and financial markets. It focuses on explaining why investors often appear to lack self-control, act against their own best interest, and make decisions based on personal biases instead of facts. The reddit, Gamestop, Robinhood, and Melvin Capital story of early 2021 is an example from today’s news of how irrational, biased, and emotional investors move the markets. In this article, we define behavioral finance, and break down its components for better understanding.

Behavioral Finance Definition: What does Behavioral Finance mean?

Behavioral finance is the study of psychological influences on investors and financial markets. At its core, behavioral finance is about identifying and explaining inefficiency and mispricing in financial markets. It uses experiments and research to demonstrate that humans and financial markets are not always rational, and the decisions they make are often flawed. If you are wondering how emotions and biases drive share prices, behavioral finance offers answers and explanations.

Behavioral finance originated from the work of psychologists Daniel Kahneman and Amos Tversky and economist Robert J. Shiller in the 1970s-1980s. They applied the pervasive, deep-seeded, subconscious biases and heuristics to the way that people make financial decisions. At about the same time, finance researchers began to propose that the efficient market hypothesis (EMH), a popular theory that the stock market moves in rational, predictable ways, doesn’t always hold up under scrutiny. In reality, the markets are full of inefficiencies due to investors' flawed thinking about prices and risk. 

In the past decade, behavioral finance has been embraced in the academic and financial communities as a subfield of behavioral economics influenced by economic psychology.  By showing how, when, and why behavior deviates from rational expectations, behavioral finance provides a blueprint to help everyone make better, more rational decisions when it comes to their finances.

Understanding Economic Behavior and Economic Psychology

Understanding economic behavior and economic psychology is a field of study called behavioral economics. It uses psychology and economics to explore why people sometimes make emotional rather than logical decisions and why their behavior does not follow the predictions of accepted economic models. It looks for answers to questions such as why even experienced investors buy too late and sell too soon, or why someone doesn’t use their savings account to help with paying off massive credit card debt. It even studies anomalies such as the small but measurable advantage companies have in the market if their stock ticker abbreviations come first in the alphabet, or the effect of the weather on market values.

Behavioral economics has also identified that systematic errors and biases recur predictably in certain circumstances, offering a framework for understanding when and how people make mistakes. There are two types of human behavior that factor heavily in behavioral economics: heuristics and biases.

Understanding Economic and Financial Heuristics

According to behavioral economist Herbert Simon, most people use heuristics when confronted with a complex decision. Heuristics are mental shortcuts we use to decide something quickly or not at all. Investors and financial professionals often use heuristics when analyzing investment decisions. Heuristics are often based on assumptions or rules of thumb that often but not always, hold true.

An example of a common heuristic is to assume that past investment performance indicates future returns. Although that seems to make sense on the surface, it doesn’t take into account changes in the economy, or how fully valued a stock has become. An investor might assume that because an emerging markets equity mutual fund has posted positive returns for the past five years, a sensible decision would be to maintain or increase the position in the fund. However, it is possible that the mutual fund has undergone a turnover in management, or oil prices have risen which affects shipping costs to these markets, for example. A mental shortcut in investment analysis can have an adverse effect on a portfolio.

Another example is seeing a “sale price” and assuming that it’s a good deal because it’s below the normal price. Sometimes it is a good deal, but other times it isn’t. This heuristic is based on the tendency to believe a reference point is real because of how it is reported. In this case, it’s the price a tag says is the normal price. Making a purchase decision based on an inaccurate reference number can result in negative financial consequences. 

Fortunately, when people become aware of errors caused by heuristics, they can adjust their decision-making processes. Not only that, but they can also learn which heuristics are reliable. In finance, some heuristics, such as the 10% savings rule, the 70% replacement ratio in retirement rule, and the ‘“cost-per-use” strategy to make purchasing decisions are effective.

Understanding Behavioral Finance Biases

When economic and financial heuristics lead to inaccurate judgments and beliefs, the result is cognitive biases. The most common cognitive biases include:

• Self-attribution bias: Believing that good investment outcomes are the result of skill, and undesirable results are caused by bad luck.

• Confirmation bias: Paying close attention to information that confirms a finance or investment belief and ignoring any information that contradicts it.

• Representative bias: Believing that two things or events are more closely correlated than they really are.

• Framing bias: Reacting to a particular finance opportunity based on how it is presented.

• Anchoring bias: Letting the first price or number encountered unduly influence your opinion.

• Loss aversion: Trying to avoid a loss more than on recognizing investment gains, so that desirable investment or finance opportunities are missed.

These biases and the heuristics that helped create them affect investor behavior, market and trading psychology, cognitive errors, and emotional reasoning.

Investor Behavior

Overconfidence, excessive optimism, self-attribution bias, framing bias, and loss aversion often lead investors astray. All of these factors lead to irrational rather than well-considered investments.

Trading Psychology

Trading psychology refers to the mental state and emotions of a trader that determines the success or failure of a trade. Assumption heuristics, such as making a decision based on one positive result, anchoring bias, loss aversion, and confirmation bias can yield less than desirable investment or financial outcomes.

Market Psychology

Human economic and financial heuristics and biases affect economic markets, the odd mix of collective and independent decisions of millions of people, acting for themselves and on behalf of funds or companies. As a result, many markets are not successful for many years. Understanding what causes the anomalies in valuations of individual securities and the stock market can result in better market performance.

Cognitive Errors

Suboptimal financial decision-making is the result of cognitive errors, many of which are made because of heuristics and anchoring, self-attribution, and framing biases. Exploring neuroscience discoveries and the implications for financial decision-making under uncertainty can result in sounder strategies for client debiasing and financial management.

Emotional Reasoning

Many investors believe that their heuristics and biases are examples of sound, scientific reasoning and therefore should be used for investment decisions. They are surprised to learn that they are emotional, not logical.

Read more about the role that understanding emotional intelligence plays in behavioral finance.

Behavioral Finance is a Growing Field

Behavioral finance is now being implemented in financial advisor business models and client engagement practices. For financial analysts, asset managers and the investment process itself, behavioral finance is also growing in importance as the basis of an investment methodology. It is now possible to earn a behavioral finance designation. It’s something to consider if you want to understand the markets or excel as a financial advisor.

Interested in learning more about behavioral finance and financial planning? 

Explore the Accredited Behavioral Finance Professional program through the College of Financial Planning.

The Chartered Retirement Plans Specialist^SM (CRPS^®) designation enables financial advisors and other professionals to demonstrate their expertise in administering retirement plans for businesses and wholesale clients. It is offered exclusively by the College for Financial Planning^®—a Kaplan Company (CFFP). This article explains the designation, how it differs from the CRPC^® mark, and the curriculum to help you decide if it's a good fit for your career.

About the CRPS^® Designation

As retirement plan options evolve and tax complexity increases, many companies seek professional plan administrators to design, install, and maintain their company retirement plans. Firms, non-profits, and government organizations of all sizes recognize the unique skills needed to implement and oversee these internal retirement plans. The CRPS^® designation demonstrates that you have those skills.

The CRPS^® program addresses topics such as the types and characteristics of retirement plans, IRAs, SEP, SIMPLE, 401(k), and defined benefit plans. It also includes coursework that covers non-profit and government plans, qualified and IRA distributions, plan design, installation, and administration, and fiduciary issues.

How Does the CRPS^® Differ from the CRPC^®?

Candidates in the CRPS^® program focus on retirement planning for employees and management in for-profit companies and public sector organizations. By contrast, the CRPC^® designation is the industry benchmark for individual retirement planning. The CRPC^® program guides candidates through specialized tax and estate objectives and strategies for a retiree and presents the financial and emotional aspects of financial planning that are unique to the retirement process for individuals.

The CRPS^® Curriculum

The CRPS^® curriculum consists of these seven modules:

• Introduction to the Employee Retirement Income Security Act of 1974 (ERISA) and the Fiduciary Standard Employer-Funded Defined Contribution Plans
• Participant-Directed Retirement Plans
• Retirement Plan Solutions for Small Business Owners
• Retirement Plan Selection, Design, and Implementation
• Administering ERISA-Compliant Plans Working with Participants

Students must complete the CRPS^® program in 120 days, and there is a final exam. The final exam contains 80 questions, and the passing score is 70 percent.

The Benefits of the CRPS^® Designation

The CRPS^® mark can set you apart from other advisors because it demonstrates you have the knowledge and expertise to recommend implementation techniques that can be executed into well-structured, company-appropriate retirement plans. Businesses, non-profits, and government organizations will recognize that you can effectively administer wholesale retirement plans for their employees and management.

Earning the designation is also a sound financial decision. Advisors can expect an average of a 20 percent pay increase after earning the designation. Plus, it can help with your future education plans. CRPS^® designees receive credit for an elective in the CFFP MS Degree in Personal Financial program. This allows you to save both time and money while pursuing multiple credentials.

Considering the CRPS^® Designation?

The CRPS® designation is well-suited for:

• Experienced advisors who desire financial planning credentials to advance their careers
• Finance professionals who would like to specialize in wholesale-based retirement plans rather than planning for individuals
• Advisors who would like to get a designation to boost their retirement planning skills that also gives them a headstart on earning the CFP^® certification or a Master of Science degree

To learn more about how to earn a retirement planning designation endorsed by the top financial firms, visit the CRPS^® web page.

The FINRA Series 10 license, known as the General Securities Sales Supervisor Exam—General License is one of two licenses that you must hold if you want to oversee sales activities at a broker-dealer firm. The other license is Series 9. With a Series 10, you can supervise the opening and maintenance of customer accounts and oversee the practices of salespeople and traders. To get your Series 10 license, follow the steps in this article.

Step 1: Pass the SIE exam.

Anyone who wants to earn the Series 10 (and Series 9) must first earn a Series 7 license. To earn the Series 7, you must pass the SIE exam. The SIE tests topics such as securities fundamentals, regulatory agencies, product knowledge, and acceptable and unacceptable practices. You do not have to be sponsored by a firm to take the SIE exam, and you can take it while you are still in school.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from over 100 securities professionals.

Step 2: Find a sponsor.

To earn the Series 7 and the Series 10 licenses, you must be sponsored by a FINRA member firm or a self-regulatory organization (SRO). Firms apply for candidates to take the Series 7 and 10 exams by filing a Uniform Application for Security Industry Registration or Transfer (Form U4). There is also an exam fee that is commonly covered by the sponsoring firm.

Step 3: Pass the Series 7 exam.

Once you pass the SIE exam and secure your sponsorship, you must pass the Series 7 top-off exam. The exam has 125 multiple-choice questions, and each question has four answer choices. The topics include investment risk, taxation, equity and debt instruments, packaged securities, options, retirement plans, and interactions with clients. Also tested is your knowledge related to the daily activities, responsibilities, and job functions of general securities representatives.

The test time is 3 hours and 45 minutes, and the passing score is 72 percent and above.

Step 4: Pass the Series 10 exam.

The Series 10 exam tests your knowledge of securities rules and regulations in preparing for supervising the sales activities in securities firms. It covers hiring, supervising accounts, regulation, and more. By contrast, Series 9 covers a similar but narrower range of topics and requirements with a focus on options.

The Series 10 exam has 145 multiple-choice questions, and you’re allotted four hours to take it. It focuses on these functions of the general supervisor role:

• Hiring, Qualifications, and Continuing Education
• Supervision of Accounts and Sales Activities
• Conduct of Associated Persons
• Recordkeeping Requirements
• Municipal Securities Regulation

The passing score is 70 percent.

Step 5: Register your license.

After you pass your licensing exam, you’ll have to register your Series 10 license with FINRA and an approved broker-dealer who will hold your license and oversee your business for a portion of the commission income. If you haven’t already, you’ll need to take and pass the Series 9 exam and earn that license.

How to Get Started

Series 10 licensing exam prep can give you the edge you need to pass. Visit our website to learn more about our live and online study options and to purchase a Series 9/10 exam prep package.

The FINRA Series 9 license, known as the General Securities Sales Supervisor—Options License, is one of two licenses that you must hold if you want to oversee sales activities at a broker-dealer firm. The other license is Series 10. With a Series 9, you can supervise the opening and maintenance of customer options accounts and oversee the practices of options salespeople and traders. To get your Series 9 license, follow the steps in this article.

Step 1: Take and pass the SIE exam.

The SIE exam tests common topics such as fundamentals, regulatory agencies and their functions, product knowledge, and acceptable and unacceptable practices. You can take the SIE exam before being sponsored by a firm and even while you are still in school. You have a four-year window in which to take and pass any of the representative level top-off exams, like Series 6 and Series 7, after passing the SIE exam.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from over 100 securities professionals.

Step 2: Secure a sponsorship.

