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Demand For Advisors at a High, but Conflict Concerns Push Consumer Trust to a Low

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BOSTON -- More Americans than ever before are turning to financial professionals to help them devise an investment strategy and plan for retirement, but far fewer believe advisors consistently act in their clients' best interest than just five years ago, according to a new survey from the CFP Board.

That poll, conducted in June and released just ahead of the Financial Planning Association's annual conference here, found that nine of 10 respondents said that advisors should put their clients' interests ahead of their own.

And yet, 60% said that they believe that advisors prioritize their companies over their clients, up from 25% in 2010.

To help close that gap between investors' expectations and their perception of the advice industry, the CFP Board has been advocating for policies to elevate the standards of conduct for financial professionals, including calls for regulators to impose more stringent fiduciary standards on brokers and other advisors.

But the board's primary mission remains the promotion of the CFP credential as the gold standard of financial advice, a designation that carries its own set of fiduciary obligations and seeks to set advisors who have completed the certification apart in the eyes of investors.

"Our goal is to make the CFP marks the must-have marks for not only those that are seeking advice but of course for those that are financial advisors that give advice," Rich Rojeck, chairman of the CFP Board's board of directors, said on the sidelines of the FPA conference. "That's our mantra, that the CFP marks are the must-have designation."


By the end of the year, Rojeck expects the number of CFP certificants to pass 73,000, which roughly translates into a 25% share of the advisor market, according to data from the market research firm Cerulli Associates. "We're very proud of that," Rojeck says.

And the CFP Board's latest survey indicated a growing appetite for professional financial advice, with 40% of respondents saying that they work with an advisor, up from 28% in 2010. (For the purposes of the survey, the term "advisor" was broadly defined to include brokers, investment advisors, insurance agents and financial planners.) Of the respondents who said that they do work with a financial professional, 68% said that their advisor is a CFP, and 21% said that they don't know.

That last figure is important. Boosting awareness of the CFP certification -- to help distinguish CFPs from the alphabet soup of other designations that pervade the world of financial advice -- is a central goal of the board, and the driving force behind an ongoing marketing campaign that's set to resume in earnest this week.

"Starting today, and really for the next couple of months, you'll be seeing we're back on the air," says CEO Kevin Keller, touting media buys on NPR, ESPN Radio and several national cable stations that carry the singular goal of raising what the board calls "unaided awareness" of the CFP designation. That metric evaluates the proportion of the target demographic -- affluent consumers in the 35-64 age range with a certain set of personality characteristics -- who identify the CFP certification when asked, with no coaching, what professional designation comes to mind when they think of the financial planning industry.

The CFP Board's campaign launches today on the radio, and a week later spots and branding placements will begin airing on channels such as Fox News, ESPN 2 and the Golf Channel.


When the board first embarked on its marketing campaign in 2011, the research firm Ipsos gauged unaided awareness of the CFP credential at 17%. Today, that figure is 34%, and what the organization calls total brand awareness -- that is those consumers who can name the CFP certification cold, and those who recognize it after a prompt -- stands at 85%, close on the heels of the awareness level of the CPA designation for accountants.

However, even as the campaign touting the CFP distinction presses on, the board recognizes that challenges remain concerning the pipeline of younger advisors needed to replace those who are approaching retirement, particularly as the demand for advice continues to rise. Keller pointed out that there are more CFPs over the age of 70 than under 30, and Cerulli has projected that the overall advisor workforce will contract by some 18,000 advisors over the next five years.

"Whether or not it's exactly right, it's probably directionally right, right? So we know that's a challenge that we've got a shrinking labor force for an increasing consumer force," Rojeck says.

"There's an increasing proclivity to, you know, work with an advisor, and yet the advisor force is shrinking and too many of them are old, pale and male," he adds. "In terms of diversity, we're not highly diverse. You can walk the halls of this conference and see that."

At present, the board estimates the advisory workforce at around 23% female, 6% black and 6% Hispanic.

Rojeck and Keller frankly acknowledge that those figures are hardly representative of the country's population, and are encouraging firms to do more to diversify their ranks.

The CFP Board continues to promote its women's initiative launched in 2013, through which it is pursuing a variety of industry outreach and diversity programs. Keller indicated that the board is evaluating ways to extend those efforts to encourage more minorities to enter the advisory trade, and sees growing support for that initiative around the industry.

"Increasing the diversity has always been a moral imperative," Keller says. "Increasingly, I think firms see it as a business imperative, just as an absolute requirement going forward."

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