Global Survey By Financial Planning Standards Board Finds Consumers Lack Strong Confidence In Achieving Their Financial Goals
DENVER – 17 NOVEMBER 2015 – As consumers worldwide become increasingly responsible for their long-term financial well-being, a global study by Financial Planning Standards Board (FPSB) finds that most people feel challenged by their finances, with relatively few saying they are very knowledgeable about financial matters or highly successful at sticking to their financial goals. FPSB, owner of the international CERTIFIED FINANCIAL PLANNER certification program outside the U.S., collaborated with GfK, a global research firm with extensive experience in the financial services sector, to survey 19,092 consumers who are either primary or shared household financial decision-makers. The results of the survey, which was conducted online during Q2 and Q3 2015 in 19 of the 26 markets where FPSB and its member organizations offer CERTIFIED FINANCIAL PLANNER certification, provided the following key findings:
- Consumers lack confidence in achieving their financial goals. Just 22 percent believe strongly that they will achieve their financial goals. Only 17 percent believe strongly in their financial know-how, and just 19 percent feel very successful in sticking to their financial strategies.
- Being debt-free is most important to consumers globally. Being free of major financial debt (55 percent) and being free of common consumer debt (54 percent) are most important to consumers, with being prepared for an unexpected financial emergency (52 percent), home ownership (52 percent) and building up savings (51 percent) next on the list of very important priorities.
- Consumers are interested in financial planning services to help them get on track financially. Survey respondents view retirement planning as the most helpful financial planning service (50 percent), followed by investment planning (38 percent) and then budgeting, cash flow and debt management together at 36 percent.
- However, most rely on friends and family – not professional financial planners – for information on financial matters and planning. More than four in 10 (44 percent) consumers rely on friends and family, while another 41 percent rely on websites for financial information. Fewer (31 percent) turn to a financial planner.
- Knowing whom to trust is the biggest barrier to working with a financial professional. Among those surveyed, 68 percent rate “trustworthiness” as very important when choosing a financial professional – higher than any other consideration. Yet, two in three consumers (66 percent) agree either strongly or somewhat that they do not know whom to trust when it comes to getting financial planning advice.
- Those who work with a financial professional generally feel better prepared to achieve their financial goals. While those who work with a financial adviser express stronger confidence in achieving their financial and life goals (31 percent strongly agree versus 15 percent among those who do not work with a professional), those working with a CERTIFIED FINANCIAL PLANNER professional are even more confident (43 percent).
- Consumers with a plan are more confident. And those who have a written, comprehensive plan are nearly three times more likely to feel confident they will achieve their life goals (38 percent strongly agree versus 14 percent among those who lack such a plan).
- CFP professionals earn higher “excellent” ratings on all key characteristics compared to other types of financial professionals. Consumers rate CERTIFIED FINANCIAL PLANNER professionals as much as 16 percentage points higher than other financial professionals on characteristics such as:
- honesty and integrity (57 percent versus 47 percent);
- understanding my needs and goals (53 percent versus 40 percent);
- placing my interests first (51 percent versus 38 percent);
- providing me with relevant, timely information (50 percent versus 39 percent);
- using plain language instead of financial jargon (49 percent versus 41 percent);
- helping me to keep goals on track (51 percent versus 35 percent); and
- helping to create actionable plans (51 percent versus 35 percent).
“With close to 160,000 CERTIFIED FINANCIAL PLANNER professionals globally, FPSB and its member organizations have an incredible opportunity to connect individuals and families with competent, ethical and trustworthy financial planners who can help them take control of their finances and be more confident and secure in their financial decisions”
—Noel Maye, FPSB Ltd. CEO
In addition to questions about their own finances, FPSB’s global study also sought consumer perspectives on regulation of the financial planning profession. While many respondents (41 percent) were unsure whether their governments regulate financial planning, 79 percent felt it was either very important or somewhat important that financial planning be regulated. In most territories around the world, financial planning is not regulated per se.
Maye said governments, legislators and regulators should take note of consumers’ expectations regarding regulation of financial planning. “Without proper oversight of financial planning as a distinct professional practice, anyone could call him or herself a financial planner without having met appropriate professional standards – including the ethical obligation to place the client’s interests first that is required of all CERTIFIED FINANCIAL PLANNER professionals. If we are to restore consumer confidence and trust in financial markets and financial practitioners globally, we need to do so with a balance of compliance obligations and professional conduct expectations, developed and enforced by professional financial planning bodies, such as the organizations that are Members of FPSB’s global network.”
FPSB’s vision is to establish financial planning as a distinct profession. Together with its member organizations in 26 territories, FPSB will use its research findings to develop a global consumer awareness campaign about the value of financial planning and of working with a CERTIFIED FINANCIAL PLANNER professional. FPSB member organizations in the following territories participated in the global research: Australia, Austria, Brazil, Canada, China, France, Germany, Hong Kong, Indonesia, Ireland, Malaysia, the Netherlands, New Zealand, the Republic of Korea, Singapore, South Africa, Switzerland, the United Kingdom and the United States.
FPSB manages, develops and operates certification, education and related programs for financial planning organizations 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 in markets outside the United States. FPSB has a nonprofit member organization in the following 26 territories: Australia, Austria, Brazil, Canada, Chinese Taipei, Colombia, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Japan, Malaysia, New Zealand, the Netherlands, the People’s Republic of China, the Republic of Korea, Singapore, South Africa, Switzerland, Thailand, Turkey, the United Kingdom and the United States. At the end of 2014, there were 157,586 CFP professionals worldwide. For more, visit fpsb.org.
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