If you want to improve your marriage, hire a CFP.
Data from a CFP Board pilot survey gives that impression, although researchers stressed the results are preliminary.
The board discussed the survey results during a webinar Jan. 30 to report on a research project that will assess the effectiveness of holistic planning. The pilot survey questioned 413 respondents last summer and was open to people aged 18 to 99 with incomes of $75,000 or more. It was designed to determine the effectiveness of various questions in preparation for a long-term longitudinal study that will kick off this summer.
Study leaders took pains to downplay the survey results.
“Please keep in mind this is pilot data,” says Sonya Lutter, director of financial health and wellness and director of the master’s program at Texas Tech University. “This is not meant to be final information or necessarily even information to implement and practice. This was really meant to get our measures solid and make sure that they were valid and reliable.”
A Correlation with Relationship Satisfaction
But Lutter expressed delight at the results from the question asking respondents to rate their marriage satisfaction. More than 70% of those served by CFP professionals said they were very satisfied. Also reporting high satisfaction: 60% of those served by a CFP and another financial professional. Only 45% of those served by a non-CFP professional and 40% of those who did not use a financial advisor said they were satisfied with their marriage.
“This one is probably my absolute favorite data slide,” says Lutter, who is also a licensed marriage and family therapist. “Because while I said don’t use the pilot data, maybe you can kind of use this one a little bit, just because it’s so exciting. And it definitely represents other data that I have collected.”
The survey demonstrates that using a financial advisor, especially a CFP professional, is correlated with relationship and marriage satisfaction, Lutter says. “Which is pretty cool that we are seeing some relational benefits of talking about finances with another person.”
What Drives Well-Being
The long-term study will be the first peer-reviewed academic effort to systematically evaluate how different financial planning approaches influence U.S. households, both in financial and non-financial terms, according to a CFP Board news release. It will compare the outcomes of households working with CFP professionals versus those using other financial advisors or managing their finances independently. The hope is that the study will show that CFPs provide better outcomes for clients than other financial professionals.
The marriage question illustrates the purpose of the study: to measure the effectiveness of holistic planning that addresses more than just the numbers on a client’s balance sheet.
Study leader Emily Koochel, manager of financial wellness at eMoney, says, “If we only look at the objective measures of well-being such as income, that may actually plateau at a certain level. And it’s really the perceptual variables that allow us to look and examine what really drives well-being.”
Therefore, the researchers say, the study will assess subjects in three areas: how they act, which includes their decisions under the guidance of a financial planner; how they think, which assesses their psychological and social condition; and how they feel, which the researchers term financial well-being.
Lutter says well-being “really illustrates the potential non-financial benefits of seeing the CFP professional. I think the financial benefits are fairly obvious, but we want to bring in some of those non-financial benefits in this longitudinal study.”
Fine-Tuning the Study
The pilot survey, and a second pilot that will be conducted soon, are designed to fine-tune the study before it is launched next summer, the researchers say.
For example, the researchers have broadened their criteria for the mass-affluent households they plan to study. Minimum income was $125,000 and has been reduced to $100,000; minimum investable assets were $100,000 and now are $50,000; minimum education was some post-secondary study and now is high-school graduation or equivalent.
“We’re interested in altering those specifications as parameters to get to a population that we think is representative of the types of clients that are typically targeted by financial planning professionals, CFP professionals, in order to really have a broad enough scope on our sample,” says study leader Stuart Heckman, associate professor of practice and director of the Ph.D. program at Texas Tech University.
The researchers say they are working to correct sampling biases found in the pilot survey.
For example, 73% of respondents were white, 9% were East Asian, 7% were Hispanic/Latinx, and 5% were African American. “We definitely had some groups that were underrepresented,” Heckman says. “For instance, are African American Black and Hispanic. … Asian households were a little bit overrepresented.” The samples “definitely” overrepresent married households, he adds.
Retirement Planning: A Thorny Topic
The researchers say they have a lot of work to do to fine-tune questions regarding households’ retirement account situation and estate planning.
The survey asked respondents how much they had saved. Answering that they have more than three times their annual salary saved were: 25% of those served by a CFP; over 35% of those served by a CFP and another advisor; and under 25% of those served by a non-CFP advisor.
“We’ve discussed a lot about how we might measure retirement adequacy,” Heckman says of retirement planning. “And as you can imagine, this is a pretty complicated, a fairly nuanced area. … I’m guessing most of the audience knows it’s a pretty involved computation, a lot of assumptions would be needed.” The study will probably ask subjects to provide dollar amounts, he says.
But researchers must take care not to overwhelm study participants, Heckman says.
“One of the real challenges in running a survey like this is that you have to strike a balance between the number of questions that you’re asking and getting information that’s just good enough,” he says.
Advisors Boost Financial Confidence
Another pilot study question asked respondents to rate their confidence in their ability to achieve their financial goals.
Answering “very confident” were over 30% of those served by a CFP; over 50% served by a CFP and another advisor; under 30% served by a non-CFP; and 10% not served by a financial professional.
“We see that the use of a professional advisor seems to boost confidence and people’s ability to achieve their financial goals,” says Heckman. “Nothing too surprising there.”
Pilot survey respondents were also asked how close they were to their “ideal financial life.”
The answers highlighted the reality that people’s financial condition can be good, but they still have a negative assessment, Koochel says.
“What we’re trying to understand is this discrepancy between the real and ideal states as well as their assessment of their past and current and future states, which is really important when we consider financial decisions,” she notes.
In a four-decade career in journalism, Ed Prince has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News Tribune.