2009
2009 National Consumer
Survey on Personal Finance
Mission Statement

The mission of Certified Financial Planner Board of Standards, Inc. is
to benefit the public by granting ...
Table of Contents
1. Introduction                                                                          2
2. Survey Met...
2009 National Consumer Survey on Personal Finance


1. Introduction

Certified Financial Planner Board of Standards (CFP Bo...
2009 National Consumer Survey on Personal Finance


2. Methodology

CFP Board’s 2009 National Consumer Survey on Personal ...
2009 National Consumer Survey on Personal Finance


3. Respondent Characteristics

The following tables show demographic a...
2009 National Consumer Survey on Personal Finance




Table 3.3 Investable assets (Q32)
              3%
                 ...
2009 National Consumer Survey on Personal Finance




     Table 3.5         Ethnicity (S-5)

                    4%      ...
2009 National Consumer Survey on Personal Finance




Table 3.7         Regions by state1 (S-4/REGN)

                    ...
2009 National Consumer Survey on Personal Finance


4. Core Questions

All 1,742 respondents answered a series of Core Que...
2009 National Consumer Survey on Personal Finance




Table 4.2         Important financial planning issues by respondent e...
2009 National Consumer Survey on Personal Finance




     Table 4.3      Ability to successfully manage important financia...
2009 National Consumer Survey on Personal Finance




Table 4.5        Currently have a written financial plan (Q2)

Two-th...
2009 National Consumer Survey on Personal Finance




     Table 4.7         If Financial Plan In-Place Now or in the Past...
2009 National Consumer Survey on Personal Finance


5. Baseline Perceptions and Behaviors

All 1,742 respondents were aske...
2009 National Consumer Survey on Personal Finance




     Table 5.2          Awareness of certifications, licenses, and of...
2009 National Consumer Survey on Personal Finance




Table 5.4         Credential with best single reputation for ethical...
2009 National Consumer Survey on Personal Finance

6. Respondents Who Have Written Financial Plan In-Place With
Involvemen...
2009 National Consumer Survey on Personal Finance
       Respondents with Written Financial Plan Developed with Involvemen...
2009 National Consumer Survey on Personal Finance
   Respondents with Written Financial Plan Developed with Involvement of...
2009 National Consumer Survey on Personal Finance
       Respondents with Written Financial Plan Developed with Involvemen...
2009 National Consumer Survey on Personal Finance
Respondents with Written Financial Plan Developed with Involvement of Fi...
2009 National Consumer Survey on Personal Finance
        Respondents with Written Financial Plan Developed with Involveme...
2009 National Consumer Survey on Personal Finance
Respondents with Written Financial Plan Developed with Involvement of Fi...
2009 National Consumer Survey on Personal Finance
     Respondents with Written Financial Plan Developed with Involvement ...
2009 National Consumer Survey on Personal Finance
Respondents with Written Financial Plan Developed with Involvement of Fi...
2009 National Consumer Survey on Personal Finance
       Respondents with Written Financial Plan Developed with Involvemen...
2009 National Consumer Survey on Personal Finance
Respondents with Written Financial Plan Developed with Involvement of Fi...
2009 National Consumer Survey on Personal Finance
       Respondents with Written Financial Plan Developed with Involvemen...
2009 National Consumer Survey on Personal Finance
Respondents with Written Financial Plan Developed with Involvement of Fi...
2009 National Consumer Survey on Personal Finance

7. Respondents Who Have Written Financial Plan In-Place With No
Involve...
2009 National Consumer Survey on Personal Finance
Respondents with Written Financial Plan Developed without Involvement of...
2009 National Consumer Survey on Personal Finance
    Respondents with Written Financial Plan Developed without Involvemen...
2009 National Consumer Survey on Personal Finance



8. Respondents Who Have No Written Financial Plan In-Place
A total of...
Layout 1
Layout 1
Layout 1
Layout 1
Upcoming SlideShare
Loading in...5
×

Layout 1

273

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
273
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Layout 1"