The Series 7 license is a requirement for earning the Series 9. To earn both, you must be sponsored by a FINRA member firm or a self-regulatory organization (SRO). Firms apply for candidates to take the Series 7 and 9 exams by filing a Uniform Application for Security Industry Registration or Transfer (Form U4). There is also an exam fee that is commonly covered by the sponsoring firm.

Step 3: Take and pass the Series 7 exam.

Once you pass the SIE exam and secure your sponsorship, you must take the top-off exam for the Series 7 license. The exam has 125 multiple-choice questions, and each question has four answer choices. The topics include investment risk, taxation, equity and debt instruments, packaged securities, options, retirement plans, and interactions with clients. It also tests your knowledge related to the daily activities, responsibilities, and job functions of general securities representatives.

The test time is 3 hours and 45 minutes, and the passing score is 72 percent and above.

Step 4: Take and pass the Series 9 exam.

The Series 9 exam tests your knowledge of securities rules and regulations in preparing for supervising the sales activities in corporate, municipal, and options securities. It covers options sales and trading, as well as regulation and administration. Series 10 goes deeper, covering a similar but broader range of topics and requirements.

The Series 9 exam has 55 multiple-choice questions, and you’re allotted 1 ½ hours to take it. It focuses on four functions of the general supervisor role:

• Function 1: Supervise the Opening and Maintenance of Customer Options Accounts
• Function 2: Supervise Sales Practices and General Options Trading
• Function 3: Supervise Options Communications
• Function 4: Supervise Associated Persons and Personnel Management Activities

The passing score is 70 percent.

Step 5: Register your license.

After you pass your licensing exam, you’ll have to register your Series 9 license with FINRA and an approved broker-dealer who will hold your license and oversee your business for a portion of the commission income. If you haven’t already, you’ll need to take and pass the Series 10 exam and earn that license.

How to Get Started

Series 9 licensing exam prep can give you the edge you need to pass. Visit our website to learn more about our live and online study options and to purchase a Series 9/10 exam prep package.

All CFP^® professionals must agree to abide by a code of ethics and standards of professional conduct that center on protecting clients and complying with employer policies. In 2019, CFP Board enacted a new code and standards, which it will begin enforcing on June 30, 2020. Those who violate the code and standards are subject to discipline. This article shares some examples of violations and disciplinary actions.

CFP Board Code of Ethics and Standards of Professional Conduct: What Are They?

CFP Board’s Code of Ethics and Standards of Professional Conduct require CFP^® professionals to put the interests of their clients above their own in all circumstances and not just when acting as their financial advisors. In addition, they must act with integrity, respect, and professional competence. Serious disciplinary actions are taken against anyone who violates the code and standards. For industry-related violations, CFP Board maintains an anonymous list of professionals who have been disciplined with revocation of the certification, suspension of up to five years, a public letter of admonition, or private censure.

Some violations are easy to understand and remember. Anyone convicted of theft, embezzlement, a violent crime, murder or rape, tax fraud or other tax-related crimes will face permanent revocation of the CFP^® mark. Other criminal or felony charges can result in a suspension. Anyone who files for bankruptcy is likely to be disciplined with a suspension or revocation of the mark. And, those who violate the standards but are not convicted of a crime will receive either a suspension, a public letter of admonition, or private censure. Here are examples of some of the other actions and activities that violate the code of ethics and professional standards of conduct.

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Employer Policy Violations

CFP^® professionals are required by the code and standards to follow their employers’ rules and policies, yet the majority of CFP Board ethics and standards violations are for not doing that. The discipline for this violation is most likely to be a suspension. For example, a professional received a suspension for obtaining reimbursement from his firm for computer equipment he purchased but then returned or cancelled, encouraging other employees to follow suit, and lying to firm investigators about it. Another professional was suspended for failing to properly supervise an individual’s sale of complex products and unsuitable Class A mutual fund shares.

There has been at least one case where the professional had their CFP^® certification revoked for improper employee conduct. The professional had participated in at least three separate outside business activities without informing his employer, loaned money to three clients, and presented a private securities transaction to clients that resulted in eight of them investing in the transaction. He then completed an employer questionnaire stating that he was not participating in any outside business activities that required disclosure and that he had not participated in any private securities transactions.

Misrepresentation

The second most common violation of CFP’s code of ethics and standards of conduct is misrepresentation; there are 92 examples of it in CFP Board’s list of disciplined professionals. The term covers a broad range of improper and illegal behavior. The most common are claiming to only offer fee-based services when that is not the case and informing CFP board that required continuing education has been completed when, in reality, it has not. Those who falsely claim to be fee-based advisors usually receive letters of admonition, but lying about continuing education results in suspension.

A more unusual example is the suspension of one CFP^® professional who:

• Used unreasonable assumptions that resulted in large overstatements of fund investment values to investors
• Falsely claimed in MD&As (management discussion and analyses) sent to fund investors that a fund’s principal investment relationship with a foreign company was a partnership
• Disclosed to clients and prospective clients that he had obtained a letter of intent to invest from a large development bank when this was not true

Failure to Exercise Fiduciary Duty

For a CFP^® professional, fiduciary duty means putting the interests of your clients above your own at all times. Discipline for those who do not act in a client’s best interest is either suspension or a letter of admonition. For example, a financial advisor received a letter of admonition for charging clients an unreasonable investment fee and failing to disclose the risks involved with Real Estate Investment Trusts.

Another CFP® professional was suspended for directing his clients to sign incomplete and blank forms, including account registration forms, transfer forms, and annuity application forms. None of these included written disclosure of information such as fees, sales charges, or surrender charges. And, finally, another financial advisor was issued a letter of admonition for not exercising his fiduciary duties. Among his long list of transgressions was the fact that he lied to clients and prospective clients, telling them that all advisors who earn commissions make recommendations based on their own personal enrichment, fail to disclose all relevant facts, and do not act in the client’s best interest.

Misconduct

Misconduct is most likely to result in suspension. In one case, a professional was suspended when he took approximately $19,000 from a Scholarship Fund during the period of 2005 to 2012 and used a significant portion of that money for his personal benefit. In 2018, another professional was suspended for convincing her client, who was also her mother, to transfer assets to her, which was not acting in her mother’s best interest. Another example is a professional who was suspended after making material misstatements and omissions to his clients while recommending that the clients invest in what was found to be a Ponzi scheme.

CFP^® Exam Violations

CFP Board also disciplines individuals who have not earned the mark for exam violations and misconduct. For example, CFP Board imposed a two-year delay on any validation of one candidate’s prior passing score after he posted a summary of contents of the CFP® exam on a Reddit message board. Another candidate was barred from taking the exam for two years when he removed a sheet of scratch paper from the scratch booklet, concealed it, and then left the testing center with it. When asked to return the paper, he denied that he had it.

Increase Your Odds of Complying with CFP Board’s Code of Ethics and Standards of Professional Conduct

Understanding the CFP Board code and standards is critical to earning and keeping your CFP® mark. Our education packages can help you get up to speed on all the rules, so you are not surprised on exam day or in your future career.

The questions most frequently asked about the Series 63 exam—such as exam difficulty, passing score, pass rates, questions, and topics—are answered in this article. Read on to get all the information you need to understand what the license is for and decide if you have to take the exam.

What is the Series 63 License? How long is it good for?

The Series 63 license, also known as the Uniform Securities Agent license, enables you to sell securities in a particular state. If you have a Series 6 or a Series 7 license, and you want to sell securities in the state where you live, work, or plan to work, you must also have a Series 63 license—except in Colorado, Florida, Louisiana, Maryland, the District of Columbia, and Puerto Rico. None of these requires the Series 63.

The Series 63 license is good for the entire period that you work for a FINRA-member firm or self-regulatory organization (SRO). It only expires if you are terminated or leave a firm and do not find employment within two years at another FINRA-member firm or SRO.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

What is the difference between the Series 6, Series 7, and Series 63 licenses?

If you hold a Series 6 license, you’re called a limited representative, and you are entitled to sell mutual funds, variable annuities, and insurance premiums in Colorado, Florida, Louisiana, Maryland, the District of Columbia, and Puerto Rico. If you’ve earned the Series 7 license, you’re called a registered representative, and you’re permitted to sell corporate stocks and bonds, municipal bonds, mutual funds, variable annuities, options, direct participation program partnerships, and collateralized mortgage obligations in the same states as Series 6. For all other states, you cannot sell any of these assets until you earn your Series 63 license, along with the Series 6, Series 7, or both.

What is the difference between the Series 63, 65, and 66 licenses?

The Series 63, Uniform Securities Agent, is a license for broker-dealer representatives. The Series 65 license, Uniform Investment Adviser, is for investment adviser representatives, which is anyone who works for an investment advisory company and provides investment-related advice for a fee. Holders of the Series 66 license are treated as if they earned both the Series 63 and Series 65 licenses. However, you cannot earn the Series 66 if you do not have a Series 7 license.

What jobs can I get with a Series 63 license?

If you have earned the Series 6 license and the Series 63 license, you can be a financial adviser or insurance agent who also sells mutual funds and works at a brokerage, investment firm, bank, or insurance company. If you have earned the Series 7 license, you can have a career as a stockbroker at a brokerage, investment firm, or bank.

How do I earn a Series 63 license?

Although you can earn the Series 63 license without sponsorship or any prerequisites, we suggest you approach the process in the following order:

1. Take and pass the SIE exam.
2. Secure a sponsorship from a FINRA-member firm, and register for the Series 7 exam,Series 6 exam, or both.
3. Study for and pass the Series 7 exam, Series 6 exam, or both.
4. Register for the Series 63 exam.
5. Study for and pass the Series 63 exam.

What is the Series 63 exam? Why should I take it?

The Series 63, Uniform Securities Agent State Law Examination, is the state law test for broker-dealer representatives. It is a North American Securities Administrators Association (NASAA) exam administered by FINRA. You should take the exam if you have a Series 6 license, Series 7 license, or both, and do not live or work in Colorado, Florida, Louisiana, Maryland, the District of Columbia, and Puerto Rico. Outside of those states, you cannot sell securities without passing the Series 63 exam.

What are the requirements to sit for the Series 63 exam? Do I need a sponsor?

To take the Series 63 exam, you do not need a FINRA-member firm or SRO to sponsor you. You can use a Form U10 (Uniform Examination Request for non-FINRA candidates) to register. However, if you have worked for a FINRA-member firm for four months or more, they can file a Form U4 (Uniform Application for Securities Industry Registration) on your behalf.

There are no education requirements to sit for the Series 63 exam, although most candidates have a college degree in a finance-related field, and many choose to complete a Series 63 exam prep package prior to sitting for the exam.

Is the Series 63 exam paper or computer-based?

Like all other securities qualification exams, the Series 63 exam is administered by computer at a Prometric testing center.

What topics are covered on the exam?

The Series 63 exam covers two major topic areas:

• State Securities Acts and related rules and regulations, as well as remedies and administrative provisions
• Ethical practices and fiduciary obligations, including communication with customers and prospects

How many questions are on the exam?

The Series 63 exam consists of 60 multiple-choice questions. There are 36 questions about state securities acts and their related rules and regulations (60 percent) and 24 questions about ethical practices and fiduciary obligations (40 percent).

How much time does it take to study for the Series 63 exam?

Most candidates spend 30–40 hours studying for the FINRA Series 63. Best practices suggest that you spread those hours over about 10 days.

How hard is the Series 63 exam?

Expect the Series 63 to be challenging, mainly because of the short amount of time you have to complete the questions. You only have 75 minutes, so if you spend more than a minute and 15 seconds on each question, you can fall behind quickly. If you know the material and haven’t crammed, you have a good chance of passing.

How much does it cost to sit for the exam?

The exam cost is $147.

What is the passing score for the exam?

The passing score for the exam is 72 percent. 

What is the pass rate for the exam?

Because the Series 63 is a state exam, questions on the exam vary, and statistics are hard to capture. Therefore, no official pass or fail rate has been recorded. In 2014, the Wall Street Journal did a survey of 370,000 brokers and found that 86 percent passed on their first try. However, the exam changed significantly in 2016 and again in 2023 albeit slightly, so that percentage might not be accurate by today’s standards.

If I fail the Series 63 exam, what is the wait time before I can retake it?

Candidates who do not pass the exam must wait 30 days before taking it again. However, if you fail it three times in succession, you must wait 180 days.

Ready to earn your Series 63 license?

We hope this article answers all of your questions about the Series 63 exam and license. If you’re interested in taking the exam, check out our Series 63 exam preparation packages.

Accredited Asset Management Specialist (AAMS^®) is a professional designation designed for those starting out in the financial advice business that is awarded by the College for Financial Planning (CFFP)—a Kaplan company. Earning the designation also enables experienced advisors to learn more about asset management and improve their credentials. This article explains what the designation is, why it’s valuable, how it can help you in your career, and how to get it.

