Tuesday, January 27, 2015

Prof. Zigglehoffer - Thank you for the push.

I shuddered. Even though I felt as if all my muscles were frozen, I could feel my body start shaking. My palms were instantly sweaty. Anxiety rose within me.

Professor Zigglehoffer (not his real name) then told me, “Please stand, Mr. Rhoades.” I dutifully obeyed, not certain if my legs would support my trembling body. The professor then asked, “Why did Mr. Jones not have a contract with Mr. Smith.” I cringed.

Here I was, standing in a class of over 100 students, on the first day of Contract Law, a required course in the first semester of law school. My worst fear was happening – I was called upon in class. Two hundred eyes judged me, as well as Professor Zigglehoffer – the tyrant lord of the socratic method.

I replied, with my voice crackling for all to hear, “No contract existed because Mr. Jones did not provide any consideration.” I thought that Professor Zigglehoffer would then permit me to sit down, and that he would move on to question others in the class. But, to my utter dismay, he asked me another question. And another. And another. After what seemed like a decade, the hour had come to a close, and only then did Professor Zigglehoffer permit me to collapse into my chair.

I was bathed in sweat by this point. My mouth was so dry, I was surprised I was even able to speak. My body was exhausted. But, I survived that day. And many others to come. How? Simply this – I persevered. I battled my way through my fear.

As time passed, I came to realize a few things. I uncovered some truths that empowered me to better overcome my fears of speaking in front of others.

I realized that each time I gave a presentation, I then became just a little bit more comfortable with public speaking.

I also realized that at times I would fail. At times I would deliver a poor presentation, or fail to connect with the audience. Perhaps I approached the subject incorrectly. Perhaps my demeanor was not right for the audience. Perhaps I didn’t rehearse enough. Although the times were few, I discovered that I was not perfect. And … I learned that not being perfect was fine.

I also let go of my concern over how others would perceive me. If someone did not like me – did not appreciate me – did not want to do business with me – that was o.k. That person need not be part of MY universe anymore. There were plenty of people who valued me, just the way I was at the time.

Once free of the fear of others judging me, and once free of the chains brought about by my perfectionist nature, with practice I became more and more confident.

And, when thrust into new situations, I pretended to be confident. And, in so doing, I found out that no one knew I was not confident, that time. In fact, by “oozing confidence” (i.e., faking it, to a degree) I actually became more confident.

Today, I give several speeches around the country each year. Often to hundreds of people at a time. And I am not nervous. I have confidence in my own abilities. I prepare well. I rehearse my presentation seven times during the two days before I give it.

While it has been said that 75% of college students (and the general population) fear public speaking, it has been my own experience (from surveys of my students at Alfred State) that about 40% (or a bit higher) possess significant anxiety in class. These students fear being called upon. They fear raising their hand to volunteer to answer a question. They fear being “wrong” in class discussions, or they fear saying something foolish. And they certainly fear getting up in front of the class to give a presentation.

If you suffer from this fear, realize this – you are not alone. Your classmates understand, and nearly all possess compassion. If you stumble, they will help pick you up. They don’t expect you to be perfect. They will admire your courage, as you make progress in overcoming your fears, and as expand your comfort zone ever wider.

What about that student who, on occasion, chooses to demean you? Expresses his or her disapproval of you, in some way. Criticizes you, not constructively. Forget him or her. That person no longer has the privilege of being part of YOUR universe. That person rightfully deserves to be ignored - by you. There are plenty of others in the world - and on campus - that will treasure you for whom you are. Just smile and greet. Sit down beside someone you don't know in a class, and ask that person five questions. Listen. And give that person a chance to get to know you.

Decades later, I suspect Professor Zigglehoffer knew, on that very first day of class, in the very first semester of law school, that I was shy and suffered from social anxiety. And I suspect that he wanted to prove that if I could last an hour under his barrage of questions, utterly nervous the entire time – that anyone could. Or perhaps he was just concentrating on me, alone, knowing that pushing me then would help me later.

I was extremely shy. I had social anxiety, throughout college. I feared being called upon in class. I feared the occassional presentation in front of class. But, I conquered my fears - and you can, too. All you have to do is have courage and dedication to the goal of becoming a better person, a bit each day. With time, you will persevere. As so many students before you have already done. In so doing they acquired new skills which helped them to succeed in their careers in other areas of their lives.

