Much has been written about the role of financial planning in the modern investment services firm, including in our three-part series on the subject: The New Importance of Financial Planning. So how has the industry responded? Are advisors preparing more plans than they did previously?

This simple question is difficult to answer, because despite the growing importance of financial planning, a majority of firms are unable to report the number of plans their advisors prepared for clients the previous year, or are unable to report an accurate number.

Kehrer Bielan’s surveys of bank broker dealers and banks and credit unions that partner with 3rd party BDs included 153 financial institutions this year, so we are able drill down to those firms that can reliably track financial planning activity. The typical advisor working in those banks and credit unions prepared 22.8 new financial plans for clients in 2016, or 1.9 plans per month.

 

 

Kehrer Bielan’s surveys distinguish between the number of new financial plans prepared for clients, and the number of plans that were updated.

The last time we studied this topic, the mean number of plans per month per advisor was 1.4, and the median was 0.9, suggesting that financial planning activity has increased substantially in banks and credit unions.

And the increase in planning activity could not have come at a better time. Kehrer Bielan’s groundbreaking research on financial planning has demonstrated that higher levels of financial planning activity correlate with higher average revenue per advisor, and more revenue being derived from advisory fees and life insurance sales. Greater emphasis on financial planning can help offset the impact of compressed fees and commissions on total revenue production.

To learn more about our research on financial planning, check out the New Importance of Financial Planning whitepaper series, sponsored by Cetera.