Are You a Self-Proclaimed or a Recognized Expert? Part 2

Not all advisors can be experts at a level that can survive the scrutiny expert witnesses must endure, but an understanding of expertise in the legal and academic sense of the term holds lessons for all advisors, no matter how advanced their current practice.

Bodies of Knowledge for Determining Expertise

In the previous article, I outlined the three bodies of knowledge used to determine an advisor’s claim of expertise:

1. Rule 702 of the Federal Rules of Evidence
2. The Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals
3. The Cambridge Handbook of Expertise and Expert Performance

Rule 702 regulates and governs the admission of expert testimony, the U.S. Supreme Court clarified these standards in Daubert, and The Handbook is a compendium of current and historic research compiled by leading authorities that have examined and tested methods to evaluate the characteristics of experts.

Relationship Is a Bonus, Not a Reliable Criterion

Plan sponsors have a full plate of obligations and pressing corporate objectives that take precedence over the retirement plan. To most “C” level executives, their appointment as a fiduciary on the retirement plan is a black hole that drains valuable resources. As a result, there’s high demand for outsourcing many fiduciary duties to an advisor.

Plan sponsors who hire advisors on the basis of high entertainment value and little else will find the “good ole boy” approach passe, obsolete, and ineffectual.

Steps to Elevate Your Position as an Expert

1. Choose a Specific Domain to Master: Develop expertise in a specific area rather than being a generalist
2. Publish or Perish: Write technical articles at least once a year in peer-reviewed journals
3. Secure Strategic Speaking Opportunities: Target industry conferences focused on technical topics
4. Secure Designations: Domain-related designations that are difficult to obtain offer premium value
5. Put it in Writing: Develop a curriculum vitae and post it on your website
6. Develop Documented Processes: Leverage web-based fiduciary governance systems
7. Create a Formal Engagement Agreement: Reflect services rendered, fees charged, and fiduciary status
8. Two Heads Are Better Than One: Create opportunities for team approaches
9. Target Marketing Efforts: Ensure your clientele reflects your subject matter expertise
10. Protect Your Reputation: Obtain and review personal comprehensive annual background checks
11. Insure Your Claim of Expertise: Present certificates of insurance with affirmative fiduciary coverage
12. Practice: Elite experts engage in meaningful and continuous practice