Investors Prefer Holistic Advice, CFP Board Says

Investors Prefer Holistic Advice, CFP Board Says

Contrary to the prevailing belief in this industry that it pays to focus on a niche market, investors actually prefer to work with an advisor who can discuss all areas of their life, a recent survey by the Certified Financial Planner Board of Standards found.

According to the online survey of about 850 adults, more than 81 percent of investors would rather work with an advisor who integrates all areas of their financial life over someone who specializes in one or two areas. The study, conducted by ORC International, surveyed consumers with more than $100,000 in investable assets.

“Consumers want financial advisors to understand and offer guidance on all their financial needs,” said CFP Board CEO Kevin R. Keller, in a statement. “They especially want their entire financial situation and needs to be the focus of an advisor's approach to their finances.”

Yet, specialization has often been a fundamental strategy advisors use to grow their business. Some argue it allows advisors to elevate the quality of services they can offer their clients. In fact, an October 2013 Cerulli Associates report found that advisors who specialize manage double the assets than those who generalize. And many advisors have built large practices specializing in such areas as divorce, widows, tax planning, estate planning or retirees.

When asked about the most important factors in choosing an advisor, about half of investors put knowledge of multiple areas at the top of their list. Thirty-one percent said investment track record was most important, followed by personal referral at 18 percent.

In addition, 66 percent of investors said they would “very concerned” if their advisor had not been given any formal training in comprehensive personal financial planning, to the point where they’d seek another advisor. And 86 percent said they prefer an advisor who has completed a comprehensive certification exam and education program. 

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