Introduction
As part of its ongoing efforts to add more value to the services
it provides to the financial planning community, Financial
Planners Standards Council (FPSC) commissioned this study
to examine job satisfaction and the quality of work-life for
professionals offering financial planning services. Hart &
Associates Management Consultants Ltd. received and analyzed
the responses to a questionnaire that was distributed to all
CFP professionals (approx. 11,000) during the first three weeks
of November 2000. The profile of the survey participants closely
matches the profile of the existing CFP professional base, which
represents the largest identifiable body of financial planners
in Canada. The response to this survey was tremendous. Hart
& Associates received 1,200 completed questionnaires (representing
just over 10 per cent of all CFP professionals in Canada). Therefore,
the findings of this study are a very accurate reflection
of the opinions of professional financial planners in Canada
today.
How was the survey conducted?
Surveys were distributed at the end of October by Financial
Planners Standards Council as part of its regular newsletter
to financial professionals in all segments of the advisory
industry holding the designation, Certified Financial Planner
(CFP). Study participants forwarded their returns directly
to Hart & Associates Management Consultants and were given
the choice to do so by fax or online.
How was the survey analyzed?
The 1,200 returned surveys were tabulated and the results
were analyzed according to the following categories: marital
status, industry sector, years offering professional financial
planning advice, level of education, age of the financial
professional, average client net worth, gender, advisor earnings,
size of the community served and region of the country.
Highlights:
How do planners rate their
profession? Overall, financial planners are satisfied with their
career choice. The vast majority of them would choose the
profession all over again and the longer they've been in the
industry, the happier they are with their work.
What do planners like
about their jobs?
Compensation:
Planners feel well compensated
for the work that they do.
Ratings are higher among
men, those who are married, those living in large urban
areas and the Maritimes, advisors with more than 10 years
offering financial planning services, and advisors with
wealthier clients and higher incomes.
Job security:
There is a very strong sense
of job security for those working as financial professionals.
This is highest for men,
those living in the suburbs and the Maritimes, advisors
with higher average client net worth and incomes, the self-employed
and those with accounting firms
Financial Security:
Most of those surveyed feel
that they have chosen a profession that will provide sufficient
financial security for the future. Men feel this more strongly
than women, as do those with higher incomes and wealthier
clients.
The self-employed and those
with planning, securities and insurance groups are the most
confident on this issue. Those in the suburbs feel the least
confident.
Feeling on track:
Planners collectively feel
on track to achieving their career goals giving their progress
a 7.7 rating on a 10-point scale with 60 % rating their
achievements in this area 8 or higher.
Those feeling most on track
are men, those offering advice for more than 10 years, planners
in Ontario and the Maritimes, and those working in the securities
and insurance sectors.
Those feeling least on track
are planners in for mutual fund companies and credit unions
with less than 50 % of themselves a rating of 8 or higher.
What would planners like to see changed?
When asked to offer suggestions as to how the industry
could be changed for the better, the most common responses
are:
1. Enforce one standard, mandatory designation for all people
using the term financial planner.
2. Minimize unnecessary "red tape" and compliance
issues that respondents feel get in the way of providing
service to their clients.
3. Raise the standards for individuals entering the profession.
Planners believe they could be better served by certain
segments of the industry. Member and professional organizations
are viewed as offering good value to planners, receiving
an overall satisfaction rating of 7.4 on a ten-point scale
(with 10 representing high satisfaction). However, self-regulatory
organizations were rated at 6.5; financial services companies,
a 5.8; and provincial/federal regulators only 5.5.
Satisfaction ratings varied somewhat by industry sector.
Those who are self employed, working in the mutual fund,
securities, insurance industries and for financial planning
firms are the most satisfied. Those working in accounting
firms, banks, trusts and credit unions give lower overall
job satisfaction ratings.