  1. 1. 2009 2009 National Consumer Survey on Personal Finance
  2. 2. Mission Statement The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and uphold- ing it as the recognized standard of excellence for personal financial planning.
  3. 3. Table of Contents 1. Introduction 2 2. Survey Methodology 3 3. Respondent Characteristics 4 4. Core Questions 8 5. Baseline Perceptions and Behaviors 13 6. Respondents Who Have Written Financial Plan In-Place With Involvement of a Financial Professional 16 7. Respondents Who Have Written Financial Plan In-Place With No Involvement of a Financial Professional 29 8. Respondents Who Have No Written Financial Plan In-Place 32 Copyright © 2009, Certified Financial Planner Board of Standards Inc. All rights reserved. 1
  4. 4. 2009 National Consumer Survey on Personal Finance 1. Introduction Certified Financial Planner Board of Standards (CFP Board) sponsored this 2009 National Consumer Survey on Personal Finance to establish baseline data on current consumer personal finance and financial plan- ning related attitudes and behaviors. A nonprofit certifying and standards-setting organization, CFP Board’s mission is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal fi- nancial planning. Consistent with this mission and its role as a source of expertise on the financial plan- ning profession, CFP Board, from time to time, conducts consumer research to: • Understand consumer expectations of financial planners and their satisfaction with the financial planning experience. • Develop demographic, behavioral and attitudinal profiles of consumers who are using financial planners and who are likely to benefit from professional financial planning assistance. • Ascertain the perceived value of financial planning and the CFP® certification by the public. • Gauge shifts in behavior, attitudes and perceptions over time. It is CFP Board’s hope that the periodic evaluation of the information gained from such research will help CFP Board to better fulfill its standards-setting function for the profession and promote consumer understanding of the value of financial planning and the CFP® certification marks. This report summarizes findings in these key areas, describes the survey’s methodology and suggests implications that can be drawn from the research results. Questions about the survey results and inquiries regarding the survey instrument may be directed to CFP Board at: CFP Board 1425 K Street NW, Suite 500 Washington, DC 20005 P: 800-487-1497 F: 202-379-2299 E: media@CFPBoard.org W: www.CFP .net 2
  5. 5. 2009 National Consumer Survey on Personal Finance 2. Methodology CFP Board’s 2009 National Consumer Survey on Personal Finance was conducted by Westat, one of the nation’s largest and most well known survey research firms. The survey was conducted among a large and representative cross section of the U.S. population, as shown in Section 3, so that financial planning subject matter issues could be assessed from the perspective of all major population demographics in the U.S. The survey was conducted via a self-administered Internet-based questionnaire. Westat collected data from 1,742 Internet respondents in mid-May through early June 2009. Section 3 provides extensive documentation of Respondent Characteristics and compares these data with data from the U.S. Census. 3
  6. 6. 2009 National Consumer Survey on Personal Finance 3. Respondent Characteristics The following tables show demographic and profile characteristics of the 1,742 sample respondents com- pared to those of U.S. population based upon U.S. Census estimates. As shown in these tables, respon- dent characteristics are very representative of U.S. population characteristics in virtually all instances. In the detailed findings presented in this report, most data are analyzed by Educational Achievement, Household Income, and Investable Assets. Table 3.1 Education achievement (S-2) College graduate and graduate degree 35% 34% 41% 44% Some college or 2-year degree 24% 23% High school graduate or less Sample Census Table 3.2 Household income (S-3) 5% 5% Over $150,000 8% 10% $100,001 to $150,000 47% 54% 34% 31% $50,001 to $100,000 Sample 1 Census Under $50,000 1 Note: 6% of respondents did not provide Household Income data. 4
  7. 7. 2009 National Consumer Survey on Personal Finance Table 3.3 Investable assets (Q32) 3% Over $1,000,000 23% $100,000 to $1,000,000 56% Under $100,000 Sample 1 Census 2 1 Note: 18% of respondents did not provide Investable Asset data. 2 Note: Not Available from U.S. Census. Table 3.4 Age (S-1/AGEGP) 65 and older 11% 17% 13% 17% 16% 55 to 64 18% 14% 13% 20% 22% 19% 20% 45 to 54 Sample Census 35 to 44 25 to 34 Under 25 5
  8. 8. 2009 National Consumer Survey on Personal Finance Table 3.5 Ethnicity (S-5) 4% 5% Other 12% 11% 13% 13% White or Caucasian 71% 71% Hispanic or Latino Sample 1 Census Black or African American 1 Note: 1% of respondents did not provide Ethnicity data. Table 3.6 Gender (S-6) 43% 57% 49% 51% Female Male Sample Census 6
  9. 9. 2009 National Consumer Survey on Personal Finance Table 3.7 Regions by state1 (S-4/REGN) Northeast Northeast 16% 18% Midwest Midwest West West 23% 22% 24% 23% South South 37% 36% Sample Census 1 Regions are defined in the following way. • Midwest – 12 States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin. • West – 13 States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming. • South – 16 States and District of Columbia: Alabama, Arkansas, Delaware, DC, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia. • Northeast – 9 States: New England States of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut; and Mid-Atlantic States of New York, New Jersey, and Pennsylvania. 7
