Most Advisers Do Not Fit Criteria for Financial Planner

The majority of advisers perceive themselves as providing a level of service that merits the title of financial planner (59%), however, 56% fall into the investment planner category.

According to survey findings from Cerulli Associates, only 30% of advisers are financial planners, but 59% perceive themselves as this practice type. Fifty-six percent are investment planners but only 22% consider themselves this practice type.

Cerulli identified this discrepancy during the production of its annual release of “Quantitative Update: Advisor Metrics,” a sourcebook for data and analysis on advisers’ practices that has been in circulation for seven years.

To obtain this data, Cerulli asked advisers via its annual survey to classify their practices based on their perception of the services they offer. Then Cerulli reviewed the actual services offered (data also garnered through surveys) and the client base of each adviser to determine which classification is most reflective of the adviser’s actual practice.

Many adviser practices offer some of the basic elements of financial planning, but focus their efforts nearly exclusively on asset accumulation strategies.

“Firms have encouraged their advisers to expand their advice relationships with clients; however, advisers tend to overestimate the degree to which they are involved in the planning process,” said Scott Smith, head of Cerulli’s intermediary practice. “The movement to extend advice services is likely being accelerated by turbulent markets, as advisers who base their value to investors on investment performance have suffered more than those with broad advice relationships.”