80% of Indian consumers are for professional financial planning services

The FPSB Value of Financial Planning Research 2023 surveyed 1,011 advised and unadvised Indians aged 25. While unadvised Indians recognize improved financial well-being and peace of mind (42 per cent) and greater wealth growth (43 per cent) as key benefits of seeking financial planning, 27 per cent Indians perceive it as too expensive and 32 per cent find it hard to consult someone trustworthy

Almost 80 of 100 Indian consumers feel that professional financial planning services have helped enhance the quality of life, while 75 feel financially more confident and secure. Similarly, 91 per cent retirees, advised by a CFP professional, felt that they had enough money to live a happy retired life, says the FPSB ‘Value of Financial Planning Research’ report, based on a survey.

Talking to Bizz Buzz, Krishan Mishra, CEO, FPSB India said, “Our mission at FPSB India is to raise the bar for financial planning standards. With the Value of Financial Planning Consumer report 2023, we unveil an extensive study encompassing both CFP® professional guided and independent Indian consumers.”

It's gratifying to observe that financial planning, particularly when administered by Certified Financial Planner (CFP) professionals, assumes a pivotal role in moulding a dependable financial future. It stands as evidence to the invaluable assistance they provide to those in search of financial guidance, he said.

Earlier, speaking at BSE on the launch of the report, Mishra said, “It's good to note that financial planning, especially when delivered by CFP professionals, plays a pivotal role in shaping a secure financial future. It is a testament to the value they bring to individuals seeking financial guidance.”

While close to 3 in 5 (76 per cent) clients of financial planners are highly satisfied with their overall level of wealth, compared to 63 per cent unadvised consumers, the study has found that around 9 in 10 (94 per cent) clients of CFP professionals feel financially secure and a similar proportion 9 in 10 (95 per cent) feel tangibly better off.

“This report represents a significant contribution to our understanding of the impact and effectiveness of professional financial planning services in the lives of individuals. It sheds light on the value that Certified Financial Planner professionals bring to the table and provides valuable insights for the industry. We appreciate FPSB India's dedication to promoting transparency and excellence in financial services, and we believe that this report will be a valuable resource for both practitioners and consumers in shaping the future of financial planning in India,” said Prof. Manoj K Tiwari, Director, IIM-Mumbai.

The FPSB Value of Financial Planning Research 2023, undertaken for Financial Planning Standards Board Ltd (FPSB) and FPSB India by independent research firm MYMAVINS, surveyed 1,011 advised and unadvised Indians aged 25 and over with an annual earning of over Rs 45 lakh or holding over Rs 45 lakh in investable assets or its equivalent.

While unadvised Indians recognize improved financial well-being and peace of mind (42 per cent) and greater wealth growth (43 per cent) as key benefits of seeking financial planning, 27 per cent Indians perceive it as too expensive and 32 per cent find it hard to consult someone trustworthy.

However, close to 9 in 10 (97 per cent) clients of CFP professionals say the value of financial planning outweighs the cost, with everyone (100 per cent) advised by a CFP professional reporting they trust their financial planner to act in the best interests of the client.

Dante De Gori, CEO, FPSB, says, “In this current volatile climate, where unexpected events can send shockwaves through the global economy, the role of financial planning in general and of CFP professionals in particular has become even more critical in empowering consumers to make informed financial decisions and achieve their long-term goals, while enjoying a better quality of life.”

Financial planning benefits more than just the wealthy. The study finds that 70 per cent percent of advised Indians with an income of Rs 65 lakhs and less report improved family life, improved social life (53 per cent), improved mental health (61 per cent) and increased work satisfaction (62 per cent).

Financial advice unlocks benefits beyond money by improving overall mental health. Over 1 in 2 (60 per cent) of Indians who work with a CFP professional have reported financial advice positively impacted their mental health and family life. In addition, 76 per cent of clients who work with CFP professionals generally feel they can cope well with any health issues compared to 71 per cent of unadvised Indians. The study also reveals that clients of CFP professionals report the highest quality of life score (82/100), compared to those who work with other financial planning professionals (79/100) and the unadvised (76/100).

Clients of CFP professionals show a strong level of trust in their financial planners. The report reveals that Indians found more value working with a CFP professional (with a score of 82 out of 100) than an adviser, who is not a CFP professional (79 out of 100.)

Trust is also significantly high as 100 per cent of clients, who work with CFP professionals, trust their financial planner to act in the client’s best interests and 98 per cent of those who work with a CFP professional are likely to continue the relationship with their financial planner.