Applied knowledge means practical, relevant, rigorous coursework that delivers utility benefits that increase technical acumen and business benefits that teach you how to communicate the complex with clients and implement it in planning and product decisions.

In this installment of Conversations with the President, I walk through a typical professional’s lifelong learning journey with The College, from the foundational to the advanced knowledge needed to establish a career, grow a business, and serve a client's best interests.

In this installment of Conversation with the President, I explain the mission of the Center, future initiatives to address racial and wealth inequality, and what financial services professionals and the industry at large can do to help.

Many families find the vision of a shared family philanthropic venture appealing, but all too often, the reality of the experience is a far cry from the dream. In this article, I outline the philanthropic journey through which I have accompanied several families and the successful approach through which we together developed a flourishing, multigenerational Family Philanthropic Enterprise.

First, let us look at two common if unspoken assumptions that underlie well-intended but floundering family philanthropy:

The Road to Disappointment #1: We want our children and grandchildren to be philanthropic, just like us. Read: How did such generous people as we are raise such selfish kids?

The initial impetus for family philanthropy often arises from unflattering observations like these: Our children no longer want to sit at the Platinum Donor Table at the Our Favorite Charity Gala where we are always recognized as big donors. What this tells us is that our children have become selfish. We can set them back on the right course by immersing them more fully in philanthropy. Some of our friends have private family foundations, what a perfect solution! The Mom and Dad Family Foundation. Our children will love it!

Almost always, however, they will not. Even worse, the children’s current apathy may turn into hostility, with the demand they spend increased time and effort focused on their parents’ causes, however laudable and successful these charitable efforts may be.

A true Family Philanthropy Enterprise is a process. It is a journey, not an event. At its best, family philanthropy is done “with” your family, not “at” them. Children and grandchildren many times do not enjoy the spotlight because they find themselves once again standing in their parents’ shadow at an event held by an organization to which they have no emotional connection that supports a cause to which they are indifferent.

The Road to Disappointment #2: We are all going to sit down together as a family and decide who we will give money to this year. Read: Dad and I have chosen these four charities. You kids can suggest but not decide how much Dad and I will give each one.

This well-intended approach, like The Road to Disappointment #1, continues to conceive of family philanthropy as hierarchical in organization and operation, with Mom and Dad at the pinnacle. Rather than bringing generations of family together, such an approach is more apt to increase frustrations for all involved.

Changing the Conversation: Impact and the 1040 Foundation. Instead of focusing on “giving away,” families on a successful philanthropic journey concentrate on creating impact significant to both a cause and to the individual family member. This is the essence of what I call the 1040 Foundation. Following is an example of how such a foundation might work.

Mom and Dad (or Grandma and Grandpa) take an annual charitable deduction on their IRS Form 1040 of between $100,000 and $150,000. Based on their income, this is below the percentage rules for charitable deductions for cash gifts to public charities. The donors are deeply interested in seeing their children become more active in philanthropy, but they have experienced frustrations such as those described above. In seeking a means of involving their children more deeply in philanthropy, they consider establishing a private family foundation as some of their friends have done, but those friends have experienced mixed results.

The donors discover another alternative in their church newsletter, which describes how they can establish a donor advised fund within the church’s own foundation. Unsurprisingly, they find the complex tangle of rules involved confusing, and contact their family wealth and estate advisor for additional guidance. After exploring with their advisor how well different philanthropic models match their family’s circumstances and responsibilities, Mom and Dad decide to create the Smith Family 1040 Impact Plus® Fund.

The Smiths invite their adult children and grandchildren to their favorite resort, where they have reserved rooms for everyone for the weekend. Included in the activities is a 90-minute gathering of the adult children on the Saturday morning, during which their advisor will introduce the plan. Having a professional advisor, rather than Mom or Dad, describe the plan helps create a sense of psychological distance, emphasizing the shift from passively hearing about yet another “charity thing Mom and Dad are doing” to a new venture in which every person present will enjoy real, active ownership.

A 1040 Impact Plus® Fund works in two stages: the Seed Stage and the Sprout Stage.

