Dragons nest (it's been a while since I played that game) has this implemented perfectly. It has two selections in its title menu, the first selection is the title everyone see's and the second selection is your battle stats title which will bestow upon your characters title bonuses. It's a nice system cause people would wear the title they want people to see but upon character examination others would see your battle title and its corresponding stats.

I think this fixes people's "need" to have a title they like as opposed to everyone wearing the same title because of bonuses.

I would like a system like this implemented because it was a big incentive for me to do things in that MMO whereas here I have turned off my title HUD option because I see no use for it...it's just extra screen clutter for me.