Filed Under:Your Practice, Sales Marketing

Cerulli: Many Self-Described Financial Planners Actually Only Offer Investment Services

The expertise of nearly one-third of advisors who call themselves financial planners actually is limited to investments.

Cerulli Associates, Boston, published this startling finding in a January 19 report, “Cerulli Quantitative Update: Advisor Metrics. The annual report is based on proprietary surveys of more than 50 broker/dealers, 100 asset managers and 1,900 individual advisors.

Fifty-nine percent of the respondents surveyed describe themselves as financial planners, but only 30% actually practice financial planner, Cerulli reports. The differential is even more pronounced among advisors who label themselves investment planners (22%) versus those practice investment planning (56%).

“Firms have encouraged their advisors to expand their advice relationships with clients, [but] advisors tend to overstate the degree to which they are involved in the planning process,” says Cerulli Associate Director Scott Smith in a prepared statement of the report. “The movement to extend advice services is likely being accelerated by turbulent markets, as advisors who base their value to investments on investment performance have suffered more than those with broad advice relationships.

The Cerulli report notes a much smaller discrepancy between who report their practice as wealth management (11%) and are actually wealth managers (6%). No discrepancy is founded among money managers (9% versus 9%).

The report further notes that more advisors plan to offer clients either comprehensive or “modular” (issue-focused) financial planning next year.

Fifty percent of the respondents say they will offer comprehensive financial planning year as compared to this year. Similarly, 24% plan to offer modular planning in 2013 as compared to 20% currently.

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