Looming Shortage of Financial Planners (Financial Planning Advisors)

• An industry analysis published by CNBC reveals that there are more certified financial planners aged over 70 than those aged under 30 within the United States. Replacing these professionals is going to be challenging for the industry, as 40% of financial planners (advisors) would retire within ten years. The CFP Board (an organization that oversees some aspects of training and certification for financial planning professionals) has a total of 83,106 certified professionals in the United States.
• Research credited to the TD Ameritrade Institutional reveals that one thing typically stops more people from becoming financial planning professionals. The obstacle that prevents most people from ever becoming financial planners is that "they do not know about it."
• According to Marilyn Mohrman-Gillis, the low level of diversity in the financial planning sector is unacceptable. There is a need to change the look of the financial planning profession. Marilyn Mohrman-Gillis is the executive director of the CFP Board Center for Financial Planning.
• A recent Forbes publication reveals that there are a lot of statistics that are not comfortable to analyze. However, the statistics on the nearly nonexistent presence of minority financial planners are "really" shocking and saddening. The founder of Envision Wealth Planning in Chicago, who is the former vice president of the Association of African American Financial Advisors (James Brewer), agrees with Forbes on the striking nature of the statistics on minorities in the financial planning sector.

Why It is A Clear Challenge

• It is a definite (clear) challenge because it represents the views of several experts in the financial planning sector, as highlighted above.
• Several credible resources believe that drastic measures are required to prevent the looming shortage of financial planners that will occur within a decade.

Clients Questioning the Need for Professional Financial Planning Services Or The Worthiness of Their Fees

• Several financial planners in the United States reveal that people are not engaging the services of financial planning advisors in the financial planning sector. A certified financial planner (Douglas Boneparth) recently disclosed that many Americans question the cost of their services and feel they are expensive or meant for the wealthy.
• According to Dwayne Moyers (a financial planning advisor), advisors are concerned about clients who are thinking they can depend on market returns to take care of their income needs. Such clients think they don't need any financial planning advisor. Clients are also questioning the need for professional financial planning services or the worthiness of paying their fees.
• However, Dwayne Moyers believes that history is a better guide, and clients should know that they need financial planners who can dig up this history and "help them not repeat it."
• An expert in financial planning for millennials (Boneparth) recently stated that clients think the services of advisors (including financial planning advisors) are solely designed to manage money. They feel the services of advisors are "not about receiving financial advice" as well as "financial planning" services. Consequent to the above challenge and other reasons, 99% of Americans do not seek the services (including financial planning services) offered by financial advisors.

Why It is A Clear Challenge

• Studies published by several credible resources, including CNBC, agree that about 99% of Americans do not seek the services (including financial planning services) offered by financial advisors due to obvious reasons (such as expensive fees and costs), as discussed above.

Lack of Inclusion

• In 2018, the CFP Board Center for Financial Planning hosted its first-ever Diversity Summit in New York City at the Times Center. The Summit brought together leaders and experts to discuss research-based initiatives aimed at increasing racial as well as ethnic diversity within the financial planning profession. According to Richard Salmen, a summit related to researching initiatives on diversity was not just the right thing but also a response to a clear challenge (demand) from the financial planning market — Richard Salmen is a certified financial planner and chairman of the CFP's Board of Directors.
• Experts believe that the United States financial planning industry is not sufficiently inclusive. The Wall Street Journal recently reported that although there are a few women that function within the financial planning sector (such as Amber Miller, who is a financial planner with The Planning Center in Minneapolis), Only about 14% of financial planning advisers within the United States are female. This situation makes things difficult for some clients that are asking to work with female financial advisers.
• There is also a shortage of people of color within the financial planning industry. This under-representation exists at a scale that some people suggest that "trying to expand awareness of financial planning" or merely inviting (campaigning for) more diversity in the industry might not be enough. The above insight reveals the view of expert financial planners such as Nicole M., Madeleine Burton (a certified financial planner, CFP), and a certified financial planning student Eugenié George. Eugenié George feels becoming a certified financial planner is challenging for people of color in the United States as only 3.5% of financial planning professionals (CFPs) are black or Latino.

Why It is A Clear Challenge

• It is a clear challenge because it represents the views of several experts in the financial planning sector, as highlighted above.
• Several leaders, including those from CFP (an association of financial planners that currently has a total of 83,106 certified members in the United States) agree that it is a significant challenge. Some regular members of CFP concur with the views of their leaders.

Research Strategy

Net Profit Margin

•  Net Profit Margin KPI measures how effective your business is at generating profit compared to revenue.

•  It indicates how much each dollar earned by the company translates into profits.
• This financial KPI is instrumental in making long- and short-term financial decisions and shows how fast the company can grow in the long-term prospect.

Cost of Client Acquisition

•  Cost of Client Acquisition is the cost associated with convincing a client to buy your product or service and knowing this KPI allows companies to understand their marketing efforts.

• Cost of Client Acquisition KPI measures the costs of acquiring new customers and the ones that work can get more attention and companies do not spend money on the ones that do not.

Time Spent Serving Clients

• This KPI lets companies know how much time they are spending serving a client and can help improve their businesses.

• It will also allow businesses to know when they should hire and which positions should take priority.

Current Ratio

• This KPI reflects on an organization’s ability to pay all the financial obligations in one year.
•  This financial KPI takes into account a company’s current assets such as account receivables, and current liabilities such as account payable.

• This KPI indicates how well the company is positioned to meet its financial obligations consistently on time and to maintain a level of credit rating that is required to grow and expand the business.

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