Financial Planning Practice in Future Will Be More Innovative, More Human and More in Demand, According to Global CFP Professionals
FPSB Research Shows Global Financial Planning Community Optimistic About Profession’s Future, Committed to Professionalism and Eager to Promote Value of Holistic Financial Planning
NEW YORK – 05 October 2021 – Financial Planning Standards Board Ltd. (FPSB), owner of the international CERTIFIED FINANCIAL PLANNER certification program outside the United States, has released the results of its Future of Financial Planning Practice research, a survey of 4,250 CERTIFIED FINANCIAL PLANNER professionals across 23 territories, conducted in partnership with the global FPSB Network. The survey was carried out as a complement to FPSB’s Global Job Analysis, a landmark international study on the current practice of financial planning, and captures CFP professionals’ view on trends likely to affect financial advice delivery in the next five years.
- Technology expected to enhance the practice of financial planning. CFP professionals viewed financial technology (42%) as the factor likely to have the greatest impact on how financial planners work with clients over the next five years, with almost 70% favorably viewing technology as something that would allow them to spend more time doing financial planning with clients. Two thirds (66%) of CFP professionals increased their efforts to shift to a more virtual practice during the Covid-19 pandemic, and a majority expect at least 40% of their client meetings to continue to be virtual in the near future.
- Financial planning relationships shift towards collaboration, financial planners embrace “softer” skills. During the Covid-19 pandemic, almost one third (32%) of CFP professionals reported being more involved with their clients in managing emotions. When asked about the value financial planners will provide to clients in the future, over half the CFP professionals surveyed reported that collaborating to set and achieve financial goals (29%) and providing objective advice to facilitate decision-making (27%) will be the greatest value they can provide to clients. In support of this shift towards more collaborative client relationships, CFP professionals reported financial planners needed to learn more about behavioral finance (55%) and coaching (43%) to be successful in the future, along with more traditional topics such as financial issues related to aging (68%), estate planning (62%) and investment management (57%).
- Public demand for financial planning will increase, driven by retirement needs. Overwhelmingly (82%), CFP professionals expect increased demand for financial planning services over the next five years. CFP professionals see demand growing due to more people preparing for retirement (61%) and younger generations seeking financial planning (35%), increased levels of consumer awareness of the value of financial planning (56%) and the need for professional advice caused by global economic uncertainty (41%). Not surprisingly given the importance placed on retirement, CFP professionals listed retirement security (69%), investment planning (64%), managing inheritance / wealth transfer to the next generation (61%) and finances associated with aging and long-term care (47%) as the top items they expected financial planning clients would want them to address in the future.
- Raising awareness of the value of financial planning and (re)building trust will be key to engaging the public. Although increased public awareness is expected to be one of the drivers of demand for financial planning, CFP professionals indicate there is significant work that needs to be done to promote the value of financial planning and the value of working with a financial planner. Respondents cite a lack of awareness of the value of financial planning (79%) as the top reason people do not seek out financial planning services, followed by a lack of trust in financial advisors (46%).
- FPSB sees initiatives like the global financial planning community’s fifth World Financial Planning Day on 6 October as an important step in this effort, and looks forward to enhanced public awareness and financial literacy opportunities in the coming years that will promote to the public the value of financial planning and of having a financial plan, and the value of seeking out practitioners who have committed to standards of competence and ethics, like the global CFP professional community.
- Continuing Professional Development Key to Financial Planner Success. In welcome news to FPSB, and affirmation of the commitment of the global CFP professional community to professionalism, respondents listed continuing education / professional development (65%) as the action that would have the most significant impact on their success over the next five years. This was followed by embracing technology (60%) and shifting client service to a holistic model of financial planning (59%).
“FPSB will use the information we’ve gathered through this year’s global research projects into the current and future practice of financial planning to future-proof the financial planning profession and CFP certification program,” said Noel Maye, CEO of FPSB Ltd. “FPSB looks forward to engaging the global CFP professional community and other stakeholders to ensure that our standards and certification requirements are appropriate for an evolving financial planning profession, and that CFP certification continues to be recognized as financial planning’s global symbol of excellence.”
About FPSB Ltd.
FPSB manages, develops and operates certification, education and related programs to benefit the global community by establishing, upholding and promoting worldwide professional standards in financial planning. FPSB demonstrates its commitment to excellence with the marks of professional distinction – CFP, CERTIFIED FINANCIAL PLANNER and CFP Logo Mark – which it owns outside the United States. FPSB and the FPSB global network administer CFP and other certification programs in the following 27 territories: Australia, Austria, Brazil, Canada, Chinese Taipei, Columbia, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Japan, Malaysia, the Netherlands, New Zealand, People’s Republic of China, Peru, Republic of Korea, Singapore, South Africa, Switzerland, Thailand, Turkey, the United Kingdom and the United States. At the end of 2020, there were 192,762 CFP professionals worldwide. For more, visit fpsb.org.
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