© 2020 Arizent. All rights reserved.

CFP Board Survey: Clients Prefer Comprehensive Financial Planning

Register now

American investors say they are looking for holistic financial advice from advisors with a financial planning certification, according to a survey by the CFP Board of Standards.

The online study was conducted by research firm ORC International, which surveyed more than 1,000 Americans 18 years of age or older.

About 70% of those surveyed said they would prefer to work with a financial advisor who provides comprehensive financial planning services, compared with 30% who said they want to work with someone who specializes in a single area, such as retirement. 

“As Americans’ finances become more and more complex, they are turning to advisors who can partner with them, look at their total financial picture, put all the pieces together and provide a comprehensive financial plan,” CFP Board CEO Kevin Keller said in a statement.

The discussion may be academic for many of the respondents: Only 41% of those surveyed reported having ever worked with an advisor. Yet nearly half of those surveyed (48%) said “strong knowledge of financial planning” would be most important to them in choosing a financial advisor -- and 64% of those between the ages of 18 and 24 said it was most important.

The CFP Board was also, naturally, concerned with the value of certifications. The survey found 84% of those surveyed said that certifications play a role in choosing someone to work with; 87% said they would feel more confident working with someone with a financial planning certification -- and 68% preferred working with someone whose certification or designation demonstrates knowledge of multiple financial areas, such as investments, taxes, insurance and budgeting.

Quick Tips

Here are five tips from CFP Board Consumer Advocate Eleanor Blayney for taking into account investors’ total financial situation.

1. Learn about the client’s financial situation over time. Ask about the client’s past (what they have done), present (where they are now), and future (where they want to be). Looking at the client’s financial situation in the past is especially key, as past behavior is often a predictor of future behavior.

2. Keep all areas of financial planning in mind. From education planning to debt, it is important to get status updates from the client in each area of financial planning.

3. Ask for the client’s tax return. Tax returns are a fundamental diagnostic tool for advising an individual. Even if an adviser isn’t preparing the client’s taxes, the tax return is tremendously important in providing the adviser with an overview of a client’s finances.

4. Ask the “5-Ws” when considering financial resources. Discussing key details with the client, such as why a resource is needed and who will own that resource, will help an adviser evaluate whether it’s the right fit for the client.

5. Put the interests of the client first. Advisers who act as fiduciaries should take into account a client’s entire financial situation when providing guidance. In particular, CFP® professionals are obliged to uphold the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence. 

Read more:

For reprint and licensing requests for this article, click here.