What Is AAMS^®?

AAMS^® is a designation program for financial professionals. The program provides advisors with fundamental financial knowledge of asset management and investments. It was started in 1994 and is offered exclusively online by CFFP. The designation is also listed by FINRA, which is a private, self-regulatory organization that regulates certain aspects of the securities industry.

Why the AAMS^® Program Is Valuable

When asked about the value of the program, one AAMS® professional said: “This program gave me more knowledge to help structure my communication with my clients. The AAMS^® program should be a requirement for anyone involved in asset allocation and money management."

The courses and tests associated with earning the AAMS^® designation teach advisors how to evaluate assets and make recommendations. Those who go through the program learn to identify new investment opportunities and also recognize insurance, tax, retirement, and estate issues.

The program is designed to help financial advisors who are just starting out in their careers. However, more experienced financial advisors can benefit from the credential, too, because it lets clients know they have a specialty in asset management. In addition, financial advisors with the AAMS^® designation who plan to earn the CFP^® designation receive credit for the completion of course FP511 General Financial Planning Principles, Professional Conduct, and Client Psychology in the College's CFP^® certification education program.

How the AAMS^® Designation Can Help Your Career

The AAMS^® designation is recognized as the industry benchmark for asset management credentials and is endorsed by leading financial firms. It enables you to serve individual, small business, or investment clients better. If you have an entry-level financial advice position or are a trainee, it can help you advance your financial career. In addition, financial planning professionals working in a financial planning role both the year before and year after receiving their most recent specialized professional designation such as the AAMS^® designation reported an average 16% earnings increase in the year after earning that professional designation, as well as client base growth and greater job satisfaction.

For clients, the AAMS^® is a sign that you can identify investment opportunities specific to their needs. For example, it can reassure nervous clients who need to plan for college tuition or purchase a retirement home. Because you’ve been through the program and earned the AAMS^® designation, you can guide those clients and others to the right investments for their goals.

How to Earn the AAMS^®

To earn the AAMS® designation, follow these steps:

1. Complete a 10-module education program provided by CFFP. There are no prerequisites for this program. Students have 120 days from the date they are provided online access to complete a designation program (including testing and passing the Final Exam). The modules cover the asset management process; risk, return, and investment performance; asset allocation and selection; investment strategies; taxation of investments; investing for retirement; deferred compensation and benefit plans; insurance products for investment clients; estate planning for investment clients; and fiduciary, regulatory, and ethical issues for advisors.
2. Take and pass the AAMS^® exam. You must test and pass the final exam within the 120 days of your online access. There are 80 questions on the exam, and the passing score is 70 percent. Plan on studying for about 80–100 hours.
3. Agree to abide by a code of ethics.

Think the AAMS^® Designation Is Right for You?

If you’re just starting out in your career, the AAMS^® offers you a chance to build your credentials. If you’re experienced and want to earn your CFP^® mark, the AAMS® program gives you a head start, plus you get a credential in the process. Learn more about the AAMS^® designation program and how to enroll.

The CRPC^® designation is the end result of a comprehensive program that helps financial advisors master the entire retirement planning process, going far beyond retirement income. With financial decisions that will determine their security and lifestyle for the balance of their lives, people born in the early 1960s are demanding a high level of knowledge from their advisors. This program is designed to help retirement planning counselors to meet these demands. This article provides an overview of the program.

Why the CRPC^® Designation?

The youngest of the “baby boomer” generation, people born in 1964, are now solidly into their mid-50s, so retirement is weighing heavily on their minds. In fact, in a recent national survey of financial advisors, the College for Financial Planning®—a Kaplan Company found that more than three-quarters of their clients are “concerned” or “very concerned” about their retirement savings programs, and well over half worry about actually outliving their assets.

So, it’s not at all surprising that financial advisors are facing an increasingly complex onslaught of retirement planning questions as these baby boomers look for advice on when they’ll be able to retire, as well as guidance in finding investments to meet their lifestyle needs in 10 years, 20 years, or beyond.

Recognizing these challenges, the College for Financial Planning®—a Kaplan Company has created the Chartered Retirement Planning Counselor™ (CRPC^®) education and designation program.

What is the Chartered Retirement Planning Counselor^™ (CRPC^®) Designation?

The CRPC^® helps financial advisors by guiding them through specialized tax and estate objectives and strategies for a retiree and presents the unique financial and emotional aspects of financial planning that are unique to the retirement process. In short, the program helps advisors define a “road map to retirement,” enabling them to focus on the pre- and post-retirement needs of their clients.

The CRPC^® designation is the industry benchmark for retirement planning credentials and is encouraged by the top firms in the industry.

According to a recent College for Financial Planning report, CRPC^® professionals surveyed working in a financial planning role both the year before and the year after earning their CRPC^® designation reported an average 10% earnings increase in the year after earning that designation

About the CRPC^® Designation Course

The CRPC^® Professional Education Program is a three-semester credit graduate-level course. The nine modules in the course are:

• Maximizing the Client Experience During the Retirement Planning Process
• Principles and Strategies When Investing for Retirement
• Understanding Social Security, Military and Government Retirement Benefits
• Bridging the Income Gap: Identifying Other Sources of Retirement Income
• Navigating Health Care Options in Retirement
• Making the Emotional and Financial Transition to Retirement
• Designing Optimal Retirement Income Streams
• Achieving Tax and Estate Planning Objectives in Retirement
• Fiduciary, Ethical, and Regulatory Issues for Advisers

The typical student should expect to spend approximately 90–135 hours on course-related activities to study and prepare adequately for the course examination. The CRPC^® course also does double-duty for professionals who are considering a master’s degree: designees receive direct credit for one course in the CFFP MS in Personal Financial Planning program, saving them time and money while enabling them to pursue multiple credentials.

Learn More

Many leading financial advisory firms endorse the CRPC^® designation and will reimburse advisors for course-related expenses. For more information, visit the College’s website.

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* Earnings increases are dependent on numerous factors other than, or in addition to, completion of the specialized financial designation, including specific employment conditions and individual experience. The College for Financial Planning^®—a Kaplan Company does not guarantee any earnings increase resulting directly from such designation. Results are the findings of a quantitative survey conducted by the College for Financial Planning between June 27 and August 7, 2023. For this survey, a sample of 951 2022 and 2023 graduates of the College for Financial Planning was interviewed online in English. This earnings increase was based on 104 graduates whose most recent designation was the CRPC^® designation and who were employed in a financial planning role both the year before and the year after receiving the CRPC^® designation.

If you’re in the financial or money business, you may want to skip this article. If, however, you are in the people business, this article will be of value to you. It is important to consciously recognize whether your primary value-add is offering all the tools for your clients or mastering relationships with your clients. They’re both important for a successful client experience, but the tools are table stakes. Mastering client relationships is where you can differentiate your business from the rest and provide invaluable service that will maintain life-long clients.

This article offers 3 main ways to add value to your client relationships, starting with always being on the hunt for different and authentic avenues to do so. Here are 3 tips.

1. Learn who is important in your client’s lives and show up to support them.

For example, your clients may be family-oriented. If they are excited about their children’s or grandchildren’s activities, you may want to ask if you can attend an upcoming event. Your clients likely want to have people they respect to show up and see their children succeed. If a child is a great musician, attend a recital or see the band. If the client has a son or daughter who is an athlete, go to watch a game. At graduation, make sure you’re in the crowd for the ceremony—and so on. Being present in different aspects of your clients’ lives builds a trust that shows you care about them.

Recently, I advised an advisor to ask his most important client for his daughter's upcoming high school basketball schedule. When the client asked why, he responded with, “You have told me so much about her college recruiting process that I wanted to see one of her games.” The client was thrilled and couldn’t wait to see the next game with the advisor. The impact of your presence will add value not only in your client relationship but also in the relationship between you and the children.

2. Understand your clients’ passions, and collect news about their interests.

Recently, an advisor mentioned that when he flies, he brings along a supply of magazines. On the flight, he peruses them for things that are of interest to his clients. Afterward, he may have a stack of 5 to 10 items that he can send to certain clients with a note that says, “I was on a flight recently and came across this article. I’m not sure if you saw this yet. Hope you enjoy.”

Imagine what clients must think when they receive something like that. How would you feel if you knew someone was thinking about you on their vacation or business trip? A gesture such as this shows your clients that you listen to what they say, and you are invested enough to go out of your way to show them.

3. Switch roles—ask for their opinion.

This is a great way to add value to relationships. If you called a client and asked them to lend an opinion to help you make a decision—personal or professional—they might feel more valued in your relationship. After all, your clients seek your advice, but how often do you seek advice from them? When advice and counsel go both ways, that’s a true hallmark of a great relationship.

Building a strong foundation

There are probably hundreds of ways to add value in relationships. Make sure you build a strong foundation of systems and tools for your business, so you can focus on being in the people business and dedicate your time to mastering relationships. It’s the future of our role. I would love to hear back from you on ways you are adding value that might be considered out of the norm.

About the author

Steven J. Atkinson, CFS is Managing Director, Advisor Relations for Loring Ward. Loring Ward is a comprehensive business partner for registered investment advisors.

In a line made famous by Juliet in the William Shakespeare play, Romeo and Juliet, she says "A rose by any other name would smell as sweet." The phrase is commonly used today to suggest that the name given to something does not necessarily describe its meaning. In the case of a rose, there is a specific definition relating to a thorny bush coming from the Latin word, Rosa. So, call it a rock, call it a car, or call it whatever you want. It is still a rose. 

What if a securities professional uses the term financial advisor? What does that mean to you? Unfortunately, unlike the rose, there is no legal definition for that term, and, to quote Mr. Shakespeare again (this time from Hamlet), “Aye, that’s the rub.” Because anyone can call himself a financial advisor, confusion reigns in the financial industry, and the SEC has finally taken steps to attempt to address that issue.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

Similar to the rose, there is a legal term, investment adviser, found in the federal Investment Advisers Act of 1940 and the state law, the Uniform Securities Act. These persons are held to a fiduciary standard and are defined as an investment adviser by meeting a 3-prong test:

1. The person gives advice on securities
2. The advice is given as part of a regular business
3. The person receives compensation for the advice

Furthermore, under both federal and state law, excluded from the definition of an investment adviser are broker-dealers if their performance of advisory services is solely incidental to the conduct of their business as a broker-dealer, and they do not receive any special compensation for their advisory services. But, what happens when broker-dealers and their salespersons call themselves financial advisors?

Historically, the stock brokerage industry has used many terms to describe those individuals who are involved in securities sales for broker-dealers. Legally, the term is registered representative (or agent under state law), but the most common term was stockbroker. Euphemisms abound because firms wanted their salespersons to sound like something other than a stock pusher. In the November 19, 1927, issue of The New Yorker magazine, the term customer’s man was used (there were few if any women registered at that time). Later on, they became account executives and, most recently, financial advisors.

In 2006, the Securities and Exchange Commission (SEC) commissioned The RAND Corporation, a major think tank, to conduct a study focused on two questions:

• What are the current business practices of broker-dealers and investment advisers?
• Do investors understand the differences between broker-dealers and investment advisers?

As RAND reported, “The study confirmed that the industry is becoming increasingly complex, firms are becoming more heterogeneous and intertwined, and investors do not have a clear understanding of the different functions and fiduciary responsibilities of financial professionals.”

Of significant importance were the responses to the second question. About two-thirds of the respondents were classified as “experienced” investors, meaning that they had investments outside of retirement plans and/or formal training in finance or investments. Yet, even with that background, when presented with a list of services and obligations and then being asked to indicate which items applied to investment advisers, brokers, and financial advisors, their responses showed that financial advisors were viewed more similarly to investment advisers than brokers.

They attributed part of their confusion to the dozens of titles used in the field, including generic titles, such as financial advisor and financial consultant. Another study, “the 913 study,” was mandated by Section 913 of the Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), and the findings echoed those of the RAND study. Specifically, “Many retail investors and investor advocates submitted comments stating that retail investors do not understand the differences between investment advisers and broker-dealers or the standards of care applicable to broker-dealers and investment advisers. Many find the standards of care confusing, and are uncertain about the meaning of the various titles and designations used by investment advisers and broker-dealers.”

Finally, in April 2018, the SEC released a proposal to limit the use of the terms advisor and adviser. The proposal stated:

We agree that it is important to ensure that retail investors receive the information they need to understand the services, fees, conflicts, and disciplinary history of firms and financial professionals they are considering. Likewise, we believe that we should reduce the risk that retail investors could be confused or misled about the financial services they will receive as a result of the titles that firms and financial professionals use, and mitigate potential harm to investors as a result of that confusion. We are proposing rules that would (i) restrict the use of the terms ‘adviser’ and ‘advisor’ by broker-dealers and their associated financial professionals, and (ii) require broker-dealers and investment advisers to disclose in retail investor communications the firm’s registration status while also requiring their associated financial professionals to disclose their association with such firm. Specifically, we believe that certain names or titles used by broker-dealers, including ‘financial advisor,’ contribute to retail investor confusion about the distinction among different firms and investment professionals, and thus could mislead retail investors into believing that they are engaging with an investment adviser–and are receiving services commonly provided by an investment adviser and subject to an adviser’s fiduciary duty, which applies to the retail investors’ entire relationship–when they are not.

