From the December 2012 issue of Investment Advisor • Subscribe!

November 20, 2012

High-Ticket Item: Is the CFP Board's Awareness Campaign Working?

Will the CFP Board’s $40 million public awareness campaign really drive investors to financial planners?

Back in October, I took a look at NAPFA’s infographic, “Why Financial Planning is Important” (see “What Consumers Want,” on AdvisorOne.com), so it only seems fair to see how the CFP Board’s public awareness campaign, which rolled out in April 2011, is faring. As you’re probably aware, the Board’s campaign is a much more ambitious effort, including a media relations campaign, and broadcast, print and online advertisements spread over four years and myriad media outlets, at a projected cost of some $10 million per year. To pay for it, the Board increased the annual fees that CFPs pay to renew their certification 80%: from $180 to $325 a year. That kind of change just begs the question of whether it’s worth it, or at least, how’s it going so far? The answer reveals both the challenges of marketing financial planning and, for the CFP Board itself, avoiding taking a stand on some key professional issues that clearly resonate with the investing public.

In an era when we seem to throw money at problems like we’re printing it up (‘cause, hey, we are), the Board, to its credit, built in a feedback loop to monitor the progress of its massive campaign, with a benchmarking study after one year and a formal review of the program after two years. “We realized that effective measurements of the progress are crucial to the success of our public awareness campaign,” Board chair Nancy Kistner said in a July 13 presentation of the first year study. “We’ve hired an outside firm to collect as much data as possible through significant consumer research.”

What does that research show so far? The data, such as it is, is encouraging. Kistner set expectations by pointing out that the Board has two staged goals for the campaign: in the short term, raise public awareness of the CFP mark and longer term, increase financial consumers’ preference for financial advisors who are certified financial planners. The one-year market data, when compared to the baseline data gathered when the campaign began (based on 604 online interviews), is increasingly encouraging on the awareness front as investors gain affluence—and even more so when asked about advisor preference.

For instance, the percentage of people who think about CFPs first when asked about a designation for financial planning professionals increased three points when picking from a list (top of mind) and four points without the aid of a list. When the sampling was limited to investors with at least $500,000, top-of-mind awareness of CFPs increased seven points; unaided awareness grew five points. For mass-affluent investors, with up to $1 million to invest, both top-of-mind and unaided awareness increased by seven points each. As for preference, when asked if they thought CFP professionals are appropriate and beneficial for someone like them, the total sampling who said “yes” was up four points; investors with more than $500,000 in assets were up seven points, and the mass affluent were up eight points.

Of course, without knowing the size of the base numbers (which were not disclosed in Kistner’s presentation, and at the time of this writing, I have been unable to get), it’s a bit hard to know how impressive these increases are: For instance, a three-point increase from 3% to 6% awareness is pretty impressive, whereas a jump from 86% to 89%, not so much. Given the unlikeliness of a large public awareness of the CFP market, I’m willing to give the Board the benefit of the doubt that these increases are, indeed, encouraging.

What about tangible benefits to CFPs? Judging by the fact that no substantial increases in visits to the Board’s website or flood of clickthroughs to the Find-a-CFP section were cited, I’m guessing we haven’t seen any yet. But, to put a number on it, Kistner pointed out that the exposure generated by the awareness campaign resulted in 731 articles in magazines, newspapers or websites with a combined readership of 886,000, creating “media impression” worth a total of $45 million.

For the record, that’s a pretty fair way to value a media campaign—assuming, of course, that the message contained in those 731 articles was one that the Board would have paid for and that ultimately benefits CFPs. After all, they’re footing the bill for all this. If there has been any negative press from this campaign, I haven’t been able to find it, so we can probably rule out any negative consequences from those articles. That leaves the question of what benefits might result from the Board’s message?

The Board’s public awareness campaign is divided into three parts: banner ads on websites, print ads and the “Let’s Make a Plan” TV commercial. While the graphics are simple and direct, undoubtedly to appear non-threatening to a skittish investing public, the message is curiously diverse.

For instance, the “interactive” banner ads (you have to roll over them to get the punch line) have two themes. The first is “Bring your finances together with the help of a CFP,” preceded by notions suggesting fractured financial lives, such as: “Most advisors can only help with some of your finances” and “Don’t address your finances piecemeal.” The second addresses the conflict of interest and fiduciary issue by asking, “Is your advisor more interested in growing your finances? Or taking her cut?” and “What’s more important to your financial advisor: that you make money or that he makes money?” Both are followed by “Put your needs first. Work with a CFP professional.”

When we get to the print ads, though, the message seems to focus on the “Bring your finances together” theme: “You can let your finances pull you in every direction, or you can decide to do the pulling for a change,” or “Something to consider if you have your finances on autopilot: There is no such thing.” Each of these ads has the “Let’s Make a Plan” tagline and the CFP logo. Finally, there’s the TV commercial, which is back to the “Bring your finances together” theme.

So, we have three themes here: “Let’s make plan”; “Bring your finances together”; and “Put your needs first.” They are all delivered and addressed with professional quality production, which one would expect with an eight-figure price tag. Yet, I have to admit, my overall impression is, “Eh, so what?” There’s nothing wrong with it, but as Andy Warhol said of Los Angeles, “There’s no there, there.” I’m sitting here asking myself if I was going to spend $40 million on advertising financial planning, is this what I’d say? I certainly hope not.

Is making a “plan” and bringing one’s “finances together” why people go to a financial planner? Sure, that’s ultimately what they will get from a planner, but it’s hard to believe that those are really the driving forces. In fact, the only theme in the CFP Board’s campaign that appears to be tailored to what’s on the mind of today’s investor is “put your needs first,” which at least addresses the conflict and lack of a fiduciary standard for brokers that was brought to the public’s awareness by the Dodd-Frank Act. Yet, it seems a curious pitch for the Board to make considering it allows brokers to become CFPs and wear their fiduciary hat sometimes and broker hat other times, and leads to the very behavior those ads seem to be saying that CFPs don’t engage in.

The other pressing issue that is curious by its omission is that of independence. Independent advice is regularly shown to resonate with investors, yet the Board finds itself conflicted on that score as well, also due to the certification of brokers who are W-2 employees of their BDs. But even without those two consumer hot buttons, we still have 40 years of financial planning experience to tell us why people go to financial planners.

History shows time and again that events drive people to seek financial advice. Market crashes are a good example, as are changes to tax laws, hot new investment opportunities, looming retirement and the sudden emergence of new needs. As the global economy continues to struggle to recover, people face a whole menu of new needs including: underperforming retirement portfolios, mortgage problems, health insurance, working longer, and the threats of higher tax and inflation rates. Yes, each of these issues can be addressed more effectively via a financial plan, but to really get people’s attention, wouldn’t it make more sense to tell them which problems you’re going to solve, before you tell them how you’re going to solve them?

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View AdvisorOne's CFP Board landing page for more on the Board's initiatives.

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