The advisors who participated in our first annual Planners’ Report Card are as diverse as the firms they work for — everything from old-timers to rookies, big producers to small fry. But look at them as a group and you get a fairly good picture of the average planner. Chances are they are young, inexperienced and pushing funds.
The planning profession has proliferated in the last 10 years and that is reflected in our survey, where the average planner has been in the business for just over eight years and with his or her current firm for just over five. Compared to the brokers surveyed for May’s Brokerage Report Card — an average 6.4 years of service with their current firms and 12.2 years in the business — the planners are an inexperienced lot. Less than 20% of the planners we spoke with have been in the business more than 12 years, missing the October 1987 crash.
Given the planners’ relative inexperience, education is a big issue. Of the planners we surveyed, 32% report having their Chartered Financial Planner designation and another 36.2% say they are working on it. The best ranking firm is Investors Group Inc. where more than 50% of respondents say they have a CFP. The lowest is Primerica Financial Services Ltd., where none of its reps claim a CFP. Of those reps with CFPs, 23% also have their registered financial planner designation or 7.5% overall. Less than 1% of our respondents claim a chartered life underwriter designation while a similar number say they are working on the CLU.
Not surprisingly, the average planner also reports a smaller book than the average broker. On average, planners have $17.9 million in assets under management for 240 clients — or an average $70,000 per client. The brokers record average assets under administration of $45.3 million, with 315 clients or $140,000 per client.
The fact that financial planners tend to handle the lower-ticket clients is reflected in their licensing statistics. All of the planners we spoke with sell mutual funds, 84.6% say they are also selling insurance, and another 28% include securities in their product mix.
With all those funds being sold, the average planner is likely getting some head office guidance in product selections, yet doesn’t appear to be under any additional pressure. Not including the reps from Investors and PFSL, about 32% of those surveyed say they sell in-house funds. A further 35% of reps say they sell third-party funds based on recommended lists. Yet the reps don’t seem to feel under the gun — just over 4% say they are feeling more pressure from their companies in the last year, and only 11% say their organizations are trying to take more control of their books in the last year.