The Latest Financial Planning Industry Statistics Explained
As of 2021, the U.S. financial planning market reached a value of over $58 billion, and it is expected to grow at a CAGR of 2.8% through 2026.
The statistic provided indicates that as of 2021, the U.S. financial planning market was valued at over $58 billion. This figure represents the total market size for financial planning services in the United States at that time. Additionally, it is predicted that the market will experience a compound annual growth rate (CAGR) of 2.8% from 2021 to 2026. This suggests that the market is expected to continue expanding steadily over the next five years. The projected growth rate indicates that there is increasing demand for financial planning services among individuals and businesses in the U.S., potentially driven by factors such as economic conditions, regulatory changes, and evolving consumer preferences.
Approximately 31% of financial planning firms in the U.S. are reportedly client-centric, focusing on providing comprehensive financial planning.
The statistic indicates that about 31% of financial planning firms in the United States are considered client-centric, meaning they prioritize delivering comprehensive financial planning services tailored specifically to individual clients’ needs and goals. This suggests that a significant portion of financial planning firms place a strong emphasis on understanding and catering to the unique circumstances and preferences of their clients, rather than adhering to a standardized or one-size-fits-all approach. By being client-centric, these firms aim to provide more personalized and effective financial planning solutions, potentially leading to higher levels of client satisfaction and better outcomes in terms of meeting financial objectives.
The industry market size of the financial planning & advice in the United States has grown by 3.8% per year on average between 2016 and 2021.
The statistic indicates that the industry market size of financial planning and advice services in the United States experienced an average annual growth rate of 3.8% between the years 2016 and 2021. This growth suggests a positive trend in the demand for financial planning services among individuals and businesses in the U.S. over the specified period. The increase in market size can be attributed to various factors such as a growing awareness of the importance of financial planning, changing economic conditions, evolving regulatory landscapes, and the increasing complexity of financial markets. This data signifies a steady expansion of the financial planning industry in the U.S., highlighting potential opportunities for firms operating in this sector to further develop and expand their services to meet the needs of the market.
In 2021, approximately 27% of U.S. adults do not have retirement savings or a pension.
The statistic that approximately 27% of U.S. adults do not have retirement savings or a pension in 2021 highlights the significant financial vulnerability faced by a substantial portion of the adult population in the United States. For these individuals, the absence of retirement savings or a pension could result in financial hardship and insecurity in their later years. This statistic underscores the importance of promoting financial literacy, retirement planning, and access to retirement savings options to help individuals build a secure financial future. Addressing this issue will be crucial in ensuring the well-being and financial stability of a significant segment of the U.S. population as they approach retirement age.
About 46% of Americans are worried about running out of money during retirement.
The statistic states that approximately 46% of Americans express concerns about running out of money during their retirement years. This implies that a significant portion of the population is uncertain about their financial security in later stages of life. The statistic highlights the widespread anxiety and lack of confidence in financial preparedness among individuals as they plan for retirement. These worries may stem from uncertainties about savings, investments, rising living costs, and the ability to maintain their desired standard of living post-retirement. Addressing these concerns is crucial to ensuring financial stability and peace of mind for individuals as they approach retirement age.
As per FPA, 80% of financial advisors think clients expect tax advice from them.
The statistic indicates that 80% of financial advisors, according to the Financial Planning Association (FPA), believe that clients expect them to provide tax advice. This suggests that a significant majority of financial advisors feel a certain level of responsibility or pressure to offer tax-related guidance to their clients as part of their overall service. This statistic highlights the importance of tax knowledge and expertise within the financial advisory profession, as well as the potential expectations that clients may have regarding the scope of services provided by their financial advisor.
Women remain underrepresented in the financial planning industry, with only about 23% of Certified Financial Planners (CFPs) in the US being women.
The statistic that only about 23% of Certified Financial Planners (CFPs) in the US are women highlights a clear gender disparity within the financial planning industry. Despite advancements in gender equality in various professions, women continue to be underrepresented in this particular field. This lack of gender diversity could result in inadequate representation of women’s financial needs and preferences in financial planning services, ultimately hindering the industry’s ability to effectively cater to a diverse client base. Efforts to promote and support women in pursuing careers in financial planning, as well as initiatives to address systemic barriers and biases within the industry, are crucial in closing this gender gap and creating a more inclusive and representative financial planning sector.
Firms engaged in financial planning are expected to increase their use of technology by 57% to improve client engagement.
