New Research Reveals Focus on Financial Planning in a Changing Landscape

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Sep 18, 2024, 11:00 ET

Financial planners express a desire to adapt their businesses and processes to meet the evolving needs of current and future clients.

DENVER, Sept. 18, 2024 /PRNewswire/ -- As the financial planning profession faces myriad changes in industry, global, and client trends, financial planners are preparing to face them head-on, according to recent cutting-edge research by the Financial Planning Association^® (FPA^®) and Allianz Life Insurance Company of North America (Allianz Life). The research reveals that the future changes financial planners anticipate making indicate a stronger focus on their relationship with clients. Among the findings, 74% will invest more time in managing each client relationship, while 67% will evolve their business model to accommodate more clients who view planners as collaborative partners.

"Financial planning is a young but rapidly evolving profession due to the growth of awareness about the importance of planning for long-term financial objectives and various external factors, including advancements in financial technology and the increased diversity of clients," said 2024 FPA President Claudia Kane, CFP^®. "This important research uncovers the perceptions of financial planners as to how they may need to adapt their businesses and client engagement due to the changing landscape in the years ahead."

In June 2024, a study was conducted with 387 financial planners to gather insights on the evolving trends, potential implications, and how firms will respond to change. The primary finding indicates that planners aim to be more client-centered and collaborative in their approach to the planning process, while also adapting their businesses and operations. This client focus is of utmost importance, as demonstrated by two central findings:

88% of planners plan to learn more about their clients' values and beliefs to better incorporate these into financial plans, which demonstrates a deep commitment to tailoring financial plans to what's most important to clients.

A significant percentage of planners, particularly 73 percent in specialized firms, agree that they will need to adapt their business model to cater to more clients who see financial planners as collaborative partners. The data also indicates that planners with less than five years of experience are more likely to evolve their businesses than those with 15 years or more of experience (74 percent and 63 percent, respectively).

The research highlights the strategies planners will use to address the changing landscape, including the increasing importance of proactive communication in being truly client-focused. However, when combining this new research with the Allianz 2024 Annual Retirement Study* of investors, the data points to an apparent disconnect today: financial planners are significantly more likely to report discussing various financial concerns with their clients, while investors report much lower recollections of discussing these topics.

For instance, 91% of planners say they are likely to discuss concerns about running out of money before they die, while only 28% of investors indicate that they have talked to their financial advisor about it. Relatedly, 94% of planners say they are likely to discuss how best to take distributions from their savings for retirement income, and only 32% of investors say they have had this discussion.

"This important research complements work Allianz Life has done to better understand clients' evolving views on what they are looking for in a financial professional," said Eric Thomes, Chief Distribution Officer, Allianz. "The need for collaboration and a values-based approach is consistent with what consumers are telling us, and speaks to the opportunities and challenges the coming years will bring as new generations of clients and financial professionals enter the market. But clearly the one thing that is not changing is that people need guidance to find their way to their optimal retirement reality, and we're proud to partner with FPA to help equip financial professionals for what comes next."

Adapting Processes and Teams

76% of planners are committed to broadening their approach to incorporate a wider range of client needs.
92% of planners prioritize enhancing their technical skills and those of their teams to better serve clients.
81% of specialized firms are focused on building teams with diverse skill sets to support a broader range of client needs. Similarly, 81% of specialized firms agree they will deliver more specialized planning to support the unique needs of specific populations.

Diversifying Teams and Clients

Recruiting diverse planners (71%) and serving a more diverse client base (65%) are deemed two of the driving forces behind the need for change.
Younger planners (Millennials) are more likely to anticipate evolving their business models to meet the needs of a diverse client base and to work collaboratively with clients (83% vs. 61% for Boomers).

Factors Driving Change

Planners identified several key forces driving change, such as the growing complexity of regulatory requirements (82%), the need to engage younger generations in financial education (86%), and the increased perceived value of financial planning (89%). These factors shape how planners approach their work, client engagement, and adjustments to their business models and service offerings.
Only 8% of planners have made significant changes to their financial planning approach, with the majority citing time constraints (48%), competing priorities (50%), and a lack of systems (34%) as the most significant obstacles.

Among the 387 survey respondents, 66% were male and 33% were female, while 57% reported having 15 years or more of experience. Firm owners and principals accounted for 49% of respondents, and 54% managed $100 million or more in assets under management.

For more details on the research findings and their implications for the financial planning profession, please visit www.engage.financialplanningassociation.org/profession-in-transition.

* The Allianz 2024 Annual Retirement Study, conducted online in February and March 2024 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k+.

About the Financial Planning Association
The Financial Planning Association^® (FPA^®) is the principal membership organization for CERTIFIED FINANCIAL PLANNER^TM professionals and those engaged in the financial planning process. FPA is the CFP^® professional's partner in planning by helping them realize their vision of professional fulfillment through practice support, learning, advocacy, and networking. Learn more about FPA at financialplanningassociation.org.

About Allianz Life Insurance Company
Allianz Life Insurance Company of North America, one of the Ethisphere World's Most Ethical Companies^®, has been trusted since 1896 to help millions of Americans prepare for financial uncertainties and retirement with a variety of innovative risk management solutions. In 2023, Allianz Life provided additional value to its policyholders via distributions of more than $13.73 billion. Allianz Life is a leading provider of fixed index annuities, registered index-linked annuities, and fixed index universal life insurance. Additionally, Allianz Investment Management LLC (AllianzIM), a registered investment advisor and wholly owned subsidiary of Allianz Life, offers a suite of exchange-traded funds (ETFs). Allianz Life and AllianzIM are part of Allianz SE, a global leader in the financial services industry with approximately 157,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field^® in St. Paul, Minnesota, home of Major League Soccer's Minnesota United.

Allianz Life Insurance Company of North America (Allianz) and the Financial Planning Association^® (FPA^®) are not affiliated. Financial professionals are ultimately responsible for the use of any materials or services and agree to comply with the compliance requirements of their broker/dealer and registered investment adviser, (if applicable), and the insurance carriers they represent.

SOURCE Financial Planning Association