FPA Unveils "Know Your Client" Benchmark Research in Collaboration with Capital Preferences and T. Rowe Price

Financial planners who deeply understand clients see greater satisfaction, better client relationship quality and higher net client growth

News provided by

Financial Planning Association

Oct 03, 2018, 15:50 ET

CHICAGO, Oct. 3, 2018 /PRNewswire/ -- The level of knowledge financial planners have about their clients directly correlates to their potential for success, according to a new "know your client" benchmark survey. The Financial Planning Association® (FPA®), the country's largest membership association for CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals and those who support the financial planning process, unveiled the results of the study today at its 2018 FPA Annual Conference in Chicago.

The study, developed in partnership with Capital Preferences and T. Rowe Price, sought to identify the behaviors and techniques financial planning professionals can and should leverage to know their clients, and provide a roadmap for planners to evolve their client understanding approach. These "know your client" behaviors range from how financial planners understand client goals and how they manage family dynamics to how they apply insights from understanding clients to deliver a better client experience.

Key findings include:

Greater satisfaction. Financial planners who engage in leading "know your client" behaviors gain deep personal fulfillment from 60 percent more of their client relationships.
Higher referrals and growth. Financial planners who engage in leading "know your client" behaviors see 56 percent higher client willingness to recommend and 72 percent higher net client growth rate.
Delivering value by pinpointing "say-do" misalignments. Planners who actively identify misalignment between what clients say and what their behaviors show – and constructively resolve those gaps with their clients – report higher success. The survey found that planners who pinpointed this disconnect had almost triple the client growth rate compared to those who did not (30 percent vs. 11 percent), double the referral rate (18 percent vs. 9 percent) and more fulfilling relationships (75 percent vs. 60 percent).
Family matters. Highly proficient "know your client" planners spend more time directly engaging their primary clients' partners and adult children. They are 40 percent more likely to discuss aging-related lifestyle transitions and cognitive decline with their clients and their families.
Picking a focus. Financial planners who define a specific client audience tend to be more proficient in "know your client" behaviors and see stronger outcomes. This suggests that planners who focus and go deeper with a single client type can use that client understanding to more efficiently attract similar clients.

"This study clearly re-defines what it means to 'know your client' and how understanding their behaviors is highly correlated with solidifying strong, lasting client relationships built on a foundation of understanding and trust," said 2018 FPA President Frank Paré, CFP^®. "In addition to benchmarking, this study provides valuable data and intelligence that helps financial planners thrive in today's era of more empowered and savvy clients. This is a step forward for the financial planning community and will enrich efforts to educate those planners who are committed to providing the best possible service to clients."

"Having benchmarked planners on over 80 'know your client' behaviors, methods and competencies, we now know quantitatively what best practice looks like," commented Patrick Spenner, study co-author and CMO of Capital Preferences. "We can see in the data that 'know your client' isn't a discipline that's sitting still—new technology and tools are clearly creating more surface area for advisors to create value with their clients."

"The results of the 'Know Your Client' study support our view that advisors who focus on deepening relationships with multiple family members can increase client loyalty," said Jean Dunn, vice president, Client Loyalty Insights, T. Rowe Price. "We look forward to continuing to collaborate with FPA and Capital Preferences to bring actionable insights to market that will help advisors build their businesses and ultimately better serve their clients."

Methodology and Ongoing Survey Participation

The survey findings are based on 311 global responses from client-facing financial advisers and planners. The geographic breakout of completed surveys included 126 responses from the United States, 134 from Australia and 51 from New Zealand. The benchmarking survey is re-opened through November 15 for any financial planners interested in contributing their insight. Participants will receive a customized report that enables them to benchmark their "know your client" methods against those of their peers, as well as the greater advisory community. All client-facing advisors and planners are invited to take the survey: click here to take the survey. For more information about the survey results, please click here.

About the Financial Planning Association
The Financial Planning Association® (FPA®) is the principal professional organization for CERTIFIED FINANCIAL PLANNER^TM (CFP®) professionals, educators, financial services professionals and students who are committed to elevating the profession that transforms lives through the power of financial planning. Through a collaborative effort to provide members with tools and resources for professional education, business support, advocacy and community, FPA is the indispensable resource in the advancement of today's CFP® professional. Learn more about FPA at www.OneFPA.org and follow on Twitter at twitter.com/fpassociation.

About Capital Preferences
Capital Preferences offers financial service firms the most advanced technology for understanding customers, leveraging decision science and behavioural economics. Its gamified profiling platform allows financial professionals to improve client experience, while gaining unique insights into product suitability and client behavior.

Capital Preferences is the creator of TrueProfile, the only tool for financial advisors that reveals their clients' true risk tolerance, loss aversion and decision consistency as defined by economic science. For more information about Capital Preferences and True Profile, visit www.trueprofile.com and follow on Twitter at twitter.com/TrueProfileSays.

About T. Rowe Price
Founded in 1937, Baltimore-based T. Rowe Price Group, Inc. is a global investment management organization with $1.09 trillion in assets under management as of Aug. 31, 2018. The organization provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. The company also offers sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research. For more information, visit troweprice.com, Twitter, YouTube, LinkedIn, Instagram, or Facebook.