The statistic indicates that there is an expected 57% increase in the use of technology by firms engaged in financial planning with the objective of enhancing client engagement. This suggests that financial planning firms recognize the growing importance of technology in effectively connecting and interacting with their clients. By leveraging technology tools and platforms, these firms aim to offer more personalized and efficient services, strengthen client relationships, and potentially attract new clients. The anticipated increase highlights a strategic shift towards technological innovation within the financial planning sector as a means to adapt to changing client preferences and market dynamics.
The financial advice industry’s revenue growth rate is projected to decrease to around 1.8% in 2022 due to the economic impact of the COVID-19 pandemic.
The statistic indicates that the financial advice industry is anticipated to experience a decline in its revenue growth rate in 2022, with the projection estimating it to be around 1.8%. This decrease is attributed to the economic repercussions of the COVID-19 pandemic, which have likely had an adverse effect on investments, market volatility, and overall financial confidence. The pandemic has disrupted businesses and financial markets globally, leading to heightened uncertainty and caution among investors seeking financial advice services. As a result, the industry is expected to face challenges in generating higher revenue growth compared to previous years, reflecting the ongoing impact of the pandemic on economic activities and consumer behavior.
Approximately 30% of financial planners expect to retire in the next ten years.
The statistic indicates that among financial planners surveyed, around 30% are planning to retire within the next decade. This information is valuable for understanding the potential turnover within the financial planning industry and can help stakeholders anticipate changes in the workforce. It suggests that a significant portion of experienced professionals may be exiting the field in the near future, potentially impacting the availability of services and expertise in financial planning. This statistic could prompt employers to consider succession planning strategies and training opportunities to ensure a smooth transition as these individuals retire.
Over 22 million households in America depend on financial advisors for financial planning and investment advice.
The statistic that over 22 million households in America depend on financial advisors for financial planning and investment advice highlights the significant role that financial advisors play in helping individuals manage their finances. With complexities in financial markets and various investment options, many households rely on the expertise and guidance of financial advisors to make informed decisions about their financial futures. Seeking assistance from a professional financial advisor can provide individuals with unbiased advice, personalized financial plans, and strategies to help achieve their long-term financial goals, ensuring a sense of financial security and stability for millions of households across the country.
It is projected that by 2025 Generation X and Millennials will hold collectively 81% of US wealth, requiring tailored financial planning services.
The statistic suggests that by the year 2025, individuals from Generation X and Millennials are estimated to collectively possess 81% of the total wealth in the United States. This projection highlights a significant shift in wealth distribution towards younger generations and underscores the need for tailored financial planning services to cater to the unique needs and preferences of these demographic groups. As this wealth transfer occurs, financial institutions and advisors will need to adapt their services and strategies to effectively engage with Generation X and Millennials, offering customized solutions that align with their financial goals and objectives. By understanding the evolving dynamics of wealth ownership and focusing on targeted financial planning, professionals can better support these generations in managing and growing their wealth for the future.
98% of consumers feel that personalised services are very important in the financial planning industry.
The statistic ‘98% of consumers feel that personalized services are very important in the financial planning industry’ indicates that the vast majority of consumers place a high value on receiving tailored financial advice and services. This suggests that consumers expect financial planners to understand their individual needs, preferences, and financial goals in order to provide effective and relevant guidance. Personalization in financial planning can help build trust, improve customer satisfaction, and ultimately lead to better outcomes for clients. This statistic highlights the importance for financial planning firms to prioritize personalized services to meet the evolving needs and expectations of consumers in the industry.
In 2020, it was noted that only 17% of advisors felt very confident in their technology proficiency, despite increasing digitization in the financial planning industry.
The statistic reveals that in 2020, a relatively low proportion of advisors, only 17%, expressed feeling very confident in their technology proficiency within the financial planning industry. This lack of confidence is particularly notable against the backdrop of increasing digitization trends within the industry. The discrepancy could stem from various factors such as the rapid pace of technological advancements, the complexity of available tools, or the lack of adequate training opportunities. This suggests a potential need for further investment in technology training and education for advisors to ensure they can effectively leverage digital tools and stay competitive in an increasingly tech-driven financial planning landscape.
References
0. – https://www.www.ey.com
1. – https://www.www.ibisworld.com
2. – https://www.www.cfp.net
3. – https://www.www.transamericacenter.org
4. – https://www.www2.deloitte.com
5. – https://www.www.federalreserve.gov
6. – https://www.www.thinkadvisor.com
7. – https://www.www.kitces.com
8. – https://www.blogs.cfainstitute.org
9. – https://www.www.financial-planning.com