  10. 10. 2009 National Consumer Survey on Personal Finance 4. Core Questions All 1,742 respondents answered a series of Core Questions which (a) introduced them to the nature and focus of the survey and (b) resulted in their being classified into one of three respondent groups as de- scribed and presented in Sections 6, 7, and 8. All tables in this section are based on 1,742 respondents unless indicated differently in a table footnote. • Section 6: Respondents Who Have Written Financial Plan In-Place With Involvement of a Financial Professional • Section 7: Respondents Who Have Written Financial Plan In-Place With No Involvement of a Financial Professional • Section 8: Respondents Who Have No Written Financial Plan In-Place Table 4.1 Assessment of financial planning issues (Q1-1)* It is clear that most respondents feel that four financial planning issues are most important in their lives: (1) managing retirement income; (2) providing health insurance coverage; (3) managing/re- ducing current debt; and (4) building a retirement fund. Financial Planning Issues Percent1 Generating current income 59 Providing health insurance coverage 55 Managing/reducing current debt 53 Building a retirement fund 51 Building an “emergency” fund 47 Preparing for future medical needs (your or others, e.g., parents) 42 Managing retirement income 40 Providing life insurance coverage 35 Accumulating capital/assets 27 Purchasing/renovating a home 26 Saving for vacation/travel/recreational expenses 25 Managing an unexpected windfall 24 Sheltering income from taxes 24 Managing employee benefits (retirement savings, insurance, health savings accounts, etc.) 23 Building a college fund 22 Building an inheritance for heirs 20 Financing your own business 16 1 Percents show sum of two “most important” response categories on a 6-point scale. *Parenthetical notes refer to the number assigned to questions as they appeared on the survey instrument. The survey instrument is available from CFP Board upon request. 8
  11. 11. 2009 National Consumer Survey on Personal Finance Table 4.2 Important financial planning issues by respondent education, household income, and investable assets (Q1-1) For the most part, it appears that a respondent’s investable asset level most influences perceptions of financial planning issues. Respondents with high levels of investable assets give relatively low importance ratings on the generation of current income, provision of healthcare coverage, and managing debt. Similarly, respondents with high household incomes also give relatively low im- portance ratings on providing healthcare coverage and managing debt. Building a retirement fund is relatively unimportant to respondents with low education and income levels. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K Important $1 ML > < $50 K Financial Planning Issues1 Generating current income 60% 59% 57% 60% 60% 50% 62% 62% 56% 49% Providing health insurance coverage 57 57 51 56 56 59 46 55 59 44 Managing/reducing current debt 56 58 48 58 54 43 41 61 45 25 Building a retirement fund 49 51 53 46 57 50 55 50 58 51 1 Percents show sum of two “most important” response categories on a 6-point scale. 9
  12. 12. 2009 National Consumer Survey on Personal Finance Table 4.3 Ability to successfully manage important financial issues (Q1-2) A relatively large proportion of respondents feel that they have a good (48%) or average (43%) ability to manage financial issues that are important in their lives. Only 9% of respondents felt that they have a poor ability to manage important financial issues. Ability to Manage Percent Very good 20 Good 28 Somewhat good 29 Somewhat poor 14 Poor 5 Very poor 4 Table 4.4 Ability to manage important issues by respondent education, household income, and investable assets (Q1-2) For the most part, respondent ratings of their ability to manage important financial issues do not vary by respondent education levels. However, respondents with higher household incomes and more investable assets rate their ability to manage important financial issues at higher levels than their counterparts in other categories. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Ability Very good 20% 20% 20% 18% 21% 19% 29% 16% 26% 40% Good 23 32 30 23 29 40 44 25 34 46 Somewhat good 29 26 30 29 30 26 21 32 27 11 Somewhat poor 16 14 12 18 12 10 3 17 8 2 Poor 5 5 4 6 5 1 2 6 2 2 Very poor 6 2 2 5 3 3 0 4 2 0 10
  13. 13. 2009 National Consumer Survey on Personal Finance Table 4.5 Currently have a written financial plan (Q2) Two-thirds (64%) of respondents in this survey do not have a written financial plan in-place to guide their personal financial affairs Conversely, only 17% have a written and regularly updated financial plan in-place. Some respondents have a financial plan that is not updated regularly (8%) or had a plan in-place in the past but not at the current time (11%). Financial Plan In-Place Percent Yes, written plan in-place now and updated regularly 17 Yes, written plan in-place now but not updated in past year 8 No, not now but a written plan was in-place in the past 11 No, never had a written plan in-place 64 Table 4.6 Written financial plan by respondent education, household income, and investable assets (Q2) Respondents with at least a college degree, those with higher household incomes, and those with more investable assets are more likely to have a written financial plan in-place than their counter- parts with lower education, income, and asset levels. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Financial Plan In-place and regularly updated 11% 18% 23% 11% 20% 28% 33% 11% 30% 38% In-place but not updated in past year 4 10 10 6 9 11 12 6 13 16 In-place in the past 8 13 13 9 12 11 17 11 11 11 No, never had a plan 77 59 54 74 59 50 38 72 46 35 11
