Not All Financial Advisor Accreditations Are Created Equal: IWI

What You Need to Know

The organization updated its flagship Certified Investment Management Analyst certification program.
Advisors (and clients) should be selective about the designations they pursue.
The payoff to earning a new designation can be huge, especially among advisors courting wealthy prospects.

The Investments & Wealth Institute, a nonprofit financial advisor education and accreditation organization, recently updated its flagship Certified Investment Management Analyst certification program.

According to the IWI’s announcement, changes to the learning requirements for the CIMA certification, the curriculum taught by the institute and its educational partners, as well as revisions to the final exam itself will go into effect in August.

In an interview with ThinkAdvisor, IWI CEO Sean Walters said the alterations underscore an important lesson: Not all advisor designations are created equal, and any certification program or accreditation body that doesn’t evolve and open itself up for clear-eyed analysis about the potential for improvement is falling short of its obligations.

The IWI’s three primary certification programs — the CIMA, the Retirement Management Advisor and the Certified Private Wealth Advisor designations — are all approved by the ANSI National Accreditation Board, which is the U.S. arm of the International Organization for Standardization.

“What this means is that our programs are closely scrutinized and approved by the leading accreditation organization in the country,” said Walters, who has led the institute for nearly two decades. “You might be surprised to hear it, but out of more than 200 designations that are used by financial advisors here in the U.S., I believe it is still fewer than 10 that meet this standard. In fact, our CIMA designation was the first U.S.-based advisor certification to earn that standard, back in my second year as CEO.”

Walters, who credited his predecessor for that particular point of success, said that ultimately his job as CEO is to make sure that the organization’s certifications are viewed as standing among the most important and sought-after accreditations in the advisory industry — among both the investing public and advisors themselves.

How to Update an Accreditation

The CIMA updates have been derived, “as always,” Walters noted, from a painstaking examination of the knowledge and skills needed by today’s most advanced financial planning and investment consulting professionals in order to ensure the certification remains on the leading edge of technical portfolio construction and risk management.

To this end, the IWI collaborated with HumRRO — a nonprofit test development company — on a full-scale, scientifically administered job task analysis study meant to identify areas in which advisors are being called upon to do more for their clients than the current CIMA curriculum reflects.

Specifically, the CIMA job analysis asked 300 investment practitioners to rate a series of knowledge and skill statements using metrics by importance, time spent performing a task, ability required for tasks and relevance of certain knowledge required to perform the job. In turn, the CIMA Certification Commission adjusted the curriculum and exam blueprint.

As before, the updated CIMA certification teaches and tests advisors on creating, managing and evaluating investment strategies across model portfolios, target-date funds, exchange-traded funds and index funds. But there is now a deeper focus on topics such as when and how to incorporate alternative investments into high-net-worth client portfolios — and how to build proper investment policy statements for institutional retirement plans.