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First, a housekeeping item. The data referenced here is courtesy of the Certified Financial Planner Board of Standards (CFP Board) so I’ll be using “advisor,” “CFP” and “planner” interchangeably.
With that out of the way, let’s get into the important stuff. It’s well none that financial matters are primary causes of stress. Money woes stir negative emotions, sleepless and, in some cases, life-altering outcomes which have points of no return.
It doesn’t have to be this way and while many investors reading this are apt to assume that the key to eradicating financial stress is having more money, there are easier steps to take, including working with advisors or CFP. Said another way, no one is contesting that having more money is an effective avenue when it comes to relieving financial burdens, but getting access to more money right away can be challenging.
Conversely, accessing an advisor or CFP is easy – it’s a box that can be checked in a matter of days. Not only that, but that move can go a long way toward easing financial stress without requiring the near-term acquisition of significant sums of money.
Proof Is in the Pudding
Many of folks in the self-directed investor camp and those struggling with money issues need convincing about the merits of working with a CFP. For that need that push, consider the findings from the CPF Board’s Financial Planning Longitudinal Study.
“The initial study results show that clients of CFP® professionals are more likely to have detailed, regularly reviewed financial plans, maintain emergency funds and wills, and report living comfortably than people who work with other financial advisors or are unadvised. These clients also report fewer family conflicts over money and place greater trust in their advisors,” notes the Board.
As just one example of the stress-reducing benefits of working with a CFP pro, 78% of those polled by the Board say they have three months worth of emergency savings compared to just 53% of those who don’t work with advisors. Clients are also more prepared and thus burdened in other ways relative to non-advised folks.
“57% have a will, compared to 49% of those with non-CFP® professional advisors and 25% of non-advised individuals. They also report stronger family dynamics, with 42% experiencing fewer financial conflicts at home. Additionally, 24% of CFP® professional-advised clients feel confident managing potential unemployment,” adds the Board.
Holistic Benefits
For awhile now, holistic has been a big buzzword in the advisory business and advisors and planners that embraced that way of doing business are reaping the rewards. More importantly, clients are, too.
After all, it’s an easy way of relieving small sources of stress. No client wants to go to one place for investment advice, another for tax guidance and another for estate planning when they get all those services under one roof. That convenience leads to higher levels of satisfaction and reduced stress.
“The data reveals higher client engagement across key areas: 55% of CFP® professional-advised clients have detailed retirement plans, and 52% maintain comprehensive investment strategies, versus 38% and 30%, respectively, for those with non-CFP® professional advisors,” adds the CFP Board. “This thorough approach benefits clients, with 49% of CFP® professional clients reporting reduced financial anxiety through their advisor relationship, compared to 31% of those working with other advisors.”