Retirement Income Designations ? Which Should You Choose?
With more than 50 certification programs based on the withdrawal phase of the planning lifecycle, advisors are faced with a paralyzing choice about which designation provides the most valuable curriculum. The issues surrounding withdrawal planning differ starkly from those encountered during the accumulation phase. An April 2013 report by the Consumer Financial Protection Bureau highlighted the consumer confusion over this issue. This confusion undoubtedly extends to financial advisors as well.
Let’s look at which programs are best positioned to allow advisors to guide their clients through retirement. I will highlight three of the more prominent and rigorous programs aimed at building knowledge about retirement income. These include the International Foundation for Retirement Education’s (InFRE) Certified Retirement Counselor® (CRC®), The American College’s Retirement Income Certified Professional® (RICP®), and the Retirement Income Industry Association’s (RIIA) Retirement Management AnalystSM (RMASM).
Full disclosure: I am personally involved with two of these designation programs. I am employed by the RICP® sponsoring organization and contribute to its curriculum. I am a former curriculum director for the RMASM, and I still participate in educational programs.
Introducing the designations
Interest in retirement designations is growing as more Americans find themselves near retirement and responsible for developing retirement income strategies. Planning for retirement income is fundamentally different from accumulating assets, as retirees quickly discover. Retirement is not about maximizing risk-adjusted returns; it is about meeting spending goals over an uncertain lifetime. Traditional concepts like modern portfolio theory have very little to say about meeting retirement needs.
Basic facts about three of the most promising designations are included in Table 1. I will provide more specific details about each designation.
Among these designations, the CRC® is the oldest and most established, with 1,872 current designee holders. The RICP® is the newest designation — its first designations were awarded this year. Nearly 3,000 advisors are currently working their way through the program.