  14. 14. 2009 National Consumer Survey on Personal Finance Table 4.7 If Financial Plan In-Place Now or in the Past: Financial planning resources used for plan development (Q3) Many respondents with a written personal financial plan used an “outside” financial professional (38%) to develop their plan though a larger percent of respondents (42%) chose to develop their financial plan using their own capabilities (including those respondents who develop their own plans and those who use planning software as part of their personal financial planning efforts). Family members who are (8%) and who are not (12%) financial professionals assist some respon- dents in the development of financial plans. Financial Resources Percent1 Working with an “outside” financial professional 38 Developing your financial plan on your own 37 Working with a family member or friend who is not a financial professional 12 Working with a family member or friend who is a financial professional 8 Using planning software or an Internet-based application on your own 5 1 Percents based on 621 respondents. Table 4.8 Use of “outside” professional or own plan development by respondent education, household income, and investable assets (Q3) Respondents with at least a college degree, those with higher household incomes, and those with more investable assets are more likely to use an “outside” financial professional than their counter- parts with lower education, income, and asset levels. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Financial Plan In-place and regularly updated 26% 30% 49% 26% 39% 54% 53% 25% 53% 67% In-place but not updated in past year 46 42 29 50 33 18 33 49 21 17 12
  15. 15. 2009 National Consumer Survey on Personal Finance 5. Baseline Perceptions and Behaviors All 1,742 respondents were asked a series of questions that examined their perceptions of credentials in financial planning and information sources used to gain financial information. Table 5.1 Awareness of certifications, licenses, and official designations (Q26) Respondents have the greatest current awareness of the CPA (53%) and CFP® certification (28%) credentials though 40% of all respondents were not aware of any credential for financial profes- sionals. Credentials for Financial Professionals Percent1 CPA (Certified Public Accountant) 53 CFP® (CERTIFIED FINANCIAL PLANNER™) 28 CFA (Chartered Financial Analysis) 13 CLU (Chartered Life Underwriter) 12 PFS (Personal Financial Specialist) 10 RIA (Registered Investment Advisor) 10 ChFC (Chartered Financial Consultant) 5 Not aware of any credential 40 1 Data show percent of 1,742 respondents who selected each response category and, as a result, multiple responses were permitted and column does not sum to 100%. 13
  16. 16. 2009 National Consumer Survey on Personal Finance Table 5.2 Awareness of certifications, licenses, and official designations by investable assets (Q26) It is clear that awareness of certifications, licenses, and official designations for financial profession- als is related to the level of a consumer’s investable assets (i.e., greater awareness levels if found among consumers with over $1 ML in investable assets). Assets1 Credentials for Financial Professionals Under $100,000 - Over $100,000 $1,000,000 $1,000,000 CPA (Certified Public Accountant) 53% 61% 69% CFP® (CERTIFIED FINANCIAL PLANNER™) 23 41 49 CFA (Chartered Financial Analysis) 9 21 31 CLU (Chartered Life Underwriter) 9 19 29 PFS (Personal Financial Specialist) 8 13 24 RIA (Registered Investment Advisor) 9 12 18 ChFC (Chartered Financial Consultant) 4 19 29 Not aware of any credential 43 23 25 1 Percents are responses for each certification in Table 5.1 by respondent’s investable assets. Table 5.3 Single certification, license, or official designation has best reputation for ethical conduct (Q27) While many respondents (33%) did not express an opinion, the CPA (38%) and CFP® certification (17%) credentials were viewed to be those credentials with the best reputations for ethical conduct by most respondents. Credentials for Financial Professionals Percent1 CPA (Certified Public Accountant) 38 CFP® (CERTIFIED FINANCIAL PLANNER™) 17 PFS (Personal Financial Specialist) 3 CFA (Chartered Financial Analysis) 2 ChFC (Chartered Financial Consultant) 2 CLU (Chartered Life Underwriter) 2 RIA (Registered Investment Advisor) 2 Did not select a credential 33 1 Percents based upon 1,045 respondents who identified one or more credentials in Table 5.1. 14
