FPSB s Global Value of Certification Survey. Insights into how firms value CFP certification South Africa

Transcription

1 FPSB s Global Value of Certification Survey Insights into how firms value CFP certification South Africa

2 Insights into how firms value CFP certification South Africa

3 Index 1. About the report 2. Overview of South Africa s response 3. Research results CFP certification and advisors CFP certification and productivity / profitability CFP certification and compliance / risk CFP certification and clients The public s outlook for financial planning 4. Territory-specific results 5. About Financial Planning Standards Board (FPSB) 6. About Financial Planning Institute of Southern Africa (FPI) 7. About Comparator 3

4 About the report

5 1. About the report Survey conducted on behalf of Financial Planning Standards Board Ltd. (FPSB) by Comparator, an Australian benchmarking organisation with over 10 years experience in wealth management / financial advice benchmarking. FPSB member organisations from 12 territories participated: Australia, Austria, Brazil, Canada, China, Germany, India, Ireland, New Zealand, Singapore, South Africa (on behalf the Financial Planning Institute of Southern Africa) and the US. Value of CFP Certification study questionnaire developed by Comparator, FPSB and participating member organisations. 114 financial services firms received the survey. Firm executives responded directly to Comparator to protect confidentiality and anonymity of responses. 5

6 Overview of South Africa s response

7 2. Overview of South Africa s response Responses represent: 11,405 financial advisors 469 CFP professionals Sectors represented included: 22% financial planning 22% banking 34% insurance 11% brokerage 11% employee benefit 7

8 2. Overview of South Africa s response The profile of the client base in $ was: 22% Mass retail (US $0 to $100,000 in investible assets) 48% Mass affluent (US $100,000 to $1m in investible assets) 30% High net worth (US $1 to $5m in investible assets) The profile of the client base by %: 18% Mass retail 37% Mass affluent 45% High net worth / Ultra high net worth 8

9 2. Overview of South Africa s response The type of financial planning provided by firms was orientated toward comprehensive, with 31% of firms clients receiving modular advice and 69% of firms clients receiving comprehensive advice. The way firms deliver advice to clients is predominantly face-to-face, with 96% of initial advice face-to-face and 4% delivered via telephone or digitally; 78% of ongoing advice is done face-to-face and 22% by telephone / digital. What percentage of clients receive comprehensive or modular financial planning? What percentage of clients receive advice via telephone or digital and what percentage receive advice face to face? 9

10 Research results CFP certification and advisors

11 3. Research results CFP certification and advisors - employment, employment longevity and career advancement 80% of firms viewed CFP accreditation as favourable when employing financial planners / advisors When employing one of two otherwise identical financial advisors/planners, in your selection criteria how would the one with a CFP designation measure up to one without a CFP designation? CFP professionals average longer terms of employment compared to advisors who do not hold CFP certification Do CFP professionals average longer terms of employment with your firm compared to advisors/planners who do not hold the designation? CFP professionals achieve higher rates of career advancement than those who do not hold CFP certification Do CFP professionals see higher rates of career advancement than those who do not hold the designation? 11

12 3. Research results CFP certification and advisors supporting attainment and maintenance of CFP certification Advisors are very well supported by their firms to achieve CFP certification with all firms contributing financially to advisors pursuing CFP certification (60% pay all costs, 40% pay for some costs). Advisors are well supported in maintaining CFP certification with 80% of firms contributing financially to the cost of maintaining CFP certification (40% pay all costs, 40% pay for some costs). Does your firm contribute financially to advisors or planners pursuing CFP certification? Does your firm contribute financially to the costs associated with the renewal of CFP certification? 12

13 3. Research results Impact of CFP certification on advisors careers - CFP certification and advisors and advisor remuneration 40% of the firms surveyed offer rewards to advisors attaining CFP certification. Of the firms offering rewards: 20% offer 5-30% salary increase 20% offer non-monetary benefits Remuneration levels and CFP certification; In only 20% of firms, CFP professionals earn high levels of remuneration than those without certification. Does your firm contribute financially to advisors or planners pursuing CFP certification? Do CFP professionals receive higher compensation / remuneration than those who are not certified? 13