The proposal would restrict any broker-dealer and any individual associated with the broker-dealer from using, as part of its name or title, the words adviser or advisor unless the broker-dealer is registered as an investment adviser under the Advisers Act or with a state, or any individual who is an associated person of such broker or dealer is properly registered as an investment adviser representative.The effect of the proposal would restrict the ability of a broker-dealer (unless also registered as an investment adviser) to use the term adviser or advisor in any manner such as financial advisor/adviser, wealth advisor/adviser, trusted advisor/adviser, and advisory (e.g., “XYZ Firm Advisory”) when communicating with any retail investor.

What final form the rule will take is not clear, but what is clear is that, at least for broker-dealers and their reps, you won’t be able to call yourself a rose if you are not one.

If you’ve been working in the advisory business for some time, you might be wondering what the future of the industry could look like. Unfortunately, it probably won’t look like you. But that doesn’t mean you can’t serve the next generation of wealth successfully. After all, the opportunity is huge. The Millennial generation has officially surpassed Baby Boomers in terms of size. Also, and this isn’t the first time you’ve heard it, they are poised to inherit close to 30 trillion dollars over the next 30 years. Like I said, a huge opportunity!

At Stash Wealth, we cater exclusively to Millennials, and they’ve taught us a lot about what they are attracted to when it comes to choosing a financial advisor. Here are a few reasons why Millennials don’t work with you.

1. You Wear A Suit

Millennials don’t trust suits. Crazy, but true. At Stash, we agree that a few bad eggs (wearing suits) ruined it for all of us. Thanks to 2008/2009, Wall Street has officially lost the trust of the Millennial generation. Yes, we are regaining it slowly, but there’s a very unflattering stereotype embedded in everyone’s minds. And movies like The Big Short and Too Big To Fail haven’t helped. Even if you aren’t the stereotype, your suit and tie gives you away. If you don’t wear a suit and tie, you’re one step ahead….seriously. Perception is reality. If you look like a suit, you are a suit....so switch it up.

2. You Speak A Foreign Language

Imagine if your doctor told you your ice cream headache was Sphenopalatine ganglioneuralgia. Drop the jargon. Millennials don’t want to be talked down to. And they definitely don’t want to feel stupid. If you continue to use words like “diversification” and “tax-loss harvesting,” it’s likely that your efforts to educate and empower them will fall on deaf ears. Even if your heart’s in the right place, you need to get smart about how you communicate. Millennials trust clear communicators, not intimidating words and fancy mahogany offices.

3. You Think Your Firm Builds Your Credibility

If a client chooses to work with an individual over a robo-advisor, a common choice for Millennials, it’s likely that they value relationships just as much as technology. Most older advisors I know believe that their firm’s brand is what drives clients to them. Quite frankly, it’s a crutch and a dangerous one. If you work at a firm with hundreds of other advisors, you need to get clear on why Millennial clients should pick you. Advisors who can articulate their value prop beyond the firm’s mission have something real to stand on—something that extends beyond the name of the firm. Why are you unique? Stop falling back on the assumed credibility of your firm and figure out what your advantage is.

A final thought. If you’re in the middle of your career, there’s still time to incorporate a new target market into your strategy. Frankly, you’ll be able to capitalize on the fact that your colleagues probably haven’t seen the light yet. If they are still chasing wealth instead of wealth potential, that’s a good thing for you.
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You know who Millennials trust? Other Millennials. So, if you're a Millennial who is interested in helping other Millennials, consider becoming a financial advisor or earning your CFP® certification. Learn more here.

Feedback: for most of us, this gift isn’t our first choice to receive. The term, whether we call it feedback, input, constructive criticism, or collaboration, resonates with most of us as a negative instead of positive. I soundly think that an individual’s ability to appropriately respond to and incorporate feedback makes or breaks leaders.

There are two sides to the “feedback gifting” equation: giving and receiving. In today’s workplace, the ability to refine both skills is critical to leading well. Feedback is an artform. Most people would prefer to opt out of participating because frankly, it takes some serious effort to articulate feedback in a constructive way. It is even more challenging to receive it in a wise way.

Below are my top 3 tips for both giving and receiving feedback in a way that promotes leading well.

How to Effectively Give Feedback   

1. Be selective. Make sure it’s observed as a trend, because everyone has a bad day once. Ensure the feedback is based on a pattern that is causing the individual to reach an outcome that is not the desired one. Ensure the feedback is important enough to make a difference, as opposed to coming across as “nitpicking.” Plan appropriately to ensure sharing this feedback is actually helpful.
    
2. Be gentle. Receiving input that has to do with changing behavior is not easy. Recognize this and think about how to express the input gently. Each recipient has a different tolerance for directness with coaching. Ideally, you’ll know your team member well enough to determine the best approach. With that said, always err on the side of being as gentle as possible during the feedback phase. If the behavior escalates to the point where it requires advanced coaching or disciplinary action, that is a different story. But for simple feedback, gentle is better.
    
3. Be encouraging. Once you’ve shared the primary feedback, prepare to share a couple positives from the situation. Provide encouraging observations to relay that your intentions are genuinely intended to support the team member’s overall success.

How to Effectively Receive Feedback  

1. Be attentive. Listen carefully and take notes if needed. Be 100% present in this moment to truly hear everything the giver is saying. Resist the urge to let your mind wander to a defensive place or tune the person out. The information they are sharing with you is a gift, and you can choose how to use it.
    
2. Be engaged. Restate the feedback and the impact that it is causing, as you have heard it. Make sure this comes across as clarifying the feedback, not discounting it. Ask for ideas and suggestions to handle the particular situation or behavior in a way that would be more beneficial to all involved.
    
3. Be appreciative. A team member bringing feedback to you, whether it be your boss, customer, or peer, is a way of them telling you, “I care about your success.” Thank them sincerely for the feedback. Let them know that any time they have feedback for you, it is welcomed. This will reinforce the culture of transparency and trust.

Real trust is built on honest dialogue. Receiving and giving feedback is part of honest dialogue. Spending the time, seeing it as a gift, and wrapping it well (whether giving or receiving), will have high returns in your ability to lead effectively. The best teammates are the ones who can be candid with one another. In order to trust each other, highlighting both negative and positive feedback is critical. Kaplan offers programs for leadership training that include giving appropriate feedback. Learn more about them here.

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Asha Bianca is a dynamic, innovative, and resourceful Senior Level Executive with 20+ years of proven history in growing measurable value in student, customer, employee, and shareholder interests. Asha understands how to grow the bottom line without negatively impacting the business and corporate culture. Throughout her career, she has led teams and departments of all sizes through major change, while minimizing the risk to the business to ensure the organizational health of the company is strong.

Not sure how to use the CFP^® marks on your business card? You are not alone. The purpose of this guide is to help you better understand the proper usage of the CFP^® marks. This helps CFP Board protect the value of the trademark.

To begin, it is important to know when to use the ^® and when to the use the ^™. When you spell out “CERTIFIED FINANCIAL PLANNER^™, you must use the trademark symbol immediately following it. When you abbreviate to CFP^® you must use the registered mark.

How to use the CERTIFIED FINANCIAL PLANNER™ Marks 

When using CERTIFIED FINANCIAL PLANNER™, there are a number of rules you must follow beyond the ™ mark.

• You must use all capital letters or small cap font.
• You must use the ™ symbol at the end.
• The mark must be associated with individual(s) certified by CFP Board – not companies or groups.
• You may use “CERTIFIED FINANCIAL PLANNER™” following an individual name certified by CFP Board (ex. John Smith, CERTIFIED FINANCIAL PLANNER™)
• If not using with an individual name, you must follow “CERTIFIED FINANCIAL PLANNER™” with one of CFP Board’s approved nouns. These include:
  • Certificant
  • Certification
  • Practitioner
  • Professional
  • Mark
  • Exam

How to Use CFP^® Marks

Similarly, when using “CFP^®,” there are a number of rules you must follow beyond the ^® mark.

• You must use all capital letters.
• You cannot use periods.
• You must use the ^_® symbol after "CFP^®."
• The mark must be associated with individual(s) certified by CFP Board – not companies or groups.
• You may use “CFP^®” following an individual name certified by CFP Board (ex. John Smith, CFP^®).
• If not using with an individual name, you must follow “CFP^®” with one of CFP Board’s approved nouns. These include:
  • Certificant
  • Professional
  • Practitioner
  • Certification
  • Mark
  • Exam

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If you're able to advertise your CFP® Certification, that means it's time to make sure you know about continuing education. You can get more information here.

Many of our students have expressed interest in learning more about time management skills for financial professionals and small business owners. Whether you are running a small business like an insurance agency or at the beginning of your financial services career, work can feel a lot like a juggling act. There are always decisions to be made, employees and/or clients to attend to, and correspondence to keep up with. This article provides some steps for developing a time management plan that will help you prioritize what needs to be done and use your time as efficiently as possible.

Step 1: Identify your biggest time wasters

Before you do anything, it is valuable to spend an entire day logging how you spend your time from the moment you wake up until the moment you go to bed at night. You should track everything in order to get a real picture of where you spend your time. Try not to change your typical behaviors on this day otherwise you will not be measuring a “typical” day. Then, look back at your log and see where you are wasting the most time. It might be useful to categorize all of your activities and then calculate the percentage of time you spend on each type of activity. Some categories could be: emails, phone, meetings, breaks, errands, meals, or recreation.

Step 2: Develop clearly defined goals for your business

Now that you have figured out what you spend your “typical” day doing, it is then time to determine what you should be doing. This involves developing very clearly defined goals for your business. Consider developing goals that are short-term (monthly or quarterly), annual, or long-term (two to five years). Make sure your goals are SMART (specific, measurable, attainable, relevant, and time bound), so you will easily be able to track your progress of them.

Step 3: Create a detailed list of tasks

Once you have your list of goals, break those down into clearly defined tasks that need to be accomplished in order to achieve your goals. Then you can clearly see the necessary actions you need to take. The list will also help you see what resources you need and how to allocate them to reach your goals. You may find you are missing resources you need too. Use this list to start identifying what those resource needs are and how you might go about getting the tasks done.

Step 4: Write a list of ongoing business functions

In addition to your goals, you will also have ongoing business functions that are crucial to your business. These activities are crucial to continuing your business operations and should not be ignored in your time management plan. Even if these are not directly attached to goals, you should still record tasks you need to complete on a daily, weekly, monthly, or annual basis. Examples of these include: check and reply to email (daily), deposit funds (weekly), pay electricity bill (monthly), renew a lease (annual).

Step 5: Prioritize tasks

After figuring out your detailed list of tasks, you should then rank your tasks in order of importance. You will want to complete the tasks that will have the greatest impact on your goals and/or your bottom line first. Take into account consequences of not completing something as well. Even if paying your bills does not impact your goals, it is important to them on time to prevent losing important services you need.

Step 6: Assign a time estimate to all tasks

It is a good idea to assign a time estimate to all of your tasks that need completing. This will help you in the next step when you need to create a realistic plan for your day. 

Step 7: Create a plan for your days

Now that you know all of your tasks, you can then go about making a plan of action. It is not realistic to assign every hour of each day with a task. Leave some unscheduled time each day that you can be flexible with should something unexpected come up. While your task list should remain somewhat fluid as things come up, you should revisit it each day when you are devising a plan for your day. Make sure the highest priority items are getting addressed rather than the easiest tasks to complete.

Bonus Tip: Try the Pomodoro technique

If you are looking for a way to be more efficient, try the Pomodoro technique. The Pomodoro technique involves setting a timer for a 25-minute interval to focus on one specific task. Then, you should take a 5-minute break before starting another 25-minute interval. This is a popular time management method because it allows you to manage distractions and prevent burnout by being regimented with breaks. Experiment with the time intervals – some people may find 25 minutes is too long, but 15 or 20 minutes might work.

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Looking for more professional tips? Visit Kaplan Financial Education's blog for the latest tips and tricks to help you throughout your financial services career choice. If you are interested in advancing your financial services career, check out our insurance, Securities, CFP® certification, and professional development programs on the Kaplan Financial Education website.

Effective management is the key to any organization’s success. A manager who can lead, train, mentor, and communicate well is more likely to have productive, happy, and engaged employees. Providing effective and ongoing management training is an investment that can have both tangible and intangible payoffs for a business. 

