Financial advisors: critical partners in education and planning

“This is the new normal.” “This,” of course, refers to the new way of life for all Americans during the COVID-19 pandemic. Since the springtime surge in coronavirus cases, the U.S. economy has been battered with millions of people still unemployed. Education, travel and many other industries have been affected by this crisis. Sadly, it has touched nearly every aspect of our lives.

Before we can turn the corner on the pandemic, there are many obstacles to overcome. But there are financial steps we can take now to rebuild our lives and prepare for a more secure future.

The pandemic has underscored the challenges many Americans face in understanding and managing their finances – and the tremendous value of working with a professional financial advisor. In this sense, it has been an important wake-up call.

The pandemic’s economic impact has been exacerbated by a lack of financial knowledge around the globe. According to the most recent Standard & Poor’s Global Financial Literacy Survey, just 33% of adults worldwide are financially literate, with women and young people particularly lacking an understanding of basic financial concepts.

When comparing the financial literacy between countries, Americans fall woefully short. Although the U.S. is the world’s largest economy, the survey ranks it number 14 (tied with Switzerland) when measuring the proportion of adults in the country who are financially literate.

For most of us, the hardest part of financial planning is getting started. Where do you begin?

Financial literacy is a process. While it takes time for people to research and learn this process, it is an investment that pays future dividends. A competent, ethical financial planner can be a valuable partner in this effort. Many advisors and their firms provide educational resources to their clients, ranging from quick financial tips and articles about key financial tools to interactive online courses and in-person coaching. Many are also active in helping to educate their communities, providing financial literacy workshops or participating in local meetings and events to share financial resources.

In fact, the COVID-19 pandemic is driving higher demand for personal financial advice. This spring, roughly 80% of CFP professionals reported receiving more inquiries from their existing clients, and about one third received more contacts from prospective clients. Nearly two-thirds of these CFP professionals said they believe more Americans will seek professional financial advice in the pandemic’s wake.

CFP professionals provide financial advice to people of all ages and backgrounds. No matter where consumers are in life, a CFP professional knows how to deliver the high standard of financial planning service to make sure they stay on the right track. From planning for retirement to saving for college, financial professionals are trained to develop a comprehensive strategy to reach short- and long-term financial goals.

As part of their certification, CFP professionals commit to CFP Board’s Code of Ethics and Standards of Conduct to act in the best interest of their client, at all times, when providing financial advice.

This is a key distinction between CFP professionals and other advisors, many of whom are held to a lower standard. The public also understands that CFP professionals must meet rigorous education and experience requirements that prepare them to provide holistic financial planning that takes all aspects of a client’s personal and financial situation into account.

For those who need financial planning assistance, finding an advisor they can trust is crucial. CFP certification continues to be a distinguishing credential for the advisors who obtain it because consumers increasingly appreciate what it signifies: a leader in the profession who is committed to meeting exacting standards and helping people reach their goals. In addition, CFP certification sets advisors apart, identifying them as professionals who provide competent, ethical financial planning advice and are dedicated to strengthening their clients’ financial understanding.

An excellent resource of financial planners in your area can be found at LetsMakeAPlan.org. Just enter your ZIP code, and the search for a CFP professional near you.

For those who work directly with employees or within human resources departments, I hope you will encourage staff to consider the benefits