TheStandard CFP Board2024

KEY TAKEAWAYS

Real Results

Americans advised by CFP® professionals KEY TAKEAWAYS

“It’s not necessarily measured by how many vacation homes they own and how many zeros are in their bank account. It’s about whether they are achieving their life goals, whether they have less stress about things that deal with money and finance,” he said. While CFP Board is confident in the results, they are not a foregone conclusion. Working with academic researchers brings academic rigor to the work, and data will be shared with other researchers. “We are an organization that serves the public, and this is one of our contributions to that,” Roth said. “No one else is doing this work.” Baseline results show that people who work with CFP® professionals achieve better outcomes and report better well-being compared to those who work with other advisors and those who do not have an advisor. Americans advised by CFP® professionals are more likely than others to have a detailed financial plan that is reviewed annually, have emer- gency funds and a will, and say they are living comfortably. “We’ve long heard stories of CFP® professionals making a real difference, and now we have the data to confirm it,” said CFP Board CEO Kevin R. Keller, CAE. “What’s even more compelling is that the study shows that Americans working with CFP® professionals enjoy better financial outcomes and greater security compared to clients of other financial advisors.”

BEHIND THE NUMBERS

Meet the Researchers

Americans advised by CFP ® professionals Are more likely than others

Americans advised by CFP ® professionals Are more likely than others to: Say they are living comfortably KEY TAKEAWAYS

J. Michael Collins, Ph.D. is a professor at the University of Wisconsin-Madison. He studies consumer decision-making in the financial marketplace, including the role of public policy in influencing credit savings and investment choices. He leads Wisconsin’s Social Security Administration Retirement and Disability Research Consortium research center and co-founded SpringFour, an online resource for people facing financial challenges. Stuart J. Heckman, Ph.D., CFP ® is an associate professor of practice and Ph.D. Program Director at Texas Tech University. He was the Academic Editor of the Journal of Financial Planning and is on the editorial boards of Journal of Financial Counseling and Planning, Journal of Consumer Affairs, Financial Services Review and Financial Planning Review. Emily Koochel, Ph.D. leads eMoney Advisor’s Financial Wellness team, where she focuses on innovative wellness research and education in her role as manager of financial wellness. She also is an adjunct faculty member at New York University in the financial planning master’s degree program. She is a subject matter expert on understanding the effect of financial behaviors and financial decision-making on personal and financial wellness. She was a co- contributor for CFP Board’s book, The Psychology of Financial Planning.

KEY TAKEAWAYS

Are more likely to

KEY TAKEAWAYS

Say they are living comfortably Americans advised by CFP ® professionals Are more likely than others to: Have a detailed financial plan that is reviewed annually

Trust their advisor Have emergency funds and a will

Americans advised by CFP ® professionals Are more likely than others to:

Have a detailed financial plan that is reviewed annually Americans advised by CFP ® professionals Are more likely than others to: Have a detailed financial plan that is reviewed annually

Have emergency funds and a will Americans advised by CFP ® professionals Are more likely than others to: Are more likely than others to say their planner: Trust their advisor Say they are living comfortably Say they are living comfortably

Living Better Lives

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Makes a point to learn about their family and values Have a detailed financial plan that is reviewed annually Have emergency funds and a will

Have a detailed financial plan that is reviewed annually KEY TAKEAWAYS

Makes a point to learn about their family and values Have a detailed financial plan that is reviewed annually “We are seeing promising results, but the real value of this proj- ect is going be in year five and year seven and year 10,” Roth said. A wide net CFP Board has been careful to ensure that a diverse group of Americans are part of the study. Have a detailed financial plan that is reviewed annually Clients of CFP® professionals stand out in other key ar- eas as well: 57% have a will, compared to 49% of those with other advisors and 25% of non-advised individuals. They also report stronger family dynamics, with 42% experienc- ing fewer financial conflicts at home. Additionally, 24% of CFP® professional-advised clients feel confident managing potential unemployment. Say they are living comfortably The data reveals higher client engagement across key ar- eas: 55% of CFP® professional-advised clients have detailed retirement plans, and 52% maintain comprehensive invest- ment strategies, versus 38% and 30%, respectively, for those with other advisors. This thorough approach benefits clients, with 49% of CFP® professional clients reporting reduced fi- nancial anxiety through their advisor relationship, compared to 31% of those working with other advisors. Makes a point to learn about their family and values “There are some retirees, but by year two, year five and so forth, we’re going to see more retirees, and we’re going to see many of those 25-year-olds hitting prime career moments, getting married and having children, think- ing about saving for college or thinking about buying a house,” Roth said. “It’s not just the typical upper-middle-class households that tend to be clients of financial planners,” Roth said. “We were purposeful in broadening the age range, ensuring racial, ethnic diversity and gender diversity, and in including lower income levels. “Because it’s a 10-year study, people are going to move into higher income bands,” he said. The research cohort is aged 25 through 65.

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Proving the Power of CFP®: Data-Driven Insights into Financial Success

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BY WILLIAM EHART

3 Are less likely than others to: Have family conflicts over money Makes a point to learn about their family and values Takes the time to learn about their spouse’s relationship with finances Trust their advisor

Takes the time to learn about their spouse’s relationship with finances

LEGIONSOFFINANCIAL professionals wouldn’t pursue CFP® certification if they didn’t believe earning and maintaining the marks would translate to greater success. CFP Board has begun putting that proposition to the test, for the benefit of the profession as well as researchers and the public. In 2024, data collection began for the Financial Planning Longitudinal Study , which was set in motion in 2022 on the initiative of the Board of Directors. This intellectually rigorous, peer-reviewed research — led by four academic experts — tracks the experiences of more than 4,000 people of all wealth levels over at least 10 years, including those who work with CFP® profession- als, those who work with other advisors and those who act independently. “We believe that having a holistic financial plan and work- ing with a CFP® professional lead to better outcomes in terms of financial well-being and achieving life goals,” said Kevin Roth, Ph.D., CFP Board Managing Director, Research. This study seeks to test that statement as it quantifies the benefit.

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Have emergency funds and a will

Makes a point to learn about their family and values

3 Takes the time to learn about their spouse’s relationship with finances

Are more likely than others to say their planner:

Sonya Lutter, Ph.D., CFP ® is the inaugural director of

financial health and wellness with Texas Tech University’s School of Financial Planning, where she leads curriculum and continuing education opportunities in the areas of financial psychology, financial therapy and financial behavior. She is also the owner of ENLITE, where she helps bridge the gap between mental health and financial planning. She was on the editorial advisory board that produced CFP Board’s book, The Psychology of Financial Planning.

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Takes the time to learn about their spouse’s relationship with finances

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THE STANDARD

A LOOK AT 2024

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