  17. 17. 2009 National Consumer Survey on Personal Finance Table 5.4 Credential with best single reputation for ethical conduct by respondent education, household income, and investable assets (Q27) Respondent ratings on whether the CPA or CFP® certification is the single credential with the best reputation for ethical conduct do not vary by respondent education, household income, and in- vestable assets. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college Best Single Credential College > $150 K > < $100 K $1 ML > < $50 K for Ethical Conduct1 CPA (Certified Public Accountant) 35% 44% 36% 38% 37% 36% 42% 37% 38% 38% CFP® (CERTIFIED FINANCIAL PLANNER™) 15 14 21 15 18 22 19 14 23 24 Don’t know 32 33 34 32 35 33 30 38 26 26 1 Percents based upon 1,045 respondents who identified one or more credentials in Table 5.1. Table 5.5 Unaided Recall: Thinking about “CFP” – What first comes to mind? (Q28) A large proportion of respondents (63%) answering this open-end question associate favorable perceptions with the term “CFP.” Reaction or Mindset Percent1 Favorable Responses: Educated and qualified professional; provides advice on spending or 63 investing money; and manages personal finances and investments for a fee Unfavorable Responses: Question honesty; trustworthiness; legitimacy; capability and 22 training; expenses or fees: and value of services Miscellaneous responses 15 1 Percents based on 655 total answers from 628 respondents who answered this question (i.e., 62% of all respondents did not answer this question). 15
  18. 18. 2009 National Consumer Survey on Personal Finance 6. Respondents Who Have Written Financial Plan In-Place With Involvement Of A Financial Professional A total of 284 respondents have a written financial plan in-place at present and a financial professional was involved in developing these plans. All tables in this section are based upon 284 respondents unless indicated differently in a table footnote. Table 6.1 Financial planning needs most important in motivating use of a financial professional (Q3) Four issues most motivate respondent’s use of a financial professional for the development of a written financial plan: (1) retirement goals and planning; (2) advice on a broad range of financial matters; (3) savings goals and planning; and (4) investment goals and planning. Financial Planning Needs Percent1 Retirement goals and planning 62 Wanted advice on a broad range of financial matters 48 Savings goals and planning 41 Investment goals and planning 36 Balancing short- and long-term goals and planning 28 Estate planning 27 Cash and debt management 27 Tax planning 21 Insurance planning 17 Education funding 16 Stock option strategies 14 Multi-generational and family planning 12 Charitable giving and philanthropy goals and planning 8 Employee benefits planning 8 Change in marital status 7 Other motivating factors 2 1 Data show percent of 284 respondents who selected each response category and, as a result, multiple responses were permitted and column does not sum to 100%. 16
  19. 19. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.2 Important financial planning motivations by respondent education, household income, and investable assets (Q4) Respondents in each education, income, and asset level subsegment assign a similar degree of importance to the four most important financial planning needs identified in Table 6.1. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K Financial Planning Needs1 $1 ML > < $50 K Retirement goals and planning 17% 22% 61% 21% 48% 19% 13% 29% 62% 9% Wanted advice on broad financial matters 16 23 61 22 46 17 16 32 54 15 Savings goals and planning 22 23 54 24 47 21 8 40 52 8 Investment goals and planning 17 20 63 21 44 22 12 29 61 10 1 Percents show education, income, and asset levels of each respondent who selected the “most important” financial planning issues in Table 6.1. Table 6.3 Financial professionals interviewed and selected for development of the financial plan (Q5-1 and 5-2) Respondents most frequently interview-consider and use three types of financial professional when developing their financial plans: (1) CERTIFIED FINANCIAL PLANNER™ professionals; (2) financial advisors; and (3) accountant/CPAs. Interviewed/ Worked With Financial Professionals Considered1 or Used CERTIFIED FINANCIAL PLANNER™ professional 43 38 Financial Advisor 33 25 Accountant/CPA 26 12 Attorney 16 8 Banker 8 5 Insurance agent 7 4 Stock broker 7 3 Financial planner (not certified) 5 2 Another professional 4 3 1 Data show percent of 284 respondents who selected each response category and, as a result, multiple responses were permitted and columns do not sum to 100%. 17
  20. 20. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.4 Financial professionals interviewed and selected for the development of a financial plan by investable assets (Q5-1 and 5-2) Respondents with investable assets over $1 ML more frequently interview or consider a broader array of financial professionals for financial plan development than consumers with lower levels of investable assets. However, consumers in all segments tend to most frequently use a CFP® profes- sional or “financial advisor” for the development of their financial plans. Assets Under $100,000 - Over Financial Professionals $100,0001 $1,000,0001 $1,000,0001 Interviewed/ Worked With Interviewed/ Worked With Interviewed/ Worked With Considered or Used Considered or Used Considered or Used CERTIFIED FINANCIAL PLANNER™ professional 36% 33% 41% 43% 63% 56% Financial advisor 28 25 32 27 26 15 Accountant/CPA 19 10 22 10 37 7 Attorney 7 5 12 9 33 15 Banker 11 8 5 4 7 4 Insurance agent 12 7 4 12 7 0 Stock broker 6 2 8 13 7 4 Financial planner (not certified) 11 6 3 1 0 10 Another professional 6 4 3 3 0 10 1 Percents are responses for each financial professional in Table 6.3 by respondent’s investable assets. 18
