New global research shows that improved financial well-being positively impacts mental and physical health and family life, playing a key role in helping to alleviate stress across generations.
The research is published to mark this year’s World Financial Planning Day 4 October 2023 and was undertaken by the Financial Planning Standards Board (FPSB) the standard-setting body for the Certified Financial Planning (CFPTM) certification. Over 15,000 consumers across 15 global regions, including the UK, aged 25+ responded to the survey earlier this year*.
Coinciding with the International Organisation of Securities Commissions (IOSCO) World Investor Week 2-8 October, World Financial Planning Day raises awareness of the value of financial planning and of working with a financial planner who has committed to rigorous standards of competence, ethics and practice as demonstrated in CERTIFIED FINANCIAL PLANNER (CFPTM) professionals, of which the Chartered Institute for Securities & Investment (CISI) is the marks licensing authority for the CFP marks in the UK.
The FPSB research looked at three key areas across both respondents who were advised by CFPTM professionals and those who were unadvised. The report’s findings include:
Value of Financial Planning
- Globally, clients of a professional financial planner experience a higher quality of life, financial confidence and satisfaction (75%) than those unadvised (71%), with 83% of advised respondents saying they were feeling financially secure opposed to 74% of unadvised.
- CFP™ professional clients have greater life satisfaction and feel like they can cope with health issues better than their unadvised counterparts, with almost 15% more CFPTM-advised clients feeling that their interests and involvement in life gave them a sense of meaning and purpose, compared to unadvised clients (73% CFPTM vs 64% unadvised).
- CFPTM professional clients are more likely to feel financially secure than unadvised consumers.
- Improved financial well-being and peace of mind (37%), financial decision-making confidence (38%) and help in understanding financial matters (36%) are considered key benefits when working with a financial planner.
- Almost 1 in 2 financial planning clients said their family life (48%) and mental health (48%) have benefitted from seeing a financial planner.
- Advised women experience a significant value in financial planning (74%) compared to unadvised women (57%).
Myth Busting
- Financial planning is not just for the rich: 39% of less affluent, unadvised consumers felt that financial planning could help improve financial well-being and peace of mind. Additionally, less affluent consumers have the same need for financial planning, indicating that one of their top, unmet needs was to ensure they have regular money to live on (38%)./li>
- Financial planning is not only for retirement: All generations of advised consumers experience quality-of-life benefits, financial confidence and financial satisfaction, compared to unadvised consumers. Value in respect of quality of life was noted by 69% of millennial) advised consumers (64% unadvised millennials).
The report shows that millennials have many unmet financial needs, with ability to live a desired lifestyle (39%) and ensuring regular money to live on (37%) being top needs identified by millennials.
- The value of financial planning delivers benefits that far outweigh its costs for advised clients: The top reason many respondents remain unadvised is feeling it's “too expensive” (30%) followed by finding someone they can trust (29%). Most clients (8 in 10) believe financial advice provides more value than it costs and that it has made them tangibly better off.
The Future of Financial Planning
- 3 in 4 millennials currently use apps or websites to manage their finances.
- The wealth transfer means that more than half of millennials (53%) expect or have already received an inheritance or major financial support, with 2 in 5 of them expecting this to come in the next five years.
- Millennials are just as likely to seek financial support from a planner (41%) as from friends and family (43%).
- The biggest trigger for millennials to consider seeking advice from a planner is taking control of their money (35%), followed by buying a property (32%) and receiving an inheritance (31%). Barriers for millennials include cost (32%) and trust (29%).
- If using a professional financial planner 92% of millennials respondents expect to have digital platforms available to monitor their investments and goals. They are also most likely to have taken up or to consider online asset trading, with 21% trading since 2020 (11% Boomers and 14% Gen X).
- The majority of those with Crypto investments intend to invest more in it – 62% of Boomers, 57% millennials and 56% Gen X. The “fun factor” 45% and “long term growth” 52% are key drivers for millennials Crypto investing. However, the majority, 53%, of Gen Y consider Crypto a “very risky investment”.
Sally Plant, CISI Assistant Director, Financial Planning and Education Development said:
“This is one of the largest ever pieces of global consumer research undertaken, examining the benefits of financial planning and of working with a CFPTM professional. With many parts of the world experiencing economic strain and rising costs of living, it is more important than ever that we acknowledge that improved financial well-being positively impacts mental and physical health, and family life. The research shows that financial well-being plays a key role in alleviating stress across generations, and that financial planning clients, report an improved family and social life, and physical and mental health – the gym for the brain!”
“We are delighted to release these important research findings on World Financial Planning Day 2023 and we are hosting our annual Financial Planning Conference and Awards this week during which financial planners throughout the UK can learn, share and debate some of the key issues raised by this research.”
More information about World Financial Planning Day and World Investor Week is available on worldfpday.org and worldinvetorweek.org and by joining the #WFPD2023 conversations on LinkedIn, Facebook, Twitter, Instagram and YouTube. To find out more about financial planning and to find a financial planner in the UK, visit financialplanning.cisi.org
The full slide deck detailing the FPSB research findings is here
Ends
*The descriptions and statistics in this report are based on insights from a global research study undertaken for Financial Planning Standards Board Ltd. and CFP Board by independent research firm MYMAVINS. The large quantitative study undertaken in February 2023 involved an online survey of 15,332 consumers from 15 regions* over 25 years old earning over $60k USD equivalent or holding over $35k USD equivalent in investable assets.
The sample included both advised and unadvised consumers. Advised consumers are those who are currently receiving financial advice, those who seek financial advice as needed and those who have received financial advice in the past three years. Unadvised consumers, on the other hand, are those who have never received financial advice or have not received financial advice in the past three years. The advised cohort is evenly weighted across generations in analysis and vice versa. There were 1,731 consumers who were advised by a CFP professional. Regions surveyed include Australia, Canada, Chinese Taipei, Hong Kong, India, Ireland, Malaysia, Netherlands, New Zealand, People’s Republic of China, South Korea, Singapore, South Africa, the United Kingdom and the United States.