The Seed Stage: The Smiths have five adult children, ages 19 to 28, two of whom are married. Each unmarried child can allocate up to $5,000 to impact something they care about; each married child splits their $5,000 allocation with their spouse, with the couple left to decide whether they wish to combine funds or work separately. Although the Smiths also have grandchildren who will eventually be folded into this enterprise. It is important that the initial stage should concentrate on building the philanthropic skills of the adult children. They will subsequently use what they have learned to inspire and educate their own children.

The ground rules for the Seed Stage are simple, with guidelines such as these provided the adult children:

• Begin with a cause, not an entity. What do you want to see more of in the world, or less of, or ensure is preserved for future generations? A simple exercise is to look at a newspaper and circle in green what you want to see more of, and circle in red things you want to see less of.
• Using a service such as Charity Navigator or your local community foundation, identify nonprofit organizations in your community that focus on your chosen impact area. The only requirement is that the organization must be a 501(c)(3) and qualify for a charitable income tax deduction.
• You can spread your $5,000 impact gift among up to three charities, giving each a minimum of $1,000.
• Once you have selected the organization(s) you wish to fund, complete the 1040 Impact Plus® Grant Request Form, which includes the following information:
  • The name and address of each organization to which you plan to donate.
  • The organization’s Tax Identification Number (TIN).
  • The name of the organization’s contact person.
  • A 250-word description of what the organization does; and
  • A 400-word “passion statement” that expresses why this cause matters to you and how the organization(s) you have chosen will achieve impact with your gift.
• The family will gather annually to review together each member’s Grant Request Form, for each to learn more about what matters to you and about the community organization(s) you have chosen. Each meeting is presided over by the 1040 Impact Advisor, not by Mom and Dad.
  • Your choice is already considered final before the meeting. It is not subject to a vote by anyone else in the family.
  • Each family member is to assume, regardless of what they may privately believe, that others’ choices are made thoughtfully and in good faith. The discussion should be as civil, supportive, and encouraging as possible. The meeting is neither a debate forum nor a competition, and “constructive criticism” is prohibited, as all present have already made their funding decision.
• Shortly after the conclusion of the meeting, we will prepare the appropriate check(s) and gift letters(s) so you can make an appointment to deliver your gift(s) in person. We suggest you invite another family member to an even fuller understanding of your giving choices, with respect to both your cause(s) and the nonprofit(s) whose mission concerns them.
• So, what does all this accomplish? We named this approach 1040 Impact Plus® because it goes beyond identifying worthy causes and writing checks in several ways:
  • Each family member can explore and explain their individual philanthropic goal and journey. This is the most critical aspect of 1040 Impact Plus®, and, perhaps, the most challenging for Mom and Dad. It is important that truly little be “out of bounds” in terms of causes. In the initial rollout of the plan, the advisor must stress to all parties the nonjudgmental nature of this undertaking. The passion statement is important not only as the personal expression of a family member’s deepest concerns, but also as a means of helping other family members develop or deepen their empathy for a cause dear to someone else. Failing to do so is likely to result in donors making allocations not for the purpose of relieving human misery, but out of an impulse to inflict a bit of misery on a judgmental family member.
  • Each family gets to have the visceral experience of impacting something that matters to them.
  • The family acquires a deeper, fuller understanding of (and, ideally, increased respect for) other family members in ways not previously possible; and
  • Financial wealth transcends from the merely material into a tool that makes life more meaningful and joyful for the individual and which enhances intrafamily relations.

Some families, regardless of net worth, retain their Seed Stage Family Philanthropic Enterprise for years. They like its simplicity, the kind of interactions it stimulates, and the sense it offers of making a real impact. Other families, however, prefer to expand their philanthropic efforts into a more formal structure that can be cultivated across generations. Enter the Sprout Stage with the Donor Advised Fund.

