How you manage your money decides how well you can utilise it for your own well-being as well as for your loved ones. If not managed well, money can become a source of stress for many people. It can take a personal toll on people, impacting their quality of sleep and even their mental health. However, not everyone can manage their money and future financial needs on their own. This is where professional financial planners come in to support people in taking control of their financial lives. However, are such planners really effective? A study commissioned by the Financial Planning Standards Board (FPSB) suggests they do.

The recently published study presents a compelling comparison between the personal experiences of individuals who navigate their financial journey alone, those who work with a financial planner, and importantly, those who seek advice from a Certified Financial Planner (CFP), a professional certificate awarded by FPSB upon completion of a rigorous CFP curriculum.

The study examined the value of financial planning, measuring the financial and non-financial impact of financial planning across the quality of life, financial confidence, financial satisfaction and experienced value while debunking the myths surrounding financial planning and analyzing the future of the profession.

Also Read: How is indexation in mutual funds calculated and which schemes are eligible?

The study finds that people who work with a professional financial planner feel better off both financially and more broadly. They report having a better quality of life, enjoying more financial confidence and resilience and feeling more satisfied with their financial situation. That said, the following are some more interesting findings of the study:

  • 80 out of 100 Indian consumers feel professional financial planning services have helped enhance their quality of life, while 75 out of 100 feel financially more confident; 91% of retirees advised by a CFP professional felt they had enough money to last their retirement happily.
  • Close to 3 in 5 (76%) clients of financial planners are highly satisfied with their overall level of wealth, compared to 63% unadvised consumers. Around 9 in 10 (94%) clients of CFP professionals feel financially secure and a similar proportion 9 in 10 (95%) feel tangibly better off.
  • Unadvised Indians recognize improved financial well-being and peace of mind (42%) and greater wealth growth (43%) as key benefits of seeking financial planning
  • However, 27% of Indians perceive it as too expensive and 32% find it hard to consult someone trustworthy.
  • Close to 9 in 10 (97%) clients of CFP professionals say the value of financial planning outweighs the cost. Everyone (100%) advised by a CFP professional reported they trust their financial planner to act in the best interests of the client.

Financial planning benefits more than just the wealthy

The study finds that 70% of advised Indians with an income of Rs 65 lakhs and less report improved family life, improved social life (53%), improved mental health (61%) and increased work satisfaction (62%).

Financial advice unlocks benefits beyond money by improving overall mental health

  • Over 1 in 2 (60%) of Indians who work with a CFP professional have reported financial advice positively impacted their mental health and family life.
  • In addition, 76% of clients who work with CFP professionals generally feel they can cope well with any health issues compared to 71% 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 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% of clients who work with CFP professionals trust their financial planner to act in the client’s best interests and 98% of those who work with a CFP professional are likely to continue the relationship with their financial planner.

Dante De Gori, CFP, Chief Executive Officer, FPSB Ltd. 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.”

“The findings in this global study illuminate a compelling reality: the immense value that CFP professionals bring in supporting clients’ financial needs amid times of uncertainty, reinforcing the reputation of CFP certification as the global symbol of excellence in financial planning,” De Gori added.

(The above content is based on a press release by FPSB India)