Financial Advisers Give Themselves A B-Minus In Short And Long-Term Business Planning

Financial Advisers Give Themselves A B-Minus In Short And Long-Term Business Planning

Financial Advisers Give Themselves A B-Minus In Short And Long-Term Business Planning

New study by the FPA Research and Practice Institute™ leads to development of the “FPA 3C Index,” which looks at adviser business confidence, control and clarity.

DENVER – How do financial advisers today view their businesses, future and challenges? What is the scope and scale of advisory businesses today? What are the key issues that advisers are addressing, and how can they take action? These and other issues are the focus of 2016 Trends in Practice Management: Understanding and Driving Client Value, the latest research from the FPA Research and Practice Institute™ – a research entity of the Financial Planning Association® (FPA®).

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Among the issues the research uncovered were the aspects of practice management that advisers consider most important and their self-perceived performance gaps on those issue. In addition, the research sought to understand how financial advisers perceive their future. To that end, the research resulted in the creation of the “FPA 3C Index” – a simple index that examines three critical aspects of the future: confidence, control and clarity.

The “FPA 3C Index” comprises six questions tied to the issues of confidence, control and clarity. FPA hypothesizes that there is a connection between higher index ratings and how financial advisers are growing their businesses. The Index is expressed on a scale from 1 to 100 based on an equally weighted average score across the six questions. The questions were designed to reflect how advisers feel about their future and the extent to which that future can be influenced.

The “FPA 3C Index” comprises responses on the following questions:

Statement Percentage of advisers rating a 5 out of 5
I am confident that I will reach my short-term business goals 39%
I am confident that I will reach my long-term business goals 34%
I feel in control of my business 37%
I feel in control of my life 42%
I am clear on my short-term business goals 52%
I am clear on my long-term business goals 40%

FPA 3C Index = 82.9

The intent is for the FPA Research and Practice Institute™ to track this data over time in future research projects to assess how it relates to growth.

“The overall rating appears high, which is obviously positive for those in the profession; however, we can also see through the ‘FPA 3C Index’ that our biggest challenge is our confidence in the future,” said 2016 FPA President Pamela Sandy, CFP®. “Our hope is that the research we are doing through FPA Research and Practice Institute™, and the action-oriented content that will stem from our research, will result in these scores improving among advisers over time.”

Financial advisers – Self-identified gap in performance

Another key aspect of the research was to identify crucial practice management areas that financial advisers deem important, but also reveal that there are gaps in performing in those areas. Interestingly, the three areas that advisers view as most critical are connected to defining and communicating their value to clients. But these also happen to be the areas where there is the widest self-identified gap in performance:

Attribute Percentage of advisers rating a 5 out of 5 on importance (critical) Percentage of advisers rating themselves a 5 out of 5 on performance (no improvement needed)
Being able to effectively communicate my/our value to prospects 73% 8%
Being clear on the value I/we provide clients 71% 15%
Ensuring clients perceive high value relative to the fees they pay 66% 8%

“Investor data suggests that while clients are satisfied with their relationships, they tend to rate the value they received much lower, whether that is an issue in fact or of perception,” said Julie Littlechild, Founder of “Advisers clearly understand that this is a critical issue and while many feel they are doing reasonably well in these areas, very few feel they have nailed it. The data suggests that perceived value may still be a strong point of differentiation for advisers who get it right.”

When looking at the issues of importance to advisers moving forward in 2016, the areas that advisers believe they have a clear plan in place include engaging with couples effectively (57%), cybersecurity and data protection (53%), engaging female clients effectively (41%), and using technology effectively (38%). However, the research also shows that there are several key areas where advisers don’t have a plan in place including attracting younger clients (21%) and responding to the proliferation of robo-advisers (10%).

Over the next few months, FPA will develop a series of action-oriented whitepapers to help advisers apply the knowledge gained from the research in their businesses. They will pick up on the overall theme of the “creation and communication of value,” a critical issue for advisers based on the research findings. These whitepapers will answer three key questions and provide an action plan to address them effectively:

  • Whitepaper #1: How do you define and communicate value in a way that sets you apart? (February 2016)
  • Whitepaper #2: What internal processes and structures need to be in place to support you in delivering value consistently and profitably? (March 2016)
  • Whitepaper #3: How and when are advisers monetizing the value they have created? (April 2016)

The whitepapers will be provided to FPA members and survey respondents as exclusive content.

“FPA believes it is important that the organization do its part to help members achieve a higher level of business success. The research we are conducting, coupled with these whitepapers and other resources we provide through our Professional Development Center, are central to achieving this goal,” added Sandy.

2016 Trends in Practice Management: Understanding and Driving Client Value incorporates feedback from 706 respondents from across the country and across channels, including both FPA members and nonmembers. Participants responded to an online survey conducted in November 2015, taking approximately 25 minutes to complete. The study’s overall margin of error is +/- 3.68%.

The quantitative research report is now available at


About the Financial Planning Association

The Financial Planning Association® (FPA®) is the principal professional organization for CERTIFIED FINANCIAL PLANNERTM (CFP®) professionals, educators, financial services professionals and students who seek advancement in a growing, dynamic profession. Through a collaborative effort to provide more than 24,000 members with One ConnectionTM to tools and resources for professional education, business success, advocacy and community, FPA is the indispensable force in the advancement of today’s CFP® professional. Learn more about FPA at and follow on Twitter at

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