  21. 21. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.5 Sources of information used to first learn about the financial professional used to develop respondent’s financial plan (Q6) It is clear that interpersonal information sources – recommendations of family members (31%), friends (27%), and co-workers (13%) – are most frequently used by respondents to learn about those financial professionals used to develop their financial plans. Information Sources Percent1 Recommendation of a family member 31 Recommendation of a friend 27 Recommendation of a coworker 13 Internet site listing financial planners 7 Recommendation of a lawyer 7 Recommendation of a banker 7 Recommendation of an accountant 6 Print advertisement or brochure 5 Television or radio advertisement or program 4 Magazine article or listing of financial planners 3 Other 17 1 Data show percent of 284 respondents who selected each response category and, as a result, multiple responses were permitted and columns does not sum to 100%. Table 6.6 Financial professional used to develop plan provided credible and competent services (Q7) In overall terms, a large proportion of respondents (80%) felt that their financial professional pro- vided credible and competent services. Perceptions of Financial Planning Services Percent Definitely yes 56 Yes 24 Probably yes 11 Probably no 5 No 2 Definitely no 2 19
  22. 22. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.7 Credibility and competent services by respondent education, household income, and investable assets (Q7) Respondent perceptions of their financial professional’s credibility and competency do not vary by their education, income, and asset levels. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Credible-Competent Services Definitely yes 61% 58% 54% 55% 54% 63% 70% 57% 55% 67% Yes 11 26 27 23 24 21 21 21 23 26 Probably yes 9 10 12 11 15 13 3 15 12 4 Probably no 11 4 4 3 7 2 6 4 7 4 No 4 0 1 3 1 0 0 0 2 0 Definitely no 4 1 1 5 1 2 0 5 1 0 Table 6.8 Credibility and competent services by type of financial professional (Q7) Respondents using CFP® professionals, financial advisors, and accountant/CPAs all strongly believe that their financial professional provides credible and competent services. Credible-Competent Services Definitely yes Definitely no Probably yes Probably no Financial Professional1 Yes No CERTIFIED FINANCIAL PLANNER™ professional 57% 24% 12% 4% 1% 2% Financial advisor 51 26 13 9 0 1 Accountant/CPA 69 17 3 6 0 3 1 Financial professionals identified by respondents in Table 6.3. 20
  23. 23. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.9 Year current plan put in-place (Q8) Recognizing that 29% of respondents could not recall a date, a large proportion of respondents (39%) put their written financial plans in-place in the 2001 to 2009 period and another 24% re- ported doing so in the 1991 to 2000 timeframe. Year Put In-Place Percent 1980 or before 2 1981 to 1990 6 1991 to 2000 24 2001 to 2009 39 Can’t recall 29 Table 6.10 Respondent benefit from having a written financial plan (Q9) A large proportion of respondents (65%) strongly believe that they have benefitted from the devel- opment of a written financial plan. Written Financial Plan Beneficial Percent Definitely yes 46 Yes 19 Probably yes 17 Probably no 7 No 4 Definitely no 2 Don’t know 5 21
  24. 24. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.11 Benefit from having a written financial plan by respondent education, household income, and investable assets (Q9) Respondent’s favorable perceptions of the benefits of having a written financial plan do not vary by education, income, or asset levels. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Benefit Definitely yes 43% 45% 48% 39% 46% 50% 61% 40% 51% 44% Yes 28 14 19 15 19 27 12 19 16 30 Probably yes 15 16 18 20 15 15 24 21 14 19 Probably no 4 10 8 8 9 6 3 8 8 4 No 4 6 3 3 6 0 0 4 5 0 Definitely no 4 3 2 5 2 2 0 6 2 0 Table 6.12 Benefit from having a written financial plan by type of financial professional (Q9) Respondents using CFP® professionals, financial advisors, and accountants/CPAs all strongly feel that they have benefitted from a written financial plan. Written Financial Plan Beneficial Definitely yes Definitely no Probably yes Probably no Financial Professional1 Yes No CERTIFIED FINANCIAL PLANNER™ professional 53% 16% 17% 6% 3% 3% Financial advisor 44 21 14 10 4 3 Accountant/CPA 40 31 14 6 3 3 1 Financial professionals identified by respondents in Table 6.3. 22
  25. 25. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.13 Use of financial professional in current economic environment (Q10) In the current economic environment, 36% of respondents have tended to use their financial professionals to a greater extent than in the past though 44% tend to use their financial profes- sional at present to about the same degree as in the past. Financial Planner Use: Increase or Decrease Percent Definitely greater extent 19 Greater extent 17 Probably greater extent 30 Probably lesser extent 14 Lesser extent 5 Definitely lesser extent 8 Don’t know 6 Table 6.14 Length of time working with current financial professional (Q11) While 19% can’t recall, it is interesting to note that 33% of respondents have worked with their current financial professional between 2 and 5 years while 40% have done so for 6 years or longer. Only 8% have worked with their current financial professional for 1 year or less. Number of Years Percent 1 year or less 8 2 to 5 years 33 6 to 10 years 17 11 years or longer 23 Can’t recall 19 23