The Sprout Stage: The Family Donor Advised Fund (DAF). The family described above kept the Smith Family 1040 Impact Plus® Fund as their philanthropic engine for three years, which translated into six rounds of impact gifts. After the first round, they so enjoyed it (and each other) that they decided to make impact gifts every six months rather than just annually. As the family is geographically dispersed, they held the fall round in person around Thanksgiving and the spring round virtually via Zoom and an accessible document-sharing program like Google Docs or DropBox.

The success of this process prompted the family to try something “more permanent” in structure. Mom and Dad want philanthropy to be part of their legacy for children, grandchildren, and beyond. After discussion with their advisor, the family decided to establish a DAF using the Smith Family 1040 Impact Plus® Fund name. While the details of this process will be reserved for another column, two key factors enter into this decision:

• The sponsoring organization that is to hold the family’s DAF must have a broad mission and purpose statement, so that the diverse interests of the family can be accommodated now and in the future; and
• A clear methodology must be laid out to establish a family advisory board and assign key roles and a succession plan for those who hold them.

Although Mom and Dad initially fund the DAF with $500,000, all fund assets are considered communal family property to be used for the purpose of supporting causes important to individual family members. This marks a major shift in mindset for Mom and Dad and for all family members who have come to appreciate how much their philanthropic enterprise has benefited them as individuals as well as their relationships with the other family members. Decisions around the philanthropic dollars are made by all involved adult family members. Structurally, the Sprout Stage requires the coordination of two administrative structures, one internal, the other external.

Internal: The DAF is governed by a board of advisors composed of all adult family members. The advisor serves in an ex officio capacity, convening these meetings and ensuring minutes are kept to record important decisions. One member of this board also serves as a liaison to the investment manager.

External: Every DAF has a sponsoring organization, and it is in the interest of both the family and that organization to identify which family members will serve as contact persons. Two members of the board of advisors serve in this capacity, one as the contact person to the sponsoring organization, the other as the successor to that position, who shadows the contact person. The contact person’s term of office is two years and when that term draws to a close, the successor assumes that role.

Although membership on the board of advisors is mandatory for adults who wish to participate in this enterprise, service as investment manager liaison, and as sponsoring organization contact person is encouraged but not required. Should no family member be available to assume such responsibilities, the advisor may do so in their stead.

In addition to having a more complex philanthropy structure than the Seed Stage, the Sprout Stage also expands the philanthropic experience to include grandchildren on an age-appropriate basis. The Grandchildren’s Philanthropic Enterprise occurs once a year around Thanksgiving or whenever the in-person philanthropic round is held. Grandchildren are eligible to request grants under terms like the adult enterprise:

• Elementary school-age: $100
• Middle school-age: $200
• High school-age: $500
• Age 18-20: $1,000
• Age 21-24: $2,000
• Age 25 and up: $5,000

With its extension to another generation, the Sprout Stage philanthropic process needs to be a bit more complex because of its educational purpose. Minors are required to do a brief, ageappropriate presentation to the extended family attending the annual Family Philanthropic Enterprise meeting. This is a tremendous learning opportunity for all. The little ones need some help from their parents, a process parents find to be rich with opportunities to deepen their bonds with their children. I have had the joy of watching a 5-year-old present his allocation of $100.

Using a white posterboard covered in glued-on pictures (and with a little help from his mom), he described his desire to impact the local volunteer fire company because “they protect us from fire.” The smile on his grandfather’s face at hearing this little boy’s passion concerning his chosen cause was filled with transcendent joy and with hope for the future of his family. Older children have also impressed their family with the unexpected sophistication in problem-solving they reveal. Several cousins in their late teens, for example, combined their allocations so they might have a greater impact on a cause that mattered to them all.

Once the family has enjoyed a successful DAF experience, they may wish to move from the Sprout to the Seedling Stage to establish a private family foundation that will expand even further the family’s impact on their community and on each other. The journey to this considerably more complex destination must never be rushed. Each of the many aspects involved in running a family foundation must be explored thoroughly with the guidance of the advisor and funding area-appropriate professionals.