Thank you, Professor Zigglehoffer. For placing me under the spotlight. For the inquisition to which you subjected me that day. For the push.

Ron A. Rhoades, JD, CFP(r) is an Asst. Prof. of Business at Alfred State College, where he now teaches contract law, among other topics in Business Law and financial planning courses. And, he now gives prods and pushes - although (he hopes) not quite as severe as of the variety given by Prof. Zigglehoffer so many years ago.

Monday, January 5, 2015

Should A New, Higher Certification for Financial/Investment Advisers Exist?

The CFP Board's exam and the AICPA's PFS exam are generally viewed as a test of the foundational knowledge one should possess to practice as a financial planner. Similarly, the CFA Institute's (tough) three-part exam leads to the award of the CFA, a prestigious largely investments-focused designation, but not necessarily an indication of wisdom and experience.

Although these broad certifications/designations have their advantages, there exists a strong desire among many to achieve further differentiation by embracing higher standards.

  • First, differentiation would exist as to ethical standards. Many financial advisors and investment advisers desire to distinguish themselves as "bona fide fiduciaries," noting a stricter adherence to non-waivable core fiduciary standards at all times. The fiduciary principles would be better defined, and stricter, than the standards of conduct which most existing organizations currently embrace.
  • Second, differentiation would occur as to possessing true expertise - i.e., possessing experience and knowledge far surpassing the requirements of the CFP(r), PFS or even CFA certifications/designations.

Many solutions exist in the marketplace. At their core, designations and certifications are designed to simplify the shopping for consumers.

Hundreds of designations which exist today include many, many of which are altogether meaningless. While these designations often confuse consumers, the educated media know better.

Only a relatively few certifications and designations possess substance.

It should be noted that those memberships, designations and certifications that truly adopt the highest standards are likely to garner the interest of those in the media - especially the all-important consumer press who inform readers where to look for expert, trusted, and candid advice.

In contrast, existing organizations which do not raise their standards to the highest levels risk both mediocrity and, over time, irrelevance in the eyes of consumer media.

Interest has risen from some corners of the industry in a possible new certification or designation - providing for strict standards of conduct and a high degree of expertise.

It is my preference that current broad-based designations be elevated (and some have undertaken such, to a degree, recently, while others have fallen back), rather than to create a new designation/certification (and, perhaps, create an organization to award such).

However, should a current designation/certification not possess high enough standards, or not be promoted sufficiently in the marketplace, then room likely exists for a new certification/designation in the marketplace.

What would such a new certification or designation or membership entail? I would suggest the initial award of a "higher" certification or designation might include the following three major requirements:
  • First and foremost, adherence by the member/certificant/designee to a bona fide fiduciary professional standards of conduct, as I have written about previously in this blog (regardless of how the fiduciary standard might be applied by regulators or other organizations);
  • Second, an assessment be undertaken in which a very high degree of expertise is demonstrated; and
  • Third, that several (perhaps five or more) years of experience be required - actively working as a personal financial planner and/or as an investment adviser (working in related occupations, such as insurance sales or as a financial journalist, would not be credited toward the experience requirement).
This coming year I will be exploring whether such a (new or enhanced?) marketplace solution should be put into place. As I explore this subject, I'd like to hear your thoughts, including (but not limited to) your answers to the following questions:
  1. What memberships / certifications / designations currently exist which satisfy, or come close to satisfying, the three major criteria set forth above? To your knowledge, are any existing organizations exploring modifications to their standards so that they would rise to the requirements previously set forth?
  2. Should a new certification for highly experienced, bona fide fiduciaries, come into being?
  3. How would a person's attainment of a high degree of expertise - either with respect to investments, or with respect to personal financial planning, or both - best be assessed?
  4. How many years of (relevant) experience should be required?
  5. What additional education, or combination of current educational offerings, be required?
  6. In your view, is there sufficient support for a new organization and/or certification?
Please e-mail your thoughts to me at Ron@ScholarFi.com. (All communications received may influence and be utilized my further writings on this subject; however, submitters' names will not be utilized in any future writing unless permission is granted by the submitter.)

Thank you.

Ron A. Rhoades, JD, CFP(r) serves as an assistant Professor of Business at Alfred State College, where he is the Program Director of its Financial Planning Program. He also serves as Chair of the Steering Committee for The Committee for the Fiduciary Standard. This blog post reflects the personal views of Ron and is not intended to represent the interests of any organization, group or institution with whom Ron is affiliated.