Improved Employee Engagement

A study conducted by MSW Research and Dale Carnegie Training revealed an employee’s relationship to her/his direct manger is a top predictor of employee engagement. This is because the direct manager is the leader the employee interacts with most and, therefore, has more influence on morale and performance than an executive leader. A key component for a manager in having a good relationship with employees is to be able to provide role clarity (including job definition, communication, and reinforcement of performance expectations), which is a key factor in employee engagement according to SHRM. This helps ensure continued success because employees know what they need to accomplish, and they have the direction and confidence to be more autonomous in their work. 

Improved Collaboration

Not only does employee engagement improve with well-defined roles and expectations, but a Harvard Business Review study found that collaboration improves as well. For example, think about a team of doctors and nurses in an emergency room. Although they do not know what patient condition they will need to treat next, there will be no time wasted in task negotiation when it happens. A surgeon knows it is her/his role to make key decisions about the procedure, while a nurse knows it’s her/his role to sterilize and set up the room and assist the surgeon during the procedure. 

This same role clarity should carry over in a business setting. When all employees know their roles and performance expectations, they are able to collaborate on projects more effectively. In order to have an organization full of people with a clear understanding of their roles, you must have an organization full of managers who are able to provide that guidance. Management training allows a company to develop more consistent leadership and ensure basic management skills are mastered throughout the business. From goal setting to communication skills, investing in the low- and middle-level managers will trickle up the organization as young leaders advance. 

Avoiding Turnover

The consequence of not having quality leaders is disengaged employees, leading to higher turnover. Turnover costs are estimated to be between 100-300% of the base salary of the replaced employee, and they can be even more expensive for highly specialized positions. Why is this? Think of all that goes into replacing an employee. First, there are the straightforward costs of advertising the job, conducting background checks and drug tests, relocating an employee, paying a signing bonus, and reimbursing travel expenses during the interviewing process. Then there are opportunity costs of utilizing resources for interviewing and training that could have otherwise gone to regular production. Once the employee is hired, there is still reduced productivity as they get up and running.

The less an organization can turn over employees, the better. Effective management and leadership training that results in more engaged employees and less turnover is not only cost effective, but it will also generate greater productivity, reduced conflict, and better collaboration throughout your organization. 

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Learn more about leadership and corporate training topics for your organization by visiting our Leadership and Professional Development website.

Project management is an often overlooked skill set that is crucial to an organization's success. Poor project management can stifle productivity, kill creativity, and decrease worker satisfaction. In this article, we will explain project management basics and offer some tips to help you successfully develop a project plan. 

Project Management Basics

In order to understand what project management is, it is useful to break down the meaning of both terms.

A project can be defined as a temporary effort made up of a set of related activities undertaken with limited constraints to achieve a unique set of goals or objectives. A project is not ongoing, unchanging, or repetitive.

Management is the process of setting and achieving goals for the project through planning, organizing, directing, and controlling tasks. Essentially, project management is the process by which a project is managed.

Stages of Project Management

The project management process has five distinct steps, which are broken out below:

1. Initiating: In this initial stage, the project and high-level goals are defined. The implementations team is given authority and resources for the project and stakeholders are identified.
2. Planning: In this second stage, the project tasks are defined including what will be delivered, who will be delivering it, and when it will be delivered. Costs, resources, schedules, and dependencies will be defined. Implementation, monitoring, and adjustment procedures will also be outlined at this point. All stakeholders will agree to the project plan in this stage.
   
3. Executing: In this third stage, the project manager implements the plan as written and agreed upon.
   
4. Managing and Controlling: In this fourth stage, the project manager continues executing the plan, including updating and changing the plan as necessary. This is not a static process, but requires ongoing changes to all aspects of the plan as well as monitoring the implementation in order to identify when changes must be made.
   
5. Closing:In this final stage, the planned delivery is complete. Input is provided for subsequent projects. Some common questions to ask in this stage include: What processes should be changed in the future and why? What lessons did we learn from this project?
   

Project Plan Tips

The process of creating the project plan is just as important as the plan itself. The project plan defines what will happen in the project, what will be delivered, and how it will be implemented. It also defines how the team will monitor work, make changes, and communicate.

The process of creating the project plan allows all stakeholders to participate, discuss, and understand the project. The intention of the process is to discover problems or misunderstandings upfront, identify risks, and negotiate solutions. A good project manager ensures that all stakeholders not only understand the plan, but also agree to it. Planning is not just about agreement, but about reaching an understanding.

It is also important to avoid all ambiguity in the plan. Ensure that your project plan uses a process that highlights misconceptions, different ideas, and misunderstandings upfront. Work through those situations so that all stakeholders understand and agree to the plan.

Negotiations with Stakeholders

The key to creating a successful project plan is getting the buy-in of all stakeholders. Below are two ways to get a better understanding of each stakeholder's investment in the project.

• Ask why: Get clarity on your understanding of the stakeholder’s position. It is also helpful in enabling you to reach agreement when there are conflicts about project requirements. Asking why may help your stakeholders formulate their own opinions more clearly as well.
• Ask about priorities: This will help you understand how strongly your stakeholders feel about the importance of each requirement. This will also help you prioritize which requirements are essential for the project and which requirements can be declared outside the scope of the project.

As the fastest-growing major economy in the world, China continues to offer global companies attractive investment and business opportunities. However, doing business in China also means navigating the complexities that arise from China's unique historical, political, and cultural contexts. China offers plenty of opportunities for new ventures; the Chinese market continues to grow about 7 percent annually, and it is the second largest economy in the world behind the United States. With opportunity comes challenge, however. In this article, we outline some important challenges to consider when doing business in China and offer some recommendations for success.

Cultural Understanding

Business people must have some sensitivity to the Chinese culture and how it impacts business. Hierarchy plays an integral part of business culture in China with leaders and managers being more distinguished than in many Western countries. Chinese leaders and managers expect obedience without question. One important concept to master is “face.” Face represents a person’s reputation and feelings of prestige within the workplace, family, friends, and society. For instance, an American subordinate attending a meeting where his/her boss is making a presentation would generally not think twice about asking a question, making an alternate suggestion, or even disagreeing with something. In China, this would be a serious face-losing situation for the subordinate, boss, and even the company. Not pointing out others’ mistakes and giving credit for others’ good work are both good ways to help others save face.

Because China has a long history of being exploited by foreign countries, it is of particular importance to show respect as a Westerner doing business in China. Giving gifts, accepting invitations, acknowledging hierarchy, addressing people by their designation, attending meetings, and showing genuine interest in the local culture are ways to show respect in China.

Moving Too Quickly

Doing business in China often takes longer than it would in most Western countries. American companies often fail because they are eager to move ahead rapidly, but it is typical in Chinese culture to establish a strong relationship before closing a deal. Therefore, it is important for Westerners to understand they may need to meet with Chinese businesspeople multiple times before a business partnership or deal can be made. If Westerners are invited to drinks or a meal, it is vital to the development of the relationship to go.

Chinese business culture also has a longer decision-making period than Westerners are used to. It is not uncommon for Chinese businesspeople to extend the decision-making period past a deadline given to them. It is important for Westerners to be prepared for that and to not rush them into making a decision before they are ready. Patience is the key to success!

Cost of Doing Business

It is common for Western businesses to move operations overseas to save on operational costs. However, in China, operational costs are getting more expensive. Foreign companies have been required to pay education and urban maintenance and construction taxes since December 2010. In addition, the Social Insurance Law, which took effect in July 2011, imposed additional operating costs on companies that already provide international insurance coverage for their employees.

Companies are also becoming alarmed by industrial overcapacity. Subsidies have encouraged some firms to continue production even with dropping demand and then sell their products overseas. Increasing salaries and growing turnover are also a trend around China, especially in second- and third-tier cities. Both of these factors increase costs for companies because they have to pay workers higher wages, as well as hire and train new workers frequently due to turnover.

Nevertheless, China’s population allows great potential for productivity and potential for demand. As wages continue to increase, so does the purchasing power of Chinese workers. Even with increasing costs, having a business presence in China represents a large opportunity for growth.

Economic Stagnation

China’s growing debt is also of concern. Infrastructure has been a top priority of China’s government, with projects for roads, rails, electricity, and telecommunications…so much so, that China’s investment in infrastructure has hindered their growth. According to researchers at Oxford University, more than half of Chinese infrastructure investments have decreased in economic value as the costs have outweighed the benefits. While infrastructure has been a huge driver of Chinese economic growth over the last few decades, China has recently increased infrastructure spending to counter the slowdown in manufacturing investment. Such investment can lead to waste and add to China’s debt.

Because China’s economic growth has slowed, policymakers in China have begun focusing away from its reliance on investment and industry and on to consumption and services. This is expected to slow short-term growth; however, this shift should build foundations for more sustainable long-term expansion for businesses.

The Role of Government in Business

There is a substantial difference in the role of government in Chinese businesses compared to Western countries. China has a planned economy closely tied to government. In 2007, for example, the US federal government’s fiscal revenue was $2.4 trillion, or 18 percent of GDP, whereas China’s fiscal revenue was 5.1 trillion yuan ($770 billion), accounting for 21 percent of GDP. In China, more than 76% of assets are owned by the government, with people owning less than a quarter; while in the United States, assets are owned privately. This means that to do business in China, a company will most likely have to negotiate with the state. The bureaucracy involved in negotiating with the state can slow down the pace of business ventures.

Joint ventures are difficult to establish because they have substantial government involvement. Legal matters lack consistency and can be changed at the will of the Chinese government. However, the Chinese government has tried in recent years to upgrade legal protections making the business environment more enticing to foreigners.

Corruption

Corruption in China has certainly become more of an issue as the Communist Party of China’s policies, institutions, and norms have clashed with recent market liberalization. Bribery, kickbacks, theft, and misspending of public funds cost at least three percent of GDP each year. Because the Chinese government owns the majority of China’s assets, they have the ability to spend without much oversight into the budget process. The Chinese government has wasted money on high-profile infrastructure projects and government office buildings, and invests in industries with high resource consumption, high pollution, and low job creation.

Recently, there has been a crackdown on corruption, and many high-profile political figures have been jailed for getting caught up in the net of bribery, abuse of power, and other corrupt practices. While foreign investors are generally happy to see this cleanup work, some have expressed fears that the crackdown also lacks transparency. Nonetheless, it is a step in the right direction for foreign businesses.

Did you know that most equity mutual fund investors tend to underperform the S&P 500? This includes investors who seek out and utilize the help of financial advisors. It’s true. The annual performance of the S&P between 1995 and 2014 was 9.85% while the average performance of an equity fund investor was just 5.19%. The biggest explanation, by far, for investor return being so much lower than the S&P is bad investor behavior, as saving and investing behavior account for 87% of portfolio growth. 

Emotions have a lot to do with financial decision-making. When we get emotional, our bodies want us to respond very quickly, and snap decisions are usually wrong.

It's when we don't realize we are getting angry that we tend to make poor decisions or go against our core values and beliefs. The brain is hardwired to reflex before it reflects. An emotional response takes 12 milliseconds while a cognitive response takes 40 milliseconds. This is good if you are trying to escape a burning building, but it poses challenges if you are making investment decisions or solution selling.  

The relationship of investor performance to the S&P 500 and our emotional and psychological behavior is important to share with clients and prospects, especially the newest generation of investors. This information can help them to understand the importance of selecting a financial advisor who will coach and advise them to handle their emotions in an appropriate way when making financial decisions.

Emotional Intelligence

Emotional intelligence is recognizing what we are feeling in the moment and being able to differentiate between our emotions.

For example, let's say you get a call from your child's school, and you find out he has been given an out-of-school suspension. Immediately, you feel your breathing become more rapid, and you start rubbing your forehead. If you notice these reactions and understand that they are a result of the fact that you are upset about the situation, you are using emotional intelligence.

Emotional Competence

Emotional competence is managing our emotions. It is the ability to stay focused on a goal in the face of competing emotions. It is also the capacity to create alignment between your goals, actions, and values. Emotional competence is the application of our emotional intelligence.

In thinking about the last scenario, you might recognize that you are getting upset about your child's suspension, which as we said, would show emotional intelligence. However, if you don't do anything to manage those emotions, or you let yourself follow a path where those emotions take you to an undesirable behavior, you would be showing emotional incompetence. Emotional competence is being able to successfully manage our emotions once we are able to recognize them. Being emotionally competent would require you to take a course of action that would have the best outcome.

Managing Your Stress

When we get emotional due to outside stressors, our brains actually shut off our ability to think logically and coherently. When we are cognitively impaired, the following happens:

• We don't listen as well.
• We have shorter fuses and often feel impatient.
• We tend to obsess about the past and/or worry about the future.

