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Financial Planning > Behavioral Finance

FPA: Bad News Increases Value Of Professional Advice

By Jim Connolly

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NU Online News Service, Oct. 11, 12:14 p.m. – Bad news is shaking consumer confidence and making financial advice more valuable to the average investor, according to research from the Financial Planning Association, Atlanta.

Sixty-three percent of Americans do not feel that America’s financial, government and regulatory systems “protect people like me” against investment losses and accounting fraud, the nationwide survey of 1,015 adults found.

Thirty-one percent of the survey participants told researchers that they do not believe that they will ever again feel confident about their financial prospects.

FPA researchers conducted the survey in September, as the market was sliding. Fifty-eight percent of the participants said they were “somewhat” or “not very” confident about their financial future.

Forty-six percent of the men were “very confident” about their financial future, but only 34% of the women were very confident.

The study found that three in 10 consumers are more likely to seek professional financial help than they were a year ago.

FPA also conducted a focus group follow-up survey.

The results of the focus group study were good news for certified public accountants and financial planners.

On a scale of one (very negative) to five (very positive), accountants had the most favorable rating, at 3.6. Ratings for other professionals were: personal bankers, 3.4; financial planners, 3.2; life or disability insurance agents, 3.1; estate planning lawyers, 3.0; and, stockbrokers, 2.7.

When respondents were asked to offer their impressions of a life or disability insurance agent, 14% gave agents a top-level rating. Nineteen percent gave agents a 4; 33%, a 3; 16%, a 2; and 11%, a 1.

The FPA also asked about awareness of designations.

The proportion of consumers who said they were “very familiar” with various designations was 41% for the Certified Public Accountant mark; 8% for the Certified Financial Advisor mark; 7% for the Certified Financial Planner mark; 4% for the Chartered Life Underwriter mark; and 3% for the Chartered Financial Consultant mark.

When respondents were asked what types of advisors they would pick for professional financial planning, 48% chose a CPA; 4%, a CFP; 4%, a CFA; 2%, a CLU; and 1%, a ChFC.

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