Like parenthood itself, growing philanthropy within a family is a process that cannot be hurried. A family philanthropic enterprise is most successful (and enjoyable!) when its members mutually encourage the gradual but real unfolding of independence and empathy over time. Our approach is designed to ensure the family philanthropic journey is less a Road to Disappointment and as much a Highway to Heaven as circumstances permit.

Tim Belber is adjunct professor of estate planning at The American College of Financial Services and holds the Charles E. Drimal chair in estate planning. He teaches in the Chartered Advisor in Philanthropy® (CAP®) program. Belber is the author of “The Middle Way: Using Balance to Create Successful Generational Family Wealth Plans.” He has authored numerous articles and has been quoted in periodicals including the Wall Street Journal. He is a member of the Legacy Wealth Coach Network, a founding member of the Collaboration for Family Flourishing, and a dean for the Purposeful Planning Institute. He can be reached at tim.belber@theamericancollege.edu. 

Which designation to get depends on many factors, but there is guidance in the form of the National Health and Retirement Study, which is intended to provide insight into the lives and needs of people over the age of 50. The study looks at health care, housing, assets, pensions, employment, and disability factors.

Armed with the information from this study, you can begin the process of deciding which designation is right for you. However, there are many other factors to consider as well, including the cost of training, the time commitment required for continuing education, and your specific career goals.

In this article, we’ll take a look at some of the common professional designations for financial planners looking to become retirement planning experts.

Retirement Planning Designations

There are several reasons for financial professionals to become accredited in retirement planning. For those just starting their careers, it can provide proof of knowledge and demonstrate a level of commitment to the profession. These reasons also apply when seeking a shift in job roles, as the earned credentials work as a form of shorthand that says, “I know what I’m talking about.” And lastly, for those seeking a promotion, earning additional certifications shows your employer you are serious about professional growth while also demonstrating that you are an expert in your field. 

 
Retirement Income Certified Professional^® (RICP^®)

An RICP^® specializes in retirement income planning and typically helps retired people use their assets to live comfortably in their retirement years. This designation, offered by The American College of Financial Services, is meant for financial professionals who already have a broader designation, such as a CERTIFIED FINANCIAL PLANNER^™ (CFP^®),  and the experience and expertise that comes along with it.

To be accepted to the RICP^® program, applicants must have three years of financial planning experience. The program is self-guided, with three online courses followed by an exam at the end of each course. To maintain the credential, RICP^®s must complete 15 hours of continuing education every two years.

Certified Financial Planner^™ (CFP^®)

A CFP^® offers a range of financial planning services, including investment planning, retirement planning, insurance, and more.

The CFP^® designation has been called the gold standard for the industry. Among the general public, it is one of the most widely known. It is also challenging – the national average exam pass rate is 62% (though CFP^® Certification Education programs offered through The American College of Financial Services boast higher student pass rates than the national average). A bachelor’s degree from an accredited college or university is a prerequisite, and training must be done through a CFP Board registered program. Coursework typically takes between 12 and 18 months to complete. Annual training programs are required to maintain certification.

Chartered Retirement Planning Counselor^® (CRPC^®)

Unlike the CFP^®, a CRPC^® concentrates on retirement planning. The program leading to certification provides successful graduates with expertise in the entire retirement planning process, from setting financial goals to income streams to estate planning.

After the designation has been granted, it is valid for two years. To renew, you must refresh your training.

The CRPC^® can be started at any time. Once enrolled, you must pass the final exam within one year.

Certified Retirement Counselor (CRC)

Becoming a CRC requires two years of experience related to retirement planning, in addition to holding a bachelor's degree from an accredited college or university. The certification does not require formal study or coursework before writing the exam, although there are study guides and materials available. That doesn’t mean, however, that this is an easy designation to achieve. The exam takes four hours and includes 200 questions.  

Retirement Management Analyst (RMA)

Also called a Retirement Management Advisor, this designation focuses on building custom retirement income plans for clients with a focus on mitigating risk.

Prerequisites for becoming an RMA include three years of financial experience. Alternatively, having a CFP^® or CFA^® designation also qualifies a person for the certification. Earning the designation requires completing an online course, a capstone course, and passing an exam. Once registered for the program, you have two years to complete it.

