CFPs Add Value, Are More Productive: Study

Certification boosts quality of advice and client satisfaction, revenue

Financial advisors who carry the CFP designation add value to their firms, are more productive, and provide a higher level of client satisfaction, according to the results of a new study. Not only that, but they also provide a boost to revenues—and that’s whether the firm is a sole-proprietor operation or a team firm.

The results of the research, a white paper from Aite Group titled “Adding Expertise to a Financial Advisor’s Practice: Measuring the Contributions of CFP Professionals,” were released on Tuesday by the CFP Board and Aite Group. Among the data were such certification-encouraging nuggets as these:

Client satisfaction is higher. Among clients who work with an advisor, 87% of those working with a CFP are satisfied or very satisfied, compared with 72% of those who work with an advisor without certification.

Team practices value having a CFP on board. While 20% of all advisors are certified as CFPs, more than 70% of all team practices have at least one CFP professional. The addition of a certified member of the team provides a holistic view of clients’ finances.

CFPs are both more profitable and more productive. Among sole practitioners, CFPs bring in between 40% and 100% more revenue than planners without the designation. Among team practices, those that include a CFP bring in 30% more in revenue than those without.

CFP professionals with less than 10 years of industry experience are twice as likely to earn more than $215,000 annually (17% to 8%); and 35% of CFP professionals with more than 10 years of experience earn $215,000 annually compared with 23% of advisors who lack certification.

Regarding productivity, Sophie Schmitt, author of the white paper, said that practices with a CFP professional serve 30% more clients in a year, in comparison with practices that don’t have one.

That leads to additional benefits; financial professionals with a CFP certification “work with more of their clients on a long-term, recurring basis, managing 45% of client assets for an AUM-based fee.”

Tom Crowder, managing director for marketing and business development at the CFP Board, said in a statement, “This study is an important step in aligning a firm’s economic interests with CFP Board’s mission to benefit the public and promote competent and ethical financial planning. For many years, CFP Board has heard that CFP professionals had a leg up over their peers—this research proves that indeed they do.” With certification growing by 22% over the last five years, it’s apparent that many advisors agree.

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