All of these reactions will negatively impact our ability to think logically and act rationally, so our first important step is to learn how to calm ourselves down and bring ourselves out of that emotional state. We can then begin to think rationally again.

So what can you do to become emotionally competent?  What will make the difference in your life and the lives of your clients to lessen stress and help you improve decision-making?

• Work on yourself first.  Before you can help your clients, you need to work on becoming more emotionally competent in your own life.  You need to become more aware of ways you can improve your decision-making capabilities. Once you’ve done it, you’ll have a better idea how much it can impact your life—and how you can help others. 
• Understand your feelings. In times of high stress, how do you react?  What are you thinking?  What are you doing?  What are some of the patterns in your behavior? What are the most effective ways to calm you down in those times of high stress? 
• Know your values. What do you look like on your very best day?  What are your values?  What is your ideal self?  Your values can cause stress when you spend energy and time on things that do not align with your values. Knowing your top values and being able to verbalize them are important so you can better work through your stress and emotions.
  

One easy way to improve your sales skills is through solution selling. What is solution selling? Solution selling means focusing on your customers’ pain points and addressing how your product or service offerings can provide solutions to their problems. In order to execute solution selling successfully, you first need to understand the difference between features and benefits and when to incorporate both into your sales pitch.

Features

A feature is a characteristic or fact about a product or service. It is often a tangible attribute or jargon about the product. For example, a bicycle’s features could be that it weighs only 20 pounds or that it has 26 gears. It is important to know the features of your product or service because customers often compare competitor products based on features. Customers may also have a checklist of features to ensure your offering meets their basic requirements. It is doubtful that your customer will buy strictly only on the features, but they will most likely be interested in knowing the features early on.

Benefits

The benefit is what the customer gains by using your product or service; it represents value and is often intangible. In other words, what will the product DO for your customer? What problems will it solve? What will your customer gain? For example, the bicycle that only weighs 20 pounds will allow the rider to hit higher speeds. The 26 gears will allow the rider more precise control of their resistance. 

Putting It All Together with Solution Selling

While there is a place for features in your selling process, the focus of solution selling is on the benefits your product or service offerings provide for your customers. A good rule of thumb to remember is: features tell, but benefits sell! Instead of promoting your products and services in the same way to each customer, frame your sales pitch around each customer’s needs.

It may be helpful to jot down some product and service features you offer and then determine the accompanying benefits for your customers. For example:

In order to successfully deliver a sales pitch, you need to examine and understand how features you offer relate to benefits that can solve your customer’s problems. After gathering background information from each customer, you should be familiar with the features and benefits your products offer in order to make recommendations that meet each customer’s needs.

Think in Terms of Solutions

The best way to think about improving your sales skills is to always think from the perspective of the customer. Based on what you’ve heard from your customer, how will this product offering provide a solution to their problems? When you use this solution selling approach for framing your sales pitch, you can be sure your message is right on target every time.

Remember: features tell, but benefits sell!

The Series 99 license, also known as the Operations Professional Exam, allows representatives to register with FINRA to offer advice or facilitate any of the following: debt or equity offerings (public or private), mergers or acquisitions, tender offers, financial restructuring, asset sales, and divestitures or corporate reorganizations.

To earn your Series 99 license, follow these steps.

Step 1: Take and Pass the SIE Exam

The SIE exam tests common topics such as fundamentals, regulatory agencies and their functions, product knowledge, and acceptable and unacceptable practices. You can take the SIE exam before being sponsored by a firm and even while you are still in school. You have a four-year window in which to take and pass any of the representative level top-off exams, like Series 99, after passing the SIE exam. Note that FINRA says that the SIE and Series 99 licenses are "corequisites," which does not mean they have to be taken at the same time. What it means is that you have to pass both exams to earn your license, and you can take them in any order.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

Step 2: Secure a Sponsorship

To take the Series 99 exam, you must be sponsored by a FINRA member firm or a self-regulatory organization (SRO). Firms apply for candidates to take the exam by filing a Uniform Application for Security Industry Registration or Transfer (Form U4). There is also an exam fee that is commonly covered by the sponsoring firm.

Step 3: Study for the Series 99 Exam

Once you secure your sponsorship, you can then take the top-off exam for the Series 99 license. Most candidates choose to take the SIE before the Series 99, but you don't have to. You can take the Series 99 exam first if you prefer.

The licensing exam is not exactly a walk in the park. You need to study with purpose and planning. To help you out, many retail brokerage firms have an in-house training program or, in some cases, they have an agreement with an external training provider. Exam preparation and review courses go a long way toward helping you pass your Series 99 exam the first time.

The Series 99 content outline is divided into two major job functions that are performed by an Operations Professional:

• Function 1: Knowledge Associated with the Securities Industry and Broker-Dealer Operations, 35 questions, 70% of exam items
• Function 2: Professional Conduct and Ethical Considerations, 15 questions, 30% of exam items.

The questions on the Series 99 examination emphasize tasks, such as opening and maintaining accounts. There are nine tasks associated with Function 1 and four tasks associated with Function 2. For more details on how the Series 99 is broken down, check out this article.

Step 4: Take and Pass the Series 99 Exam

Now that you've studied, it's time to take the top-off exam for the Series 99 license. The Series 99 examination has 50 questions, and the test time is 1 hour and 30 minutes (90 minutes). Currently, a score of 68 percent is required to pass the examination.

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Series 99 licensing exam prep can really give you the edge you need to pass. Learn more about our self-study options and how to purchase a Series 99 exam prep package on our website.

The Series 79 license, also known as the Investment Banking Representative Examination (IB), allows representatives to register with FINRA to offer advice or facilitate any of the following: debt or equity offerings (public or private), mergers or acquisitions, tender offers, financial restructuring, asset sales, and divestitures or corporate reorganizations.

Prior to 2009, all Investment Banking Representatives were required to take the Series 7 exam to be a general broker. However, enough representatives were only performing investment banking activities, so the Securities and Exchange Commission (SEC) approved the Series 79 exam, which focuses on the investment banking portions of the Series 7 exam.

To earn your Series 79 license, follow these steps.

Step 1: Take and Pass the SIE Exam

The SIE exam tests common topics such as fundamentals, regulatory agencies and their functions, product knowledge, and acceptable and unacceptable practices. You can take the SIE exam before being sponsored by a firm and even while you are still in school. You have a four-year window in which to take and pass any of the representative level top-off exams, like Series 79, after passing the SIE exam. Note that FINRA calls both exams "corequisites," but that does not mean you have to take them at the same time. What FINRA means is that you have to take both the SIE and the Series 79 to earn your license, but you can take them in any order you wish.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

Step 2: Secure a Sponsorship

To take the Series 79 exam, you must be sponsored by a FINRA member firm or a self-regulatory organization (SRO). Firms apply for candidates to take the exam by filing a Uniform Application for Security Industry Registration or Transfer (Form U4). There is also an exam fee that is commonly covered by the sponsoring firm.

Step 3: Study for the Series 79 Exam

After securing your sponsorship, the next step is taking the top-off exam for the Series 79 license. Most candidates choose to take the SIE before the Series 79, but you can take the Series 79 first if you wish.

The licensing exam is not exactly a walk in the park. You need to study with purpose and planning. To help you out, many retail brokerage firms have an in-house training program or, in some cases, they have an agreement with an external training provider. Exam preparation and review courses go a long way toward helping you pass your Series 79 exam the first time.

The content outline for the Series 79 exam is divided into into three major job functions that are performed by an Investment Banking Representative:

• Function 1: Collection, Analysis and Evaluation of Data, 37 questions, 47% of exam items
• Function 2: Underwriting and New Financing Transactions, Types of Offerings and Registration of Securities, 20 questions, 27% of exam items
• Function 3: Mergers and Acquisitions, Tender Offers and Financial Restructuring Transactions, 18 questions, 24% of exam items

The questions on the revised Series 79 examination emphasize tasks such as advising on or facilitating debt or equity offerings through a private placement or public offering, and advising or facilitating mergers and acquisitions, tender offers, financial restructurings, and asset sales.

Step 4: Take and Pass the Series 79 Exam

Once you’ve passed the SIE exam, studied, and secured your sponsorship, you can then take the top-off exam for the Series 79 license. The test time is 1 hour and 30 minutes and the passing score is 70 percent and above. Once you pass, you’ll be licensed.

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Series 79 licensing exam prep can really give you the edge you need to pass. Learn more about our self-study options and how to purchase a Series 79 exam prep package on our website.

The Series 66 license, known as the Uniform Combined State Law Examination, is a North American Securities Administrators Association ( NASAA) exam that is administered by FINRA. It is required for individuals acting as or soliciting for the service of investment advisors or soliciting the purchase or sale of securities within a state. Getting the Series 66 license fulfills the requirements of both the Series 63 and Series 65 licenses.

In order to take the Series 66 exam, you must be a  Series 7 license holder, or be taking the Series 7 license exam concurrently with the Series 66 license exam. (If you are earning your Series 7, you will also have to pass the new SIE exam.) If you are not planning on getting the Series 7 license, then you must take the Series 65 license exam instead.

Obtaining the Series 66 license is important for representatives who provide advice on ERISA-regulated retirement accounts. 

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

How to Get the Series 66 License

Unlike many FINRA Series exams, the Series 66 exam does not require an individual to be sponsored by a member firm. If you are not Form U4 registered or affiliated with a firm through FINRA’s Web CRD system, you should use the Form U10 to request and pay for the Series 66 exam. There is an exam fee that is commonly covered by the sponsoring firm if you are Form U4 registered, or by the individual if you are not sponsored.

The Series 66 exam covers four topic areas:

• Economic Factors and Business Information
• Investment Vehicle Characteristics
• Client Investment Recommendations and Strategies
• Laws, Regulations, and Guidelines, including Prohibition on Unethical Business Practices

The Series 66 exam contains 100 multiple-choice questions that must be completed in 150 minutes. You must get a 73/100 or higher to pass.

In June 2023, NASAA added new content to the exam to better reflect the skills and knowledge required for dually registered agents of broker dealers and investment adviser representatives. Some content areas were renamed, combined, or reorganized. Topics currently in the Series 65 were added including Business Continuation and Succession and certain Investment Vehicle Characteristics. Some new specifications emphasize the characteristics of different types of investments, including SPACs, blind pools, blank check companies, non-liquid REITs, and digital assets. Alternative investments were also updated to better reflect the changing marketplace. In addition, new areas were added to highlight the importance of CE for IARs, exploitation of seniors and vulnerable adults, and Regulation BI. Updates were also added for recent regulatory changes in the Secure Act 2.0.

While the length of the exam and passing score did not change, the weightings and number of questions in some topic areas were updated to better reflect the importance of certain knowledge and skills. Check NASAA’s website for the most up-to-date content outline for the Series 66 exam.

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Are you ready to enroll in Series 66 licensing exam prep? Check out our website to learn more about our live and online study options, and to purchase a Series 66 exam prep package.

The Series 63 exam, known as the Uniform Agent State Law Examination, qualifies individuals as securities agents. The Series 63 exam, developed by NASAA in cooperation with representatives of the securities industry and administered by FINRA, covers principles of state securities regulations.

The Series 63 license is intended to measure an applicant’s knowledge and understanding of state law and regulations. It is required for individuals soliciting the purchase or sale of securities products, such as mutual funds, variable annuities, stocks, or bonds within a state. To sell securities, an agent must have both the Series 63 license and the Series 7 license (General Securities Representative), or the Series 6 (Investment Company Products/Variable Contracts Limited Representative). To earn the Series 6, Series 7, or both, you must also pass the new SIE exam.

Thinking about a career in securities? Download our free eBook, Launching Your Securities Career, to get tips and advice from 100+ securities professionals.

How to Get the Series 63 License

Unlike many other FINRA exams, the Series 63 exam does not require member firm sponsorship. If you are not Form U4 registered or affiliated with a firm through FINRA’s Web CRD system, you should use the Form U10 to request and pay the $147 fee for the Series 63 exam.

The 75-minute exam consists of 65 multiple-choice questions, 60 of which will count toward your final score. The remaining 5 questions are being pre-tested for possible inclusion in the official question bank. These questions will appear anywhere in the exam and are not identified. To pass the Series 63 exam, you must answer 43 of the 60 scored questions correctly, or achieve a score of just over 71%.

The exam covers two topic areas:

• State Securities Acts and related rules and regulations, as well as remedies and administrative provisions
• Ethical practices and fiduciary obligations, including communication with customers and prospects

In June 2023, NASAA updated the curriculum for the Series 63, 65, and 66 exams. Changes to the Series 63 exam better reflect the skills and knowledge needed to be an agent of a broker dealer. The number of questions and the passing score for the Series 63 exam were not changed; however, the weighting of the exam and number of questions in each some topic areas were adjusted to better reflect the importance of certain knowledge and skills.

