ARE FINANCIAL ADVISORS READY FOR THE “ADVICE REVOLUTION?”
CFP® Certificants in the News
According to a CFP Board article dated December 21, 2021, “The shift in wealth management toward financial advice and financial planning is undeniable. From managing the change in consumer expectations to recognizing the significant value that financial planners offer, many financial firms have accelerated their adoption of business models that place a greater focus on financial planning services.”
This blog will highlight the mushrooming demand for financial planning services from three perspectives, including the:
- Advice Revolution,
- Impact of the Covid-19 Pandemic, and
- “Must-have” credential to compete in the financial planning space.
Quotations in the remainder of this blog are from the December 21, 2021, CFP Board article.
The Advice Revolution
Financial planning is an increasingly important skill for financial advisors. For example, financial advisors surveyed by CFP Board indicate that the number of clients seeking financial advice grew from one in every three clients to one in every two clients in just one four-year period.
CFP Board details this trend as follows “… the movement toward financial planning has been a growing wave. In 2013, financial advisors offered [holistic] financial planning services to 32.9% of their clients. By 2017, that figure increased to 49.6% — a significant jump in the number of financial plans developed.”
The Impact of Covid-19
Financial planning took on a whole new urgency because of the fear of infection and the volatility in the financial markets.
- The heart-stopping 40% drop in the stock market during a six-week span in early 2020, coupled with the all-too-real fear of infection, drove many of us to focus on our financial security and legacy (establishing or updating our wills).
- The safety and convenience of virtual meetings became the new normal for client and prospect meetings.
CFP Board weighed in as follows, “The pandemic only increased this shift [to more financial planning], as the financial planning profession met the COVID-19 moment by responding to a surge of inquiries from new prospects. To meet this demand, financial services firms are hiring more financial planners. Citing one example, Fidelity Investments announced in April [2021] that it planned to hire 1,000 financial planners over the next year.
The “Must Have” Credential
The CFP® mark is the most respected designation for holistic financial planning.1
Here’s how CFP Board sees an opportunity for financial advisors and planners—“As the players within the financial advice industry continue to lead their businesses with financial planning to answer the demands of a changing client base, they face questions of expertise and efficiency in hiring as they try to scale up their offerings to bring in more planning-focused clients. For financial advisors looking to fill these gaps for current and prospective employers, CFP® certification is worth considering as a must-have credential to achieve in the next step on their career path.”