14 3. Research results Impact of CFP certification and advisors growing the number of CFP professionals over the next 12 months Over the next 12 months, the majority of firms plan to grow the number of CFP professionals Based on current CFP professional numbers, this forecast would result in a 9.4% increase in CFP professionals in 12 months 25% expect to increase CFP professional numbers by hiring new advisors. Forecast rate of growth averages 7.8% 50% expect to increase the number of CFP professional by supporting existing advisors to attain CFP certification. Forecast rate of growth averages 15% Do you expect to increase the number of CFP professionals (either supporting existing advisors / planners to get CFP certification or hiring new CFP professionals) in the next 12 months, if so, by what percentage? 14

15 3. Research results Impact of CFP certification and advisors growing the number of CFP professionals over the next three years Over the next three years, the majority of firms plan to grow the number of CFP professionals Based on current CFP professional numbers, this forecast would result in a 13.8% increase in CFP professionals in three years 25% expect to increase CFP professional numbers by hiring new advisors. Forecast rate of growth averages 15.5% 50% expect to increase the number of CFP professional by supporting existing advisors to attain CFP certification. Forecast rate of growth averages 20% Do you expect to increase the number of CFP professionals (either supporting existing advisors / planners to get CFP certification or hiring new CFP professionals) in the next three years, if so, by what percentage? Financial FPSBPlanning Ltd Global Institute Report October of Southern 2013 Africa, July comparator commercial in confidence

16 Research results CFP certification and productivity / profitability

17 3. Research results CFP certification - productivity CFP professionals are more productive according to 60% of the firms surveyed and have a higher rate growth of assets under management, compared to those without CFP certification. Are advisors / planners with CFP certification more productive compared to those with the CFP certification Do CFP professionals see a higher rate of growth of assets under management compared to those who do not hold the designation? 17

18 3. Research results CFP certification - profitability CFP professionals generate higher revenue. 80% of firms indicated that CFP professionals (in general) generate higher levels of revenue than advisors. and 80% of firms saw an increase in business revenue from CFP professionals, compared to those without CFP professionals. Do CFP professionals generate higher levels of revenue per advisor planner compared to those are not certified? Does your revenue improve as a result of employing CFP professionals? 18

19 3. Research results CFP certification - profitability CFP professionals generate higher profit. 80% of firms indicated that CFP professionals (in general) generated higher levels of profit, compared to those without CFP certification and 60% of firms saw an increase in business profitability from CFP professionals, compared to those without CFP certification. Do CFP professionals generate higher levels of profit per Adviser / planner compared to those who are not certified? Does your profit improve as a result of employing CFP professionals?

20 Research results CFP certification and compliance / risk

21 3. Research results CFP certification compliance and risk management In general, firms felt that employing CFP professionals translated to lower compliance and legal risks and fewer complaints. Do CFP professionals present lower compliance and legal risks compared to those who are not certified? Do CFP professionals have fewer complaints against them compared to those who are not certified?

22 3. Research results CFP certification compliance and risk management CFP professionals mean reduced corporate risk and complaints for 60% of firms, having a greater number of CFP professionals lowered their corporate risk and complaints from clients. Has having a greater number of CFP professionals lowered your corporate risk and complaints from clients?

23 Research results CFP certification and clients

24 3. Research results CFP certification and clients Employing CFP professionals has a positive impact on client satisfaction and increases client retention 80% of firms indicated that employing CFP professionals had a positive impact on clients satisfaction with the firm and led to increased client retention. Has employing CFP professionals had a positive impact on your client s satisfaction with the firm? Has employing CFP professionals led to increased client retention?

25 3. Research results CFP certification and clients The majority of firms believe that CFP professionals help differentiate their business 80% of respondents agreed that CFP professionals helped differentiate their firm. 60% of firms identified a growing demand for high net worth clients to be serviced by a CFP professional. Do CFP professionals help differentiate your firm? Is there a growing demand for high net worth clients to be serviced by a CFP professional?

26 Research results The public s outlook for financial planning

27 3. Research results The public s outlook for financial The demand by members of the public for advice from financial planners is seen to be strong over the next 12 months and the next 5 years. In 12 months, 60% of firms expect an increase in the number of people seeking advice from financial planners and 20% for it to remain the same. In 5 years, 60% expect an increase in the number of people seeking advice. In the next 12 months and 5 years, do you expect that the number of people seeking advice from financial planners will increase, decrease or stay the same?