Chartered Retirement Plans Specialist^® (CRPS^®)

This designation is a bit different from the others, as it denotes a person who focuses on creating and maintaining retirement plans for businesses. As such, clients are businesses rather than individuals.

The designation, earned by passing an exam, is good for two years. After enrolling in the certification program, candidates have one year to pass the exam. To maintain the designation requires 16 hours of continuing education every two years after the initial designation is granted.

FAQ

What is the most difficult professional exam?   

The Chartered Financial Analyst® (CFA®) designation is considered the most difficult to achieve. It involves 19 months of self-study and three exams.

Is getting a CFA^® worth it?  

Earning your CFA^® can signal to employers that you have the work ethic and commitment necessary to perform the job well. It also can give you the required training to specialize in investment analysis and portfolio strategy. Additionally, a CFA^® designation often comes with a starting salary above $90,000.

What is the easiest financial designation to get?  

Each designation requires time and dedication to learning the subject matter. None are especially easy, although with significant financial experience and the associated knowledge, achieving a designation becomes easier, as you’ve likely already learned portions of the information through encountering it in professional situations. 

More on Retirement Planning:

• Get specialized retirement planning knowledge with our RICP® Program.
• Get the details of our ChFC® Program.
• See our CFP® Certification Education Program.

In this installment of “Conversations with the President,” I take a look back at where the profession and The College has been throughout our history and where I see the profession, and The College, going in an ever-changing landscape.

Some 1,300 miles southwest, Tulsa’s Greenwood District was built "for Black people, by Black people" just after the turn of the 20th century. Black entrepreneurs flocked to Greenwood Avenue, believing there was economic strength in numbers. By pooling resources, "Black Wall Street" flourished, even if its dwellers became increasingly isolated and segregated by a railroad, where standing on the wrong side of the tracks put a successful Black in the crosshairs of Jim Crow oppression.

Unlike Wall Street, where success brought greater access, opportunities, and the early formation of patriarchal dynasties, success on Black Wall Street brought suspicion, jealously, rage, racism, and eventually riots.

While the Greenwood District burned, the Financial District prospered. Fifty years after the Greenwood Massacre, growing up in the segregated South far from lower Manhattan, my eyes saw disparate Americas simply while tagging along as my father drove my mother to work. Now, post-segregation, and a century after Greenwood went up in flames, race still defines the individual perspectives of American exceptionalism.

Last June, following the death of George Floyd on my birthday, I shared my thoughts on America’s relationship with race – a complicated, imperfect journey of divergent interests, bouts of abject failure, but also real progress for some Blacks, who have risen to positions of power and prestige often through the guidance and advocacy of white mentors and sponsors.

Yet, success has still reached too few. Those stories are the exception.

Since then, these injustices have continued against Blacks, Asians, Hispanics, and others based on ethnicity, gender, economic standing, and sexual orientation. Despite weeks-long marches, sermons preaching peace, and corporate America’s resonance to this national issue, cruelty remains in vogue, and wealth disparities remain fixed in a system still benefitting the same glad-handing, access-selling, and multi-generational privilege. Wealth still begets wealth.

Wealth touches so many parts of equality – wages, homeownership, community policing, and access to quality healthcare, as well as long-term financial literacy and planning. It’s a big problem, but as evidenced by the above tale of two cities, it’s not new. Solutions always seem driven by a PR newswire, or a success story to share with shareholders, and they’re typically funded by fleeting capital and organized in silos.

In the months following the national awakening to these issues, I and our team at The American College of Financial Services did a lot of soul searching and a lot of conversing with each other, our colleagues, and our industry peers. We were intentionally deliberate and thoughtful in building a research-driven, applicable, and executable plan to drive sustainable, economic change in underserved and underrepresented communities. I thank our entire College community for their work, support, and encouragement, as well as The College’s Board of Trustees, President’s Roundtable, and President’s Advisory Council, which have not only offered strategic counsel, but have opened their networks to help us engage in productive dialogue across the financial services industry and given of their treasures.

