Top 5 Financial Planning Trends for the Next 5 Years

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The Financial Planning Standards Board Ltd., which owns the international Certified Financial Planner certification program outside the U.S., released the results of a survey on CFP professionals’ view on trends that are likely to influence financial advice delivery in the next five years.

The survey, conducted in partnership with the global FPSB Network, comprised 4,250 CFP professionals across 23 countries.

“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,” FPSB’s chief executive, Noel Maye, said in a statement.

See the gallery for the five trends CFP professionals cited as factors likely to influence financial advice delivery in the next five years.

Michael S. Fischer

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1. Technology is expected to enhance the practice of financial planning.

Forty-two percent of CFP professionals see financial technology as the factor that is likely to have the greatest effect on how financial planners work with clients over the next five years. Seven in 10 look favorably on technology as it would allow them to spend more time doing financial planning with clients. Two-thirds of CFP professionals increased their efforts to shift to a more virtual practice during the pandemic, and a majority expect at least 40% of their client meetings to continue to be virtual in the near future.

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2. Financial planners will embrace “softer” skills.

During the pandemic, 32% of CFP professionals said they were more involved with their clients in managing emotions. In the future, more than half said collaborating to set and achieve financial goals and providing objective advice to facilitate decision-making will be the greatest value they can provide to clients.

In support of this shift toward more collaborative client relationships, 55% of CFP professionals said financial planners need to learn more about behavioral finance to be successful and 43% cited coaching, along with more traditional topics such as financial issues related to aging, estate planning and investment management.

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3. Public demand for financial planning will increase, driven by retirement needs.

Eighty-two percent of CFP professionals expect increased demand for financial planning services over the next five years because of more people preparing for retirement and younger generations seeking financial planning, increased levels of consumer awareness of the value of financial planning and the need for professional advice caused by global economic uncertainty.

As the top items survey participants expect financial planning clients will want them to address in the future, 69% listed retirement security, 64% investment planning, 61% managing inheritance/wealth transfer to the next generation and 47% finances associated with aging and long-term care.

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4. 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 said significant work needs to be done to promote the value of financial planning and the value of working with a financial planner.

Seventy-nine percent cited a lack of awareness of the value of financial planning as the top reason people do not seek out financial planning services, while 46% said the reason is a lack of trust in financial advisors.

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5. Continuing professional development is key to financial planner success.

Sixty-five percent of respondents listed continuing education/professional development as the action that will have the most significant effect on their success over the next five years. Sixty percent cited embracing technology, and 59% said shifting client service to a holistic model of financial planning will have the biggest effect.

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