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Ready to get your Series 63 license? Browse our website to learn more about our live and online study options, and to purchase a Series 63 exam prep package. 

Growing your business by marketing your agency can be an extremely daunting undertaking, especially if you don’t have any marketing experience. For this reason, the Kaplan Financial Education team put together some best practices and ideas for insurance agent marketing.

1. Set Goals

Before you embark on a marketing strategy, it is important that you first sit down and set your marketing goals. It is best to make them SMART (specific, measurable, achievable, results-focused, and time-bound) goals, so you will be able to measure your results against them. Consider setting goals for producing, prospecting, sales production, and cross-selling and retention areas. Write down what you want to do, how you want to accomplish it, and when you want to accomplish it by. This will help drive your new marketing ideas.

2. Make a Marketing Budget

Once you know what your goals are, the next step is to make a marketing budget. Allocate a certain amount of spend for each marketing channel you want to utilize. If you can, look back on what you spent the previous year to get an idea for your estimates. Are there channels that didn’t perform well? Consider cutting the budget on those in favor of new or more profitable channels.

3. Set Tracking Metrics

Tracking every piece of business is important so you know what channels of your marketing are working. Ask every new client how they heard about you and keep track of their answers. This will help you go a long way.

Why do Insurance Agents Fail?

4. Create a Referral Program

Your customers are your best referrals. Offer an incentive for your current clients to spread the word about your agency. Offer your clients a discount or a gift card for bringing in new referrals and your referrals a discount or gift card for choosing your agency. You can even create marketing pieces explaining the referral discount and hand them to customers to give out to their friends and family. Post the program on your social media accounts and website.  Add a link to your referral program page on your email signature. Let your clients do some of the work for you.

5. Encourage Positive Online Reviews

According to a BrightLocal study, 88% of consumers have read reviews to determine the quality of a local business. In other words, nearly 9 out of 10 people have read online reviews of your business before deciding whether to trust you. This means that it is vitally important that your agency get good online reviews in places like Facebook, Google Plus, Yelp, and Yellow Pages.  There are many easy things you can do to encourage reviews. Add links to your agency’s profiles in your email signature with a callout to leave a review. Post a sign in the office. Mention it to happy customers as they are leaving your office. Be sure to also read reviews regularly and respond to both positive and negative feedback. The time you put into responses will showcase how much you care about your clients.

6. Get Involved in the Community

Becoming involved in your local community is a great way to get your agency name out there. It also shows that you are invested in the community. Consider sponsoring youth sports, community events, or local non-profits. You may bring in new clients who want to support the league, event, or organization you are sponsoring!

7. Utilize Social Media

Nothing connects you faster to your customers than social media. There are many things your agency can do to take advantage of social media. You can utilize social media ads and target people in your local community fairly inexpensively. You can offer a discount to anyone who checks in to your agency online. You can join relevant groups on LinkedIn and offer expertise to others. All of these things will help you network and get more exposure for your business. Check out our article on social media tips here.

8. Do Customer Surveys

Hear from your customers how your agency is doing through online surveys. Ask for open-ended testimonials from your customers and use that information for marketing materials. Ask for ideas of how your organization can improve. Consider offering a small incentive like a gift card for completing your survey to increase your response rate.

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Looking for more tips and tricks in the insurance industry? Check out Kaplan's Career Corner for more great articles related to insurance. Be sure to check out our Insurance Licensing, Insurance Continuing Education, and Professional Development programs as well. 

While proper market conduct is an essential part of good business with any client, it is especially important in the retiree market. Financial practitioners who work in this market must be sensitive to the distinctive issues and challenges confronting the retiree client. Still, while retirees require additional attention to market conduct, the underlying basis is no different here than with younger clients.

Dealing with personal financial affairs can be an intimidating ordeal for almost anyone. For many retirees, especially widows who might have been removed from day-to-day financial decision-making earlier in life, the need to make important financial decisions can be terrifying. In addition, in their minds, there is a dizzying new array of insurance products to consider, including  long-term care and  Medicare supplement plans.

At first, the signs are hardly detectable. Indeed, a decline in decision-making capacity can be masked by other outward signs of confidence. Rare is the retiree whose opinions and convictions about family and social issues don’t intensify with age. But over time, this confidence can weaken.

While faith in their general wisdom may strengthen, the same cannot always be said of the confidence retirees feel regarding financial matters. Even those who were responsible for the family’s budget during the growing years may find it increasingly difficult to keep abreast of changing financial developments later in life, especially those dealing with insurance matters and estate transfers.

A wide assortment of new issues arises after retirement that can cause retirees to become at once more cautious and more deserving of their financial practitioner’s care and attention to suitability and disclosure matters. There are a number of challenges that can diminish the retiree’s capacity for keeping up with their changing personal finances.

Compliance Issues: Five Challenges for Retirees

Some changes are more common than others, but all have the same end result—they affect the way older Americans approach financial decision making. A closer look at each will illustrate why it is so important to use extra care when conducting business in the retiree market. These five challenges include the following:

1. A transition in investment perspective from asset accumulation to asset distribution and preservation
2. A natural shift in risk tolerance toward a more conservative investment position
3. Changing personal risks that increase the need for new financial products and diminish the need for others
4. Increased product complexity that many consumers of all ages find hard to grasp
5. Potentially reduced mental acuity or a growing unease with technical matters that can slow down the decision-making process and may even raise questions about buyer competence

Challenge 1: Transition from Asset Accumulation to Asset Distribution

After spending years worrying about saving for retirement, it can be difficult for some retirees to change their mindset and accept the need for distributing those assets.

Decisions made with respect to qualified plan distributions and personal savings will affect retirement income security, possibly for years to come, making many retirees nervous about decision making.

It is especially important for financial practitioners serving the retiree market to thoroughly understand the rules and requirements pertaining to qualified plan distributions before offering advice in that crucial area.

Challenge 2: A Turn Toward Conservatism

Financial practitioners are beginning to advise their retiree clients to accept more market risk than they have in the past. Nonetheless, the natural swing toward conservatism that in part defines the transition to retirement age cannot be denied. Practitioners who are struggling with this issue with a client will find it easier to understand the client’s mind-set by realizing that the money in question represents, to the client, the difference between financial security and poverty.

This change in financial temperament translates into an understandable fear of making a bad financial decision that might adversely affect the retiree’s financial security or legacy by reducing assets that are earmarked for retirement income or bequest purposes. When guiding retiree citizens in making investment decisions, financial representatives must understand and be sensitive to the client’s perceived need to protect asset values.

Challenge 3: Changing Insurance Needs

Many retirees are well aware of the changing risks they face with advancing age. For example, long-term medical and nursing care moves from the wings to center stage in the theater of personal risks, while disability-related loss of income retreats. Knowing they face new risks and knowing what to do about them are two different things.

Statistically, the average new retiree today can expect two full decades or more of life beyond age 65. Indeed, planning to meet the costs of a long and active retirement should be at the top of every retiree client’s list of financial priorities. As with any statistical average, some individuals must fall below the mean, which in this case entails long-term medical and nursing care or an early death.

Prudent financial planning calls for strategies that presume the client will live a long, healthy, and active life but prepare them for the worst. The probability of succumbing to a debilitating disease requiring extensive medical and long-term care, though far from certain, is too great to ignore.

Senior Americans from all walks of life are aware of the new risks that arise with age. Not every product is well suited for every individual. The need for long-term care insurance, for example, is determined in large measure by the client’s income and net worth. The unethical financial representative who is motivated solely by sales volume might easily abuse the trust that elder clients frequently place in their financial advisors by recommending products that might not be in the client’s best interest, or suggesting benefit levels that exceed the client’s needs.

Challenge 4: Increased Product Complexity

In response to the burgeoning retiree population, the financial services industry has developed new products that are geared to that age group’s particular needs. These new products tend to be complicated. Second-to-die life insurance, long-term care insurance, and the variety of Medicare programs (all of which are directed to the retiree market), serve a valuable role in providing financial security—but each is subject to misunderstanding by the general public, especially retirees. Likewise, qualified plan distribution strategies can be painfully confusing to lay people. All of this requires financial practitioners to exercise even more care when educating their retiree clients.

It is important for the financial practitioner to remain focused on the need for full and fair disclosure when recommending or explaining a product. It might be easy to help a retiree client understand a complex product by referring to it as something that resembles another better-understood concept, but care must be taken to avoid confusing the client on this point. (The classic example of oversimplification is the illegal use of the term tax-free mutual fund to describe a variable contract.)

When trying to simplify a concept to make it clear, practitioners must always remember to clearly identify the type of product being recommended. Simplifying a product’s explanation is never a valid excuse for misleading a prospective client about the product’s true nature.

Challenge 5: The Senior’s Reduced Mental Acuity

This common challenge facing the senior client—reduced mental acuity—may be the most sensitive issue of all, and certainly is one of the most distressing aspects of aging. Besides making it difficult for seniors to react promptly to changing financial circumstances, a diminished ability or willingness to comprehend complex issues is a frustrating reminder of the toll exacted by the aging process. One only has to look at an aging parent or grandparent to realize the extent to which the aging process can beat down the will, if not the ability, to study a financial situation and make a decision.

The loss of decision-making capacity exposes an individual to a heightened risk of ill-informed and ill-advised buying decisions. The fear of making a bad financial decision at once makes older Americans especially wary of new ideas involving finances, yet willing to let advisors they trust make financial decisions for them.

Why do Insurance Agents Fail?

Serving Retirees Better

Financial security in retirement involves other important issues besides money; so much so that attention to these nonfinancial issues cannot be ignored by the professional financial practitioner.

For example, a client who has no hobbies or interests other than work may experience a feeling of uselessness after retirement. The practitioner who can suggest worthwhile activities, such as becoming involved in a civic or charitable organization, may provide an enhancement to a senior client’s retirement. The most successful retirement planners strive to meet their clients’ financial, personal, and emotional needs to ensure an enriching, as well as financially secure, retirement.

The following are some ideas that financial practitioners can use to better serve retiree clients:

• Always use a fact finder. A fact finder becomes an important record of the information on the basis of which suitability is ultimately determined.
• Put everything in writing. This advice is important in all sales transactions, but especially in transactions involving senior markets. The client who understands the reason for buying a product today may forget the reason next year; committing the problem and recommended solution to paper (ideally, signed by the client) is the best way for the financial practitioner to defend against memory loss.
• Encourage the participation of others close to the client. Retiree clients are more likely than their younger counterparts to seek the advice of trusted friends and family members before making a financial decision. If it is apparent that a client places a lot of importance on their son’s or daughter’s opinion regarding financial matters; for example, the financial practitioner should suggest that the person be brought into the presentation. Advice like this is a sure way of helping to build a client’s trust and respect.
• Expect a shift toward conservatism. The desire to preserve retirement capital exerts a strong influence on a person’s tolerance for investment risk. Before ideas can be explored to accept higher market risk, a prospective retiree client needs to see that the financial practitioner understands the client’s concern about capital preservation.
• Use plenty of third-party material. In their effort to make informed financial decisions, senior clients typically want more third-party material (brochures, pamphlets, copies of relevant articles, etc.) than younger clients.
• Be patient. As with any client, be patient. Be ready to repeat key points several times if necessary.

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• The Need for Retirement Planning
• Retirement Risk Management Strategies
• Inflation and Retirement
• Retirement Plan Distributions
• Social Security
• Analyzing Retirement Income Needs
• Wealth Accumulation and Market Conduct and Ethics
• Investing Retirement Assets

• The Role of Market Conduct and Ethics in the Retiree Market

A Medicare supplement policy, also called a Medigap policy, is health insurance sold by a private insurance company to fill certain gaps in the Original Medicare coverage. The Original Medicare Program, Medicare Parts A and B, does not cover all health care expenses. There are major gaps in the program that can create financial hardships for senior citizens. Part A covers inpatient hospital expenses for a specified period of time, but it doesn’t cover outpatient expenses.

More complete health care coverage is obtained by a beneficiary also enrolling in Medicare Part B. However, both Part A and Part B are subject to deductibles, coinsurance, co-payments, and certain other limitations.

Medigap policies are designed to help fill many of those coverage gaps, and some Medigap policies even consider benefits the Original Medicare does not include.

However, Medigap policies do not cover Medicare beneficiaries’ share of the premium costs under other types of health coverage, including Medicare Advantage Plans (e.g., HMOs, PPOs, or Private Fee-for-Service Plans); stand-alone Medicare Prescription Drug Plans; employer or union plans; Veterans Administration benefits; TRICARERE; Indian Health Service, Tribal, and Urban Indian Health plans; and long-term care insurance policies.

