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Un-Titled: Inside the Financial Industry's Name

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The act of naming is truly elemental: it's a predisposition we all share. Yet, while names help to define, specify, and even unite, too much of a good thing can quickly turn sour. What begins as a striving for order can instead produce a thick veil of jargon, with confusion and frustration for all. And while the dividing line may be fine, crossing it is anything but—especially when clarity and trust are at stake.

This tendency toward dizzying levels of lingo is at full tilt in the financial services industry. Unfortunately, a veritable smorgasbord of names, titles and descriptive terms often serves less to clarify, more to muddy. And while a pocket dictionary may come in handy, terms are ever-shifting, titles are constantly reinvented—what was once in stone is quickly replaced. The current state of things begs a few questions, and we're ready for some answers. So let's get to the heart of the matter and find out just what's in a name.

In Discriminate Terms

Especially in recent years, the balanced, well-established titles for folks who help you manage your money—e.g. financial advisor, certified financial planner (CFP), fiduciary—have found themselves increasingly unwelcome. In their place, we’re seeing titles that trend toward opposite extremes of specificity: from "investment managers" and "certified retirement specialists," to "financial life managers" and "financial coaches." While we assume that the former two narrow their focus, the latter leave us guessing. Now and then, names even border on silly: "personal CFO," "financial quarterback," "financial concierge" and "financial guru" are a few choice examples. And while the lists run on and on, the end result is typically the same: Utter confusion.

So let's be upfront: We're not down with the cornucopia of titles for essentially the same service—aiding, advising and guiding clients in financial matters. After all, these titles allude to the various aspects of what an advisor or CFP does every day. At the same time though, we do love how these titles get people thinking, analyzing and taking a deeper look. Knowing the prevailing claims of expertise can lead us to reevaluate our own choices. For while initially, we may see our advisor as just another financial professional, ultimately we need to be assured not only of their qualifications, but also of their investment in our success.

Clarifying Confusion

When clients choose an advisor, they’re investing their life's work in that advisor's expertise. You as a client are banking on the fact that your advisor can go twelve rounds and come out swinging. We think it makes sense, then, that any official-sounding title be backed up with some hard and fast certifications. Sadly though, the financial arena is beginning to feel more like a free-for-all. What we've seen is job titles that are based, not on clearly definable precepts and credentials, but instead on descriptions dabbling more in psychology than finance. The popular term "financial coach" is a prime example.

"Learning to be a financial coach...may be easier for those who are not financial 'experts' since those skills are of limited use in coaching.... [T]he coach is there to listen, encourage, and motivate...keep from giving advice or directing the process...try to help find creative ways to help the individual achieve their own stated goals." — Via University of Wisconsin-Extension

Come again? A financial coach can be devoid of financial skills, shouldn't offer advice, and isn't held to any regulatory standards? Aunt Betty's looking for a new job, and she's a great listener—enough said, we're down with Betty. Seriously though, we find this fringe job title and its description to be nonsensical at best, frightening at worst. An apparent lack of rules could be exploited by shady characters, who could leave you reeling from the loss.

While we readily admit that bad apples exist in all fields of learning, the seemingly loose nature of these newfangled titles leaves a wider opening for error to creep in. So just where do these terms come from? And why is it that people find "financial coach" and "financial life manager" to be more appealing than the tried and true "financial advisor/planner"? It could be that we're always searching for that 'next best thing.' Or, perhaps we put more stock in the name, than in the person behind it.

Superficial Depth

"Your financial life is about your entire life, not just your money"—thus goes the rationale behind updated terminology. Ok, we get that principle. Any financial advisor worth his or her salt strives to pair client goals with smart money moves. Interestingly though, no extraneous title is needed—it's just part of the job. And while the "where your life and finances meet" slogan is admittedly catchy and could sound novel to the untrained ear, in all honesty it’s nothing new. Serious financial advisors have always adhered to this philosophy.

"...the consultative wealth manager's overriding objective is to understand the person and find out what's important and why..."

And this is right in line with research findings:

"A financial life story isn't about money, it's about life. Ninety-three percent of...participants felt the need to share their whole life story, the big picture." — Via Forbes

Over the Under-Simplification

We're among many who have long advocated "quality over quantity, personal focus over the deafening onslaught of useless 'advice.'" That’s a great trend to be part of, and we're glad to see things changing.

"Financial planning today has become less associated with any product or investment type at all and far more associated—as it should be—with individual investor planning and investor needs." — Richard Averitt III, Raymond James Financial Services

So then, why the lingering disconnect between reality and perception? Well, whether we're talking about potential clients or outsiders to the financial world, the prevailing belief is that they just don't register a difference between various financial designations. But does a lack of understanding about an already lengthy list of titles serve as justification to add to it? We'd answer "definitely not." Oddly enough though, that's precisely what some are advocating. Proponents of the "financial life manager" moniker reason that essentially two options exist: 1) "bang your head against the popular position, explaining to clients that you are a 'different' or 'unique' version of a wealth adviser"; or 2) "take a different road and create a new category."

What these folks don’t seem to grasp is that simplicity—when it's done right—naturally begets complexity. One thing’s for sure though: this equation doesn't work in reverse.

Consistently Focused

We have to agree that time-tested titles are on the general side, but that's really to be expected. For while perhaps ideally, "a profession's title should clearly convey exactly what the person does," this theory isn’t always a practical one. Financial advisors wear many hats everyday, much like your family doctor. Surely you'd assume that your general practitioner knows something about every aspect of your health, could spot warning signs and know when to lean on specialists. In the same way, a skilled financial advisor is expected to take a holistic approach, tapping into a deep store of financial knowledge. How could a mere title accurately quantify that kind of expertise?

This core truth remains: an advisor's primary goal is to successfully manage your money. A solid, consistent technique will then help to solidify in clients' minds just what it is that advisors do—trendy titles aside. Advisors are there to share experience and insight, to take the burden off your shoulders, while leaving the final decision to you. And while it's a given that areas of strength will vary, when we draw on differences—in expertise, background, or viewpoint—we bring our best to the table. Implementing new ways of thinking will serve to unite and broaden understanding, help to expand capabilities and potential. And yet, while financial skill and industry know-how are vital, another element is equally crucial.

"What investors want most...is a 'trusted relationship with an individual, not a Web site or a big presence on the television screen. If they can find that trusted relationship, they hold onto that, tightly...that's what you ought to focus all of your time and attention on—building and maintaining that trusted relationship.'" — Via Think Advisor

And here's where the circle completes itself, because "[advisor] practices are strengthened by one-on-one relationships with...clients." If both parties are open to it, the advisor/client relationship can be much like a successful doctor/patient pairing: symbiotic to its core. The entire process is, in the end, all about the client or patient—all about you. And that keeps everyone's focus where it should be. When you gain, everyone benefits, and the cycle goes on.

Up-Front and Centered

In the end, our focus should be on building relationships, not vocabulary lists. Going beyond industry standards and capitalizing on knowledge will always keep the experience unique, individualized, and fancy title free. Of course, that can only come through an advisor really knowing you, what's on your mind and your financial plate—this is way past semantics. So instead of hiding behind titles, we're going to make a name that stands out. We'll keep on striving for excellence, both individually and collectively. Because like any family, together we're far more than the sum of our parts. In fact, when expertise combines, you get a bona fide superpower—a strong, comprehensive knowledge base from which to draw. And in these turbulent financial times, everyone could use an expert in their corner. Confusion, apprehension, mistrust? Let's knock 'em dead. Together, we can go the distance.

• financial advisors
• financial planning