  26. 26. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.15 Length of time working with current financial professional by respondent education, household income, and investable assets (Q11) Respondents with higher education, income, and asset levels tend to work with financial professionals for longer periods of time than their counterparts in other sample population subsegments. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Number of Years 1 year or less 19% 11% 7% 15% 12% 7% 0% 20% 8% 0% 2 to 5 years 43 39 41 44 43 40 33 45 35 56 6 to 10 years 16 25 21 15 23 23 20 18 24 12 11 years or longer 22 25 31 27 23 30 47 17 34 32 Table 6.16 Length of time working with current financial professional by type of financial professional (Q11) Accountants/CPAs tend to have particularly long relationships with their clients though, for the most part, CFP® professionals and financial advisors also appear to have solid and multi-year rela- tionships with their clients as well. 1 Year 2 to 5 6 to 10 11 Years Financial Professionals1 or Less Years Years or Longer CERTIFIED FINANCIAL PLANNER™ professional 11% 37% 23% 29% Financial advisor 12 31 26 21 Accountant/CPA 3 31 17 48 1 Financial professionals identified by respondents in Table 6.3. 24
  27. 27. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.17 Excluding Current Financial Professional: Number of financial professionals worked with in the past (Q12) While a large proportion of respondents indicate that they have not worked with another financial professional in the past (43%) or could not recall if they had worked with someone other than their current financial professional in the past (16%), most respondents have worked with one (20%) or two (12%) other financial professionals sometime in the past. Number of Financial Professionals Percent None – no other financial professional 43 One other financial professional 20 Two other financial professionals 12 Three other financial professionals 5 Four or more other financial professionals 4 Can’t recall 16 Table 6.18 If Worked With Other Financial Professionals in the Past: Reasons for switching from last to current financial professional (Q12) It appears that respondents switch from one financial professional to another for a variety of almost equally important reasons though a qualifications upgrade (44%) is viewed to be the most impor- tant factor motivating a change in their relationships with a financial planner. Number of Financial Professionals Percent1 Wanted to switch to a more qualified professional (Q12-5) 44 My financial situation changed (Q12-1) 32 Could not trust advice and recommendations of the previous financial professional (Q12-4) 27 Had a bad experience with the previous financial professional (Q12-5) 27 Previous financial professional was too expensive (Q12-2) 21 1 Percents are based upon 116 respondents and show sum of two “most important” response categories on a 6-point scale. 25
  28. 28. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.19 Confidence that financial professional used by respondent places respondent’s interest ahead of their own interests (Q14) A large proportion of respondents are confident that their financial professional places their interests ahead of their own. Confidence Percent1 Very confident 46 Confident 27 Somewhat confident 16 Somewhat not confident 4 Not confident 2 Definitely not confident 2 Don’t know 3 Table 6.28 Confidence that designated financial professional places respondent’s interests ahead of their own by respondent education, household income, and investable assets (Q14) Confidence in a respondent’s financial professional to put their client’s interests ahead of their own vary by respondent education, income, and assets. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K $1 ML > < $50 K Confidence Very confident 53% 49% 43% 41% 46% 46% 61% 45% 47% 48% Confident 24 25 29 29 29 23 21 30 25 22 Somewhat confident 15 17 16 15 15 23 9 16 14 22 Somewhat not confident 0 1 6 3 3 4 6 2 5 4 Not confident 2 6 1 3 2 2 0 0 5 0 Definitely not confident 6 1 1 6 2 0 0 5 2 0 26
  29. 29. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.29 Confidence that designated financial professional places respondent’s interests ahead of their own by financial professional (Q14) Confidence in a respondent’s use of a specific financial professional does not vary across their use of CFP® professionals, financial advisors, or accountant/CPAs in the development of their written financial plans. Financial Professional1 Confidence CERTIFIED FINANCIAL Financial Accountant/ PLANNER™ Professional Advisor CPA Very confident 44% 49% 54% Confident 28 24 26 Somewhat confident 18 19 11 Somewhat not confident 4 3 3 Not confident 1 1 3 Definitely not confident 2 1 3 Don’t know 3 3 0 1 Financial professionals identified by respondents in Table 6.3. Table 6.30 Importance of financial professionals meeting requirements (Q15) Respondents feel that it would be important for financial professions to meet a variety of require- ments, particularly those related ethics and practice standards. Requirements Percent1 Adhere to a professional code of ethics (Q15-5) 89 Adhere to professional practice standards (Q15-4) 87 Face enforcement and possible disciplinary action for violations of ethics and practice 80 standards (Q15-6) Fulfill ongoing continuing education requirements (Q15-7) 73 Complete a specified amount of practical financial planning related work (Q15-3) 73 Pass a comprehensive examination (Q15-2) 69 Complete a curriculum specific to financial planning (Q15-1) 68 1 Percents show sum of two “most important” response categories on a 6-point scale. 27