28 3. Research results The public s outlook for financial - the value of financial planning All firms indicated that the public somewhat value or highly value the concept of financial planning 20% selected Highly value with 80% selecting Somewhat value. To what extent do consumers value the concept of financial planning?

29 3. Research results The public s outlook for financial - key things the public value The key things clients value from advisors: 1. Create / preserve wealth 2. Keep clients on track with their financial and life goals 3. Provide a comprehensive picture of the client s finances Key things firms can do to improve the public s trust: 1. Place client s interests first 2. Increase the level of client communication 3. Improve disclosure and transparency

30 Territory-specific results

31 4. Territory-specific results Territory Number of firms Representing ~ 110,000 + Advisers Representing ~ 10,000 + CFP Professionals Australia 9 4,313 1,023 Austria Brazil Canada 9 11,134 3,820 China 10 71,964 3,267 Germany 6 2, India Ireland New Zealand 5 1, Singapore 4 4, South Africa 5 11, US 5 10,332 1,265 Total ,117 11,568 31

32 About Financial Planning Standards Board (FPSB)

33 5. About Financial Planning Standards Board (FPSB) Financial Planning Standards Board (FPSB) manages, develops and operates certification, education and related programmes for financial planning organisations to benefit the global community by establishing, upholding and promoting worldwide professional standards in financial planning. FPSB demonstrates its commitment to excellence with the marks of professional distinction CFP, CERTIFIED FINANCIAL PLANNER and CFP Logo Mark. FPSB has a nonprofit member organisation in the following 25 territories: Australia, Austria, Brazil, Canada, Chinese Taipei, Colombia, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Japan, Malaysia, New Zealand, the Netherlands, the People s Republic of China, the Republic of Korea, Singapore, South Africa, Switzerland, Thailand, the United Kingdom and the United States. In 2013, there were more than 153,376 CFP professionals worldwide. 33

34 About Financial Planning Institute of Southern Africa (FPI)

35 6. About Financial Planning Institute of Southern Africa (FPI) The Financial Planning Institute of Southern Africa (FPI), the South African Qualifications Authority (SAQA) recognised professional body for financial planners, which serves the public by ensuring that people who carry the CFP designation are qualified, experienced and professional. FPI is recognised internationally and is a founding and a current affiliate member of the international Financial Planning Standards Board Ltd (FPSB) based in the USA, along with 24 other affiliate member countries who offer CFP certification, the highest recognised professional designation worldwide for a financial planning professional. The Institute was originally formed in 1981 as the Institute of Life and Pension Advisors (ILPA) to improve levels of professionalism amongst financial planners and advisors. To ensure that financial planners in South Africa met international standards, in 1998, the Financial Planning Institute affiliated with the Certified Financial Planner Board of Standards in the United States and in April 2000 adopted its new name to more accurately reflect its role as the custodian of competency and ethical standards. 35

36 About comparator

37 7. About comparator Market leaders in performance benchmarking in the financial services sector comparator serves the overwhelming majority of premier financial institutions in Australia with confidential peer-group studies using sophisticated market diagnostic and performance benchmarking techniques comparator provides business benchmarking, market diagnostics and quantitative research services to premier financial institutions. The firm has been providing benchmarking services for over 10 years. The firm delivers detailed insights through annual, six-monthly and ad hoc studies into the market dynamics, business economics, productivity and efficiency of peer businesses and sectors in defined financial product markets or associations. Regular studies are conducted for key product markets in the wealth management and retail financial services sectors ie: Financial planning divisions of the major banks and institutions including (listed and independently owned financial planning businesses and superannuation fund financial advice services); Superannuation and nonsuperannuation platform providers including institutions, industry funds, corporate funds and public sector funds; Private client wealth advisory businesses local and international; Home loan divisions of the major, regional and international banks, and non-bank lenders; Term deposits, savings and transaction accounts of the major, regional and international banks; Risk insurance life, TPD, income protection, Trauma; Agri-business banking; and Mortgage broking. All comparator's services deploy rigorous quantitative analytical technique. All studies use exhaustive techniques for measurement, comparison and interpretation to offer meaningful insights. 37