Except for Medicare Part D prescription drug plans, if a person has any one of the other types of health coverages referred to in the preceding paragraph, insurance companies cannot sell a Medigap policy to that individual.

It’s also important for beneficiaries to realize that Medigap policies do not cover long-term custodial care such as that provided in nursing homes. Too many people believe that the combination of Medicare and Medigap supplement policies cover such care.

The Financial Need

The need for additional health care coverage is clear when the benefits provided by Medicare are reviewed. For individuals who have adequate income to provide for their daily needs and comforts but only a few extra dollars for nonessential items, a sudden, large medical bill can create a financial crisis.

The Original Medicare Plan (i.e., Medicare Parts A and B) presents senior citizens with significant financial risks.

Medicare supplement insurance policies are designed to pay the costs not covered by the Original Medicare Plan, and this is why Medicare supplement insurance is called Medigap coverage. Federal and state laws regulate the benefits provided by Medicare supplements.

Senior citizens also need good advice regarding Medicare and Medicare supplement insurance policies. Many insurers and retiree associations overwhelm senior citizens with Medicare supplement advertisements. This often creates confusion, and the confusion causes seniors to make mistakes in choosing supplemental coverage.

Professionalism and ethical conduct on the part of producers marketing Medicare supplements are critical needs, as many marketing abuses in this area of insurance have occurred in the past.

The Role of Insurers and Producers

What seniors actually need are one-on-one discussions, explanations, and advice regarding Medicare supplemental coverage. The best way for a senior citizen to receive these services is in a planning session with a professional insurance producer who is knowledgeable about the Medicare program and Medicare supplement coverage.

As a producer, you must thoroughly understand the personal circumstances of a prospect for a Medicare supplement policy. The individual will generally be an older person who most likely needs detailed information presented in an easy-to-understand manner and will probably not be inclined to make an immediate decision regarding the purchase of any insurance.

Why do Insurance Agents Fail?

So, you, the producer, must have specific and up-to-date information regarding Medicare—how it functions, the types of benefits that are offered, the claims process, and so forth. You must also have specific information regarding the need for Medicare supplement insurance to close the gaps in Medicare coverage, and you must be able to explain how your product satisfies the client’s specific needs.

Insurance producers dealing with senior citizens have a fiduciary responsibility to act in an ethical manner and to never sell inappropriate or duplicate coverages. Too often, senior citizens are the target of unscrupulous individuals who prey on their fears and lack of resistance to high-pressure sales tactics.

In most states, it is illegal to sell duplicate Medicare supplement cover¬age (not replacement coverage), and it is illegal to sell Medigap insurance to people who are covered by Medicare Advantage (Part C) plans. It is always illegal for a producer to resort to high-pressure sales tactics. Severe penalties are usually imposed for violating these laws, including:

• loss of license
• jail terms for up to two years
• fines up to $10,000

Although it is unethical and inappropriate to duplicate existing coverage for the sake of generating a premium and/or commission, the practice does exist. Producers may, therefore, encounter senior citizens who already have more than one Medicare supplement policy. When this situation arises, producers are obligated to inform clients that only one Medicare supplement is needed to provide adequate coverage. Plan beneficiaries cannot collect double or triple benefits on a claim just because they may have two or three separate policies.

Providing proper advice about existing coverage is as important as recommending new coverage to close insurance gaps. Doing so may not always result in a sale or commission, but such behavior is demanded by regulation and codes of professional ethics.

Producers also need to exercise patience when dealing with senior citizens. In many cases, senior citizens do not like to be forced into quick decisions, and this effort should not take place. When contemplating a purchase decision, seniors often want to talk it over with significant others, such as a spouse, children, other relatives, or friends. Frequently, wanting to do this is not a sales objection but a genuine need for consensus and support, which generally must be satisfied before the person will purchase any insurance. Thus, producers should always exercise compassion, understanding, and patience when dealing with senior citizens.

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Want more information on Medicare Supplemental Plans or Medigap coverage? Take our full Insurance Continuing Education course titled Medicare and Medigap Insurance, which covers the following topics:

• Introduction to Medicare
• The Original Medicare Program – Medicare Part A
• The Original Medicare Program – Medicare Part B
• Medicare Supplemental Insurance
• Medicare Advantage Plans and Medicare Prescription Plans: Part C and Part D
• Examples of Benefit Payments

Long-term care insurance allows you to use the fundamental selling skills that you have developed with other financial products to address another need of the customer. In most cases, only minor modifications of these skills will be required for you to sell long-term care insurance. However, looking into insurance continuing education on the topic is always a good idea.

Minimum and Maximum Ages

Most literature from carriers that provide long-term care insurance products suggests that the individual long-term care market "begins at 40." Generally speaking, consumers will not become motivated to consider their long-term care needs until their early 40s. Why?

Well, several things are happening in their lives. They just got their first pair of bifocals, and the optometrist explained that, "it's just something that happens to your eyes when you get older." Someone at the office who is about the same age recently had a heart attack. And the doctor wasn't happy with their triglyceride count during the last physical. The kids are in college or about to start, and that comfortable nest egg doesn't look so comfortable anymore. The health and care of their aging parents are increasingly on their minds.

Perhaps most important of all, they begin to feel the death-grip of age take root in their own bodies. In the sanctuary of secret thought, they begin to confront the inevitability of their own mortality. The maximum issue age varies by insurer. The most common maximum ages in more recent policies are 79 and 84. Of course, the coverage becomes more expensive at the higher ages.

Prospecting

So, with such a large market, where do you begin? First, recognize that this group is not your traditional life insurance clientele. Your 20- to 39-year-old life clients will eventually become long-term care prospects, but they generally are not the place to start in bridging into the long-term care business. Too many agents have made this mistake.

So, we need a fresh way to generate prospects among the 50–64 age group. There are several approaches we could use.

• Your natural market: social systems and subcultures you belong to in a community
• Seminars: Host a seminar to get the message across to a large group at once; consider inviting a health expert to add credibility
• Referred leads: Ask for leads from satisfied customers
• Advertising: Advertise in community, TV, radio, online

Important Note: However you prospect for long-term care clients, be sure to be diligent in following any applicable policies and procedures of your company. And, above all, be ethical.

Qualification

Once you have identified possible long-term care insurance prospects, you must qualify them for your services. The questions here are the same as for any other insurance market:

• Does the prospect have an insurable need?
• Can the prospect be seen on a favorable basis?
• Is the prospect insurable?
• Can the prospect pay premiums?

Approaching the Prospect

In approaching the long-term care insurance prospect for the first time, you have three goals in mind:

• Make the prospect aware of who you are and what you do.
• Give the prospect an idea of how you can benefit him or her.
• Establish personal rapport and a feeling of trust between you.

Agents often use so-called pre-approach letters to make the initial contact with a prospect. This personalized letter may be accompanied by a brochure about the need for long-term care insurance. The letter and brochure are certainly intended to be educational, but they should also disturb the prospect's complacency. Sometimes you'll catch the prospect at just the right time—he or she knows that something needs to be done; he or she just hasn't done it yet.

You follow up the pre-approach letter with a telephone call for an appointment. If your letter has made the proper impression, the appointment should be easy to secure.

Important Note: However you prospect for long-term care insurance clients, be sure to be diligent in following any applicable policies and procedures of your company. 

Why do Insurance Agents Fail?

The First Interview

At the first meeting with the prospect, the agent wants to describe the long-term care insurance need, seek general agreement from the prospect that the need exists in his or her case, and set the stage for fact-finding. The first interview is also usually the best time to discuss how the agent gets paid for his or her services and how those services can benefit the client.

The agent wants to create a good first impression and to begin to build rapport and trust. These are necessary steps before the client will freely share confidential personal, family and financial information.

Some agents prefer to collect the facts personally at the end of the first interview. Another common practice is to give the client a fact-finding form to complete before the next interview.

In the first interview, it is important to deal with the potential need for long-term care coverage carefully. Most people have an aversion to nursing homes. They refuse to picture themselves living in one. This denial can result in lost sales if you "allow the game to be played on this field." Instead, you need to seek a different venue—a "playing field" that is less threatening to your prospect.

The agents who successfully sell long-term care insurance have found the correct playing field: the prospect's fear of economic loss due to long-term care costs. The prospect will deal with this subject rationally, unlike the fear of entering a nursing home. We can't solve the nursing home fear anyway; the best long-term care policy won't keep the insured out of a nursing home. But it will prevent the financial devastation of paying long-term care costs out-of-pocket.

Presenting and Selling the Plan

After you have gathered the facts and used them to develop one or more long-term care plans for the prospect, it is time to make the closing presentation. The agent will normally begin the presentation by restating the assumptions and key facts on which the plan is based. This serves to remind the prospect that the plan was not developed in a vacuum but used the information provided by him or her as the starting point.

The agent must, of course, secure the prospect's acceptance of the plan. If he or she balks for any reason, the agent must discover the reasons for such reluctance. Some of the most common objections and misconceptions are identified and defused in the following screens.

Addressing Concerns and Updating the Plan

The final aspect of long-term care planning is periodic plan review and update. This is an area in which agents sometimes fall short. The best-designed plan can become obsolete if long-term care costs, client financial circumstances, client objectives, or tax laws change.

As a general rule, the long-term care plan should be reviewed at least every other year.

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Want more information on long-term care insurance? Take our full Insurance Continuing Education course titled Long-Term Care Concepts for your state, which includes the following topics:

• The Need for Long-Term Care
• Sources of Long-Term Care
• Paying for Long-Term Care
• Individual and Group Long-Term Care Coverage
• Partnership Policies
• Taxation of Long-Term Care Insurance
• Selling Long-Term Care Insurance
• Sample Pre-Approach Letter

Today, money laundering is becoming an increasingly international and complex crime because of the rapid advances in technology and the globalization of financial services. Financial systems allow criminals to transfer millions of dollars instantly through computers and satellites. In addition to banks, money is now laundered through currency exchanges, stock brokerages, gold dealers, casinos, automobile dealerships, as well as insurance companies.

The insurance industry is attractive to money launderers because insurance products are often sold by independent agents or brokers who do not work directly for insurance companies. The agents and brokers are often unaware of the need to screen clients or to question payment methods. In some cases, such agents and brokers have even joined criminals against insurers to facilitate money laundering.

What is Money Laundering?

Most financial transactions leave a trail that connects a person to the funds. In an illegal financial transaction, money laundering is used to hide the trail.

So, what is money laundering? Money laundering is a process that criminals use to make dirty money—that is, money derived from illegal drug, terrorist, or other criminal activities—clean money, that is, legitimate money.

The term money laundering conveys a perfect visual picture of what actually takes place. Illegal money is put through a cycle of transactions designed to hide the source of the funds and make them clean or legitimate. Money laundering is similar to washing clothes—you put in dirty clothes and after being washed, the clothes are clean. Laundered funds can then be used without restriction.

For example, a life insurance policy that can be cashed in is an attractive money laundering vehicle because it allows criminals to put dirty money in and take clean money out in the form of an insurance company check.

This illegal money is derived from criminal activities such as the following:

• Drug trafficking
• Terrorism
• Illegal arms sales
• Prostitution
• Smuggling
• Counterfeiting
• Insider trading
• Other serious crimes

Why do Insurance Agents Fail?

Possible Signs of Money Laundering in Insurance

Let’s look at some examples of potentially suspicious activities insurance professionals may encounter that could be an indication of money laundering or terrorist financing activities.

• A customer borrows against the cash surrender value of permanent life insurance policies, particularly when payments are made to apparently unrelated third parties.
• A customer purchases a product that appears outside the customer’s normal range of financial means or estate planning needs.
• A customer purchases insurance products using a single, large premium payment, particularly when payment is made through unusual methods such as currency or currency equivalents.
• A customer purchases products with termination features without concern for the product’s investment performance.
• Policies are purchased that allow for the transfer of beneficial ownership interests without the knowledge and consent of the insurance issuer. This would include secondhand endowment and bearer insurance policies.
• A customer is known to purchase several insurance products and uses the proceeds from an early policy surrender to purchase other financial assets.
• A customer uses multiple currency equivalents, such as cashier’s checks and money orders, from different banks and money service businesses to make insurance policy or annuity payments.
• A customer terminates an insurance product early, including during the free-look period.
• A customer designates an apparently unrelated third party as the policy’s or product’s beneficiary.

Among all the things an insurance agent does, reporting such suspicious activities is a the top of the list. However, there is no need to determine whether the transactions are, in fact, linked to money laundering, terrorist financing, or some other crime. That is a matter better left to those with experience in such matters.

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Interested in learning more about this topic? Enroll in Kaplan’s Anti-Money Laundering Rules for Insurance Companies course in our Insurance CE library. Simply visit the Insurance CE page and select your state to get started.