As an accredited, non-profit institution serving an industry responsible for fostering the generational wealth-building of predominantly white families, it’s been fascinating, and heartening, to see the industry’s circuitous, complex reckoning with its role in the wealth gap, but also to hear leading voices share their voyages to effect lasting, economic change for the underserved and to uplift diverse perspectives in this profession.

Many of these leaders believe in our plan – a development that continues to yield reaffirmation and forward momentum just one year after our team’s first internal discussion. In that time, we’ve achieved so much, including:

• The creation of Four Steps Forward, a big, bold plan to promote upward mobility and wealth building, starting first with Black communities across America. It’ll define an approach that we’ll apply to other groups in need.
• The formation of The American College Center for Economic Empowerment and Equality, which is destined to become the flagship center for research, thought leadership, curriculum and course development, programming, and scholarships aimed at closing the wealth gap and cultivating lasting relationships between financial services and all underserved groups.
• The hiring of the Center’s inaugural Executive Director, Karim Hill, who brings decades of financial services and community-corporate partnership experience investing capital to uplift underrepresented and underserved populations.
• The development of a robust, engaging website, www.theamericancollege.edu/equality, to broadly articulate the Center’s path forward and engage partners who will assist us along the way.
• A partnership with The Society for Financial Education and Professional Development to amplify financial education and economic mobility programs with the next generation of Black leaders at Historically Black Colleges and Universities.
• The launch of a research project on trust between Black women and financial services, with a preliminary report expected later this summer.
• The beginning of our work on the curriculum for an executive leadership program. We plan to enroll our first cohort for a Q1 2022 start.

We’re just scratching the surface, but we aren’t in a rush. I’m as eager as anyone to narrow the gap, but I’m more interested in the long-term solutions that close it. Today’s disparities weren’t caused by a few bad apples or propagated by political whims; they’re so deeply embedded in our system, that Band-Aids are no more than concealer.

To follow the clarion call of former Supreme Court Justice Thurgood Marshall, we must express the poised urgency that moves us forward with intention. To actually “do better,” we must embrace that there’s no other choice. That in America, we can’t allow some to traverse sidewalks as an avenue to success, while others of different cultures and creeds lay face down in their footprints.

We can’t be okay with unequal pay for equal work. We can’t shrug our shoulders at the real, lasting effects that wealth disparities have on educational disparities, longevity, generational divides, and public trust. And we can’t expect to fix all of this in a week, month, or year.

Sustainable change takes time. As I wrote last June, "As a nation, we start conversations on race I don’t think we ever intend on finishing. This time must be different."

One year later, I believe it is.

And that is just one cemetery. Dotting countrysides and hugging cityscapes sit the plots of military veterans, bonded by service and unique in their stories. Many were called to service, with high school dropouts linking arms with Rhodes scholars, those with generational linkages to servitude covering for their fellow cadets. Military members are truly all in this together.

We owe these military men and women such thanks and grace; both those who have returned home from war, and those who perished in service to something bigger than themselves. Memorial Day is a calendar reminder that we all need to put the small things in perspective of those who fought the battles for our freedom, safety, and security.

The American College Center for Veterans Affairs aims to do its part through educational support and career opportunities in the financial services industry. Last year, while restricted in our in-person fundraising by the COVID-19 pandemic, 249 donors—including 112 first-time donors—contributed to the Center and helped us award 250 scholarships, which was a 100% increase in scholarships from the previous year! Many of the Center’s donors were inspired by Campaign: Gratitude, a video storytelling series that told the captivating, heroic tales of military heroes who have returned home to earn rewarding careers in financial services, all thanks to the generosity and support of our donors, and the work of our Center and College family.

This year, the 7th annual Clambake and Soldier-Citizen Award returns with a virtual event on September 9, and a Veterans Symposium is being planned for November 10. We thank you in advance for helping transform the lives of our active-duty service members, veterans, and their spouses.

This weekend, as we celebrate America and all its beauty, remember those who stood, and still stand, on the front lines to forever cement the majesty that is America.

Happy Memorial Day.