  30. 30. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed with Involvement of Financial Professional Table 6.31 Preference for compensation of financial professionals (Q16) While 19% of respondents don’t know, most respondents (38%) prefer to compensate financial professionals through fees set at a flat or hourly rate though another 33% of respondents favor fees calculated as a percentage of assets managed by a financial professional for a client. Compensation Percent1 Fees set at a flat or hourly rate 38 Fees calculated as a percentage of assets managed for a client 33 Commissions based on financial products they sell 23 Don’t know 19 1 Data show percent of 284 respondents who selected each response category and, as a result, multiple responses were permitted and column does not sum to 100%. 28
  31. 31. 2009 National Consumer Survey on Personal Finance 7. Respondents Who Have Written Financial Plan In-Place With No Involvement Of A Financial Professional A total of 335 respondents have a written financial plan in-place at present though a financial professional was not involved in developing these plans. All tables in this section are based upon 335 respondents un- less indicated differently in a table footnote. Table 7.1 Year current plan put in-place (Q17) A large proportion of respondents (56%) indicate that they developed their current financial plans in the last 8 years though 27% could not recall when their plan was developed. Year Put In-Place Percent 1980 or before 1 1981 to 1990 4 1991 to 2000 12 2001 to 2009 56 Can’t recall 27 Table 7.2 Respondent benefit from having a written financial plan (Q18) A large proportion of respondents (48%) feel that they derive significant benefits from having a written financial plan. Written Financial Plan Beneficial Percent Definitely yes 33 Yes 15 Probably yes 25 Probably no 14 No 4 Definitely no 5 Don’t know 5 29
  32. 32. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed without Involvement of Financial Professional Table 7.3 Benefits from having a written financial plan by respondent education, household income, and investable assets (Q18) Views on the benefits of having a written financial plan do not vary by respondent education, income, and asset levels. Education Income Assets $100 K - $150 K $100 K - $1 ML $50 K - $100 K < High school Some college College > $150 K > < $100 K Written Financial Plan $1 ML > < $50 K Beneficial Definitely yes 35% 35% 30% 31% 33% 42% 46% 33% 33% 44% Yes 11 13 20 15 15 17 5 15 13 0 Probably yes 24 23 28 24 26 25 14 25 28 11 Probably no 11 19 13 15 15 4 27 14 16 33 No 6 3 2 4 4 0 0 4 1 0 Definitely no 6 4 4 6 4 4 5 5 5 0 Don’t know 6 4 3 5 4 8 5 5 3 11 1 Data collapsed from a 6-point scale. 30
  33. 33. 2009 National Consumer Survey on Personal Finance Respondents with Written Financial Plan Developed without Involvement of Financial Professional Table 7.4 Importance of reasons for not working with a financial planner (Q19) When developing their financial plans, respondents choose not to work with a financial profesional for two major reasons: (1) expense of services (60%) and (2) uncomplicated financial affairs (55%). Reasons Percent1 Financial professionals are too expensive (Q19-2) 60 My financial affairs are not complicated (Q19-1) 55 Many people claim to be financial planners, and it is hard to know who provides the best 40 planning services (Q19-4) Could not trust advice and recommendations of a financial professional (Q19-5) 22 Had a bad experience with a financial professional (Q19-3) 19 1 Percents show sum of two “most important” response categories on a 6-point scale. Table 7.5 Preference for compensation of financial professionals (Q21) While 27% of respondents don’t know, most respondents with an opinion (45%) prefer to compensate financial professionals through fees set at a flat or hourly rate. Compensation Percent1 Fees set at a flat or hourly rate 45 Fees calculated as a percentage of assets managed for a client 23 Commissions based on financial products they sell 16 Don’t know 27 1 Data show percent of 335 respondents who selected each response category and, as a result, multiple responses were permitted and column does not sum to 100%. 31
  34. 34. 2009 National Consumer Survey on Personal Finance 8. Respondents Who Have No Written Financial Plan In-Place A total of 1,122 respondents have no written financial plan in-place at present. All tables in this section are based upon 1,122 respondents unless indicated differently in a table footnote. Table 8.1 Work with financial planners in any capacity (Q22 and 22-1) While many respondents (49%) were not able to identify a financial professional they have used in any capacity or as a primary service provider, it is clear that respondents have a tendency to work with a variety of different financial professionals to a lesser or greater degree. Used in Any Primary Financial Financial Professionals Capacity1 Professional2 Accountant/CPA 9% 26% Banker 15 24 Financial advisor 7 12 Insurance agent 8 12 Stock broker 4 10 CERTIFIED FINANCIAL PLANNER™ professional 3 7 Attorney 3 5 Financial planner (not certified) 3 0 Another financial professional 7 3 Did not identify a financial professional 49 -- 1 Data show percent of 1,122 respondents who selected a response category and, as a result, multiple responses were permitted and column does not sum to 100%. 2 Primary financial professional was identified by respondents who used multiple financial professionals in any capacity and these percents do not include respondents who selected only one financial profession or “used in any capacity.” 32

×