Collaboration with clients will provide greatest financial planning value: FPSB survey

Collaborating on financial goals with clients and providing objective advice to facilitate decision-making will be “the greatest value” financial planners can provide going forward, according to new research from the Financial Planning Standards Board.

The Denver, Colo.–based organization promotes professional standards in financial planning globally and owns the certified financial planner (CFP) certification program outside the U.S.

Among 4,250 CFPs surveyed across 23 territories around the world, more than half reported that working with clients to establish and attain financial goals, and providing impartial guidance to help decision-making (29% and 27%, respectively) will be the greatest value they can provide to clients in the future.

Additionally, almost one-third of respondents reported being more involved with their clients in managing emotions during the pandemic.

With this transition to more collaborative client relationships, 55% of CFPs surveyed said financial planners must learn more about behavioural finance, and 43% said planners require more education on coaching.

Other topics cited included the need to learn more about aging (68%), estate planning (62%) and investment management (57%).

The need to learn more about aging and estate planning may be related to 61% of respondents envisioning increased demand for financial planning over the next five years as more people prepare for retirement.

About 35% of respondents expected financial planning demand to grow due to younger generations seeking financial planning, increased levels of consumer awareness of financial planning’s value (56%) and the need for professional advice caused by global economic uncertainty (41%).

Given the significance of retirement, CFPs listed retirement security (69%), investment planning (64%), managing wealth transfer to the next generation (61%), and finances associated with aging and long-term care (47%) as the most important issues for clients, the survey said.

The research also suggested a disconnect between potential clients and financial planners, with respondents citing a lack of awareness when it comes to financial planning’s value (79%) as the primary reason people don’t seek financial planning services.

The second most popular reason was a lack of trust in financial advisors, cited by 46% of respondents.

Not only are the dynamics between planners and clients expected to change but so too is the technology used.

Many CFPs surveyed (42%) cited financial technology as the factor most likely to have the greatest impact on how they’ll work with their clients over the next half decade. Further, 70% of respondents perceived technology as allowing them to spend more time on planning.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.