Is there an economic case for firms to invest more in certifications, like the certified financial planner designation?
A new report, "Building a Wealth Management Practice: Measuring CFP Professionals' Contribution," compares CFP professionals and practices to financial advisors who do not have CFP certification and finds that CFP professionals fare better in a number of ways.
There are more than 74,000 CFP professionals today, according to Joseph V. Maugeri, managing director of corporate relations for the Certified Financial Planner Board of Standards.
The study, commissioned by the CFP Board and conducted by Aite Group, attempts to identify the contribution of CFP professionals to a practice's revenue.
Looking at solo practices, the study finds that CFP professional practices generate 40% more revenue based on average practice revenue and almost 70% more revenue per client.
The median revenue of a solo practice led by an advisor who is not a CFP professional is $250,000, while the median revenue of solo CFP professional practices is $350,000, according to the study.
"I think that makes a strong case for firms that the CFP is a great investment and will allow their advisors to be more successful," Maugeri told ThinkAdvisor via phone.
The study also finds that CFP professional practices are more successful at attracting high-net-worth and ultra-high net worth clients. The share of HNW and UHNW clients at CFP professional practices is 53% higher than at other practices, according to the study.
"That's significant," Maugeri said. "It shows that for more complex situations, CFP professionals are well equipped to handle HNW and UHNW because of their training and professional development. And it's recognized by the industry and the public."
