The New Importance of Financial Planning, Part 1: Who Has a Financial Plan?—Complimentary (March 2016)


Financial institutions have encouraged advisors to shift from a commission-for-transaction model to a model grounded in fees for asset management. Despite steady progress, advisory business still accounts for less than one quarter of industry revenue, and within most firms a small percentage of advisors are driving the majority of the business. And external forces such as the advent of “robo” advisors, and regulatory pressure will compress advisory fees. To overcome this challenge, firms will have to look to financial planning as a way to differentiate their advice. Banks and credit unions need a wakeup call to understand the urgency of the situation, and the broad advantages that financial planning offers.

Cetera Financial Institutions commissioned Kehrer Bielan Research & Consulting to leverage consumer financial data from the MacroMonitor together with Kehrer Bielan’s proprietary database of performance benchmarking data to demonstrate the New Importance of Financial Planning. In Part One we describe the characteristics of the 15,000 US households that have a written financial plan obtained from a financial professional and compare them to the general population. Herein we explore their demographics, assets, institution and product usage, and their attitudes towards investing. Click here to receive your complimentary copy from Cetera.


The New Importance of Financial Planning, Part 2: Impact on Client Loyalty and Share of Wallet—Complimentary (March 2016)


Households that are attracted to financial planning tend to be wealthier, and be more open to arrange of investments instead of keeping their assets in savings accounts. But only 1 out of every 10 financial plans being used by US households today were prepared by a financial advisor working in a bank or credit union. If households reward the individual or institution that prepared their financial plan with increased loyalty and allocation of financial assets, banks and credit unions are missing a huge opportunity.

Cetera Financial Institutions commissioned Kehrer Bielan Research & Consulting to leverage consumer financial data from the MacroMonitor together with Kehrer Bielan’s proprietary database of performance benchmarking data to demonstrate the New Importance of Financial Planning. In Part One, we described households that have a written financial plan in terms of their demographics, assets, channel and product usage, and their attitudes towards investing. In Part Two we drill down further, controlling for where the household obtained the financial plan. By isolating those households that obtained their plan from a bank or credit union and examining their financial behavior, we demonstrate the broad advantages that financial planning offers those institutions. Click here to receive your complimentary copy from Cetera.


The New Importance of Financial Planning, Part 3: Impact on the Firm—Complimentary (May 2016)


Financial planning has the potential to dramatically reshape the way that financial services are delivered in banks and credit unions. But financial services firms will need to change the way they manage their Financial Advisors, and manage the expectations of their parent institution, in order to reap the full benefits.

This study analyzes the impact of the extent to which banks and credit unions have adopted financial planning, on Financial Advisor productivity in terms of both revenue and acquisition of new assets, and the firm’s penetration of its opportunity. We also explore whether, as Advisors incorporate financial planning into their practices, firms will need to adjust their target Advisor headcount. Finally, we identify those strategies that firms committed to a financial planning focus will need to embrace in order to be successful. Click here to receive your complimentary copy from Cetera.