Survey: Certifications, Training and Experience Matters to Consumers When Choosing an Advisor

CFP Board survey shows consumers value advisor knowledge of multiple financial areas over personal referrals and even performance track record

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Certified Financial Planner Board of Standards, Inc.

Dec 04, 2014, 09:18 ET

WASHINGTON, Dec. 4, 2014 /PRNewswire-USNewswire/ -- When evaluating financial advisors, consumers are looking more and more at what a person knows, including the type of advice they provide, their education and years of training, according to a survey released today by Certified Financial Planner Board of Standards, Inc.

"Consumers want financial advisors to understand and offer guidance on all their financial needs. They especially want their entire financial situation and needs to be the focus of an advisor's approach to their finances," said CFP Board Chief Executive Officer Kevin R. Keller, CAE. "CFP® professionals have the knowledge, education and experience consumers expect and deserve."

In the survey conducted by ORC International, consumers with more than $100,000 in investable assets were asked about their views of financial advisors and certifications. Highlights of the findings include:

Nearly 90 percent of respondents see a potential advisor's certifications as important;
86 percent would prefer working with an advisor who has passed a certification exam and has completed a rigorous course of education;
82 percent say it is important for a potential advisor to discuss his or her training and certifications with more than a third (39 percent) saying it is very important before he or she is engaged;
More than 80 percent would prefer to work with an advisor who is qualified to review all areas of their financial life as opposed to someone who specializes in one or two subject areas;
Nearly three-fourths (72 percent) say they expect a financial advisor to receive 1 to 4 years of training in financial planning;
Two-thirds of respondents (65 percent) would abandon or not engage an advisor whose knowledge and training is limited largely to his or her company's products or services;
48 percent of those surveyed said that knowledge of multiple financial areas over an advisor's investment track record (31 percent) or personal referrals (18 percent) is most important to them when choosing a financial professional; and
Women, older or retired investors, and those with assets at or above $500,000 placed a slightly greater emphasis on breadth of knowledge compared to other respondents.

"This survey tells us that firms need to rethink their training models to incorporate financial planning competency from the beginning of a new advisor's training program – not three to four years into their career," said Joseph Maugeri, CFP® - CFP Board's Managing Director of Marketing and Corporate Relations. "The days of 'learning on the job' seem to not apply anymore when it comes to what competencies consumers now expect of their financial advisors."

More information about the CFP® certification and how to earn it can be found at www.CFP.net/get-certified. Americans looking to learn more about financial planning and to find a CFP® professional in their area should visit www.LetsMakeaPlan.org.

Note on Methodology and Survey Report

The online survey was conducted November 20-23, 2014 through ORC International's weekly Investor CARAVAN® Omnibus Survey. The sample of 850 investors was defined as adults, 18 years of age or older, with investable assets of $100,000 or more (not including the value of a primary residence).

A copy of the survey by ORC International can be accessed here or at www.CFP.net.

ABOUT CFP BOARD

The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP^® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP^® professionals and other stakeholders. CFP Board owns the certification marks CFP^®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes nearly 71,000 individuals to use these marks in the U.S.

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SOURCE Certified Financial Planner Board of Standards, Inc.