The appeal of the industry:
The most frequently sited motivating or driving factors that
lead individuals to financial planning careers are:
1. a desire for job independence and the flexibility
(22%)
2. a desire to assist people and make a positive difference
(20 %)
3. an interest in investing and finance (16%)
4. a desire for a substantial income (12%)
Trends in the Profession:
Offering Financial Planning
as a distinct and separate service is a young profession.
More than 61% of the respondents have less than 10 years
experience offering professional financial planning services.
A larger number of those
just entering the profession (63%) have a university degree
than their senior colleagues (55%),
Most new planners (5 years
or less experience) begin as employees of financial planning
firms, and secondly as employees of banks/trust or mutual
fund companies. Most earn their income through a combination
of commission and some other form of blended payment --
most likely in the form of fees, salaries and/or bonuses.
Most seasoned planners (over
15 years experience) are currently working in Insurance
and financial planning firms and most (60%) earn their pay
exclusively through commissions.
Newer planners serve a smaller
clients-base than their more experienced colleagues. More
than half of those with 5 yrs or less experience serve fewer
than 200 clients. They also have fewer wealthy clients (only
14% reporting average client net-wroth of over $500,000).
Over half earned less than $75,000 last year.
Earnings, average net-worth of clients and
number of clients increase with the number of years of experience. Almost
three quarters of senior planners earned more than 100,000 last year, one-third
serve clients with average net-worth of $500,000 or more, and 65% of them
serve more than 200 clients.
Work-life of a Planner:
The following offers additional insight into the nature of
financial planners' work-lives not currently documented in
the CFP Professional Stats
How hard do planners work?
Planners regularly
work more than 40 hours per week. Those working in the suburbs
and rural areas work somewhat longer hours, as do those
with higher incomes and wealthier clients.
56% of planners take
between 3 to 6 weeks vacation a year; 19% take over 6 weeks
and 25% take less than three weeks.
Advisors at securities
firms, banks/trusts and credit unions work the longest hours
whereas those who are self-employed or in the banking sector
work the least.
Younger planners tend
to work shorter hours than their older counterparts, but
take less vacation time.
Where do planners work?
Most (36%) of the survey respondents have
chosen to work for planning groups more than any other type
of employer. In a distant second place, men prefer to work
for insurance companies, whereas women have chosen banks/trusts.
Most (63%) work in offices with 10 or fewer
co-workers.
Most work in large urban centres, primarily
in Ontario.
What do planners earn?
Over half of planners surveyed earned in excess
of $100,000 last year and 31% earned over $150.000.
Generally, the youngest planners (those under
the age of 35) made the least amount of money, whereas those
65 years of age and older made the most.
The incidence of higher incomes is consistent
across all age categories with the exception of the youngest
and oldest respondents: 30% of planners younger than 35
years of age and 73% of planners 65 and over earned over
$100,000 last year.
Those at insurance, securities and planning
groups reported the highest incomes and those at banks/trusts
and credit unions reported the least.
How are planners paid?
70% of survey respondents are paid by commission,
either exclusively or combined with fees.
86% of all planners are licensed to sell Mutual
funds and 71% sell insurance products. Only 10% offer advice
on a fee-only basis.
More experienced planners are more likely
to be paid by commission only.
Men are more often paid strictly by commission
than women.
Insurance representatives are paid by commission
more often than any other type of advisor while the vast
majority of accountants operate on a fee-only basis.
Financial Planners and their clients:
Over half of respondents serve more than 200 clients. On average,
those with planning firms serve more clients than any other industry type.
(Insert "Number of Clients Per Practice" chart)
Three-quarters of the respondents serve clients with a net worth
of less than $500,000. Most of these fall in the $100,000 to $499,999 range.
At the top end of the scale, those serving the wealthiest clients
(net worth of more than $500,000) tend to be the most experienced (i.e. offering
advice for 15 years or more) and working in the accounting or securities segments
of the industry.
Accountants, those at securities firms and banks/trusts
tend to have wealthier clients.
CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.
are certification marks