Half Of All Self-Described "Planners" Don't Actually Do Any Planning, Cerulli Discovers

Thursday, January 19, 2012 09:36
Half Of All Self-Described

Tags: financial planning


An interesting statistic dropped out of industry research firm Cerulli's most recent advisor metrics survey: most advisors say they're financial planners, but most do not live up to that name.

This Website Is For Financial Professionals Only


Cerulli found that 59% of the industry claims the "financial planner" title but nearly all of them would really be more accurately classified as "investment" planners. 


On review, they concluded, "Only 30% truly offer planning services."


"Advisors tend to overestimate the degree to which they are involved in the planning process. The movement to extend advice services is likely being accelerated by turbulent markets, as advisors who base their value to investors on investment performance have suffered more than those with broad advice relationships," says Scott Smith, head of Cerulli's intermediary practice.


The problem here, Cerulli explains, is that most retail clients -- those with between $500,000 and $2 million to invest -- "have relatively straightforward service requirements."


But with management and industry opinion pushing advisors toward a more comprehensive service offering, a lot of those estate, charitable, business planning, and private banking services go unused.



Comments (4)

The most read post over the past 12 months has consistently been "The CFP Business Model Needs Help And Here's What You Can Do About"
See it https://advisors4advisors.com/i...o-about-it
agluck , January 19, 2012
Just what I was thinking about. The "sweet spot" in the Cerulli client data -- $500,000 to $2 million -- is telling. As you've pointed out, these people are too wealthy to need much basic planning, but not wealthy enough to need a really complex estate or philanthropic plan. So all these add-on services mostly go unused.
ScottMartin , January 19, 2012
Scott. I am a comprehensive planner who actually does financial plans for all clients. Not one of my clients knows or understands that the MA estate tax is different than the federal or what they can do to minimize both. Not one underatnds the potential uses of life insurance in retiremnet or for LTC or why they may want to put it into a trust. Not one undertands that 100% of your 401k distributions are taxed at ordinary rates while Roth 401k distributions are not taxed. Or that they can maximize their tax flexibility by having taxable savings, 401ks and Roth accounts. The $500,000 to $2,000,000 range is arbitrary at best since my wealthiest clients knew none of this information. They got welathy by focussin on their respective jobs which were not in finance. There is a huge amount to offer wealthier clients in terms of advice and planning.
meridianfinancial , January 23, 2012
Thanks for reading! I like this. Tax planning obviously becomes a much bigger piece of the service platform at this level. Hmmm.
ScottMartin , January 23, 2012

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.