Consumers turn to financial services professionals for financial well-being, but how do clients ultimately decide which advisors and planners they can trust?

A 2018 study, The Value of Financial Designations: A Consumer Perspective, conducted by a team of professors and financial planning experts shed more light on this important question.

Clients want advisors with credentials

With each milestone in life comes new financial responsibilities – whether it be purchasing a car, having children, paying for health insurance, or establishing a retirement plan. As an individual’s level of income rises and decision-making become more complex, the need for professional guidance increases as well.

Before checking to see whether an advisor is a fiduciary, many consumers will look to the signals that advisors send, such as designations like the CFP®, ChFC®, or RICP®.

Do clients pay more for credentialed financial guidance?

Education provided through designations and certifications speaks volumes to prospective clients. Credentialed professional education in financial services indicates that the advisor has achieved a level of quality, skill, and expertise that a non-credentialed advisor has not been exposed to.

And because of this, consumers are willing to pay more for someone they trust to have achieved the right credentials for the expertise that they seek. Designations communicate to clients a perceived higher level of knowledge and professionalism. And since designations are voluntary in the financial services profession, attaining additional credentials shows that the advisor has taken initiative on their own to pursue their knowledge and professionalism.

The path to success starts with education

Consumers are placing more value on credentialed advisors who obtain financial designations. Designations serve as a mark of professionalism, ethical best practices, and a commitment to ongoing education in financial services.

Download The Value of Designations Study to discover how a client’s age, level of income, and investable assets affect the impact of consumer perceptions of financial services professionals’ designations, which in turn impacts the overall rate of compensation to the professional.

 

The 2018 study “The Value of Financial Designations: A Consumer Perspective” was authored by Sterling Raskie, Jason Martin, Craig Lemoine, and Benjamin F. Cummings. It appears in the Journal of Financial Planning, issue 31 (6) pages 44–54. 

The Value of Financial Designations: The Client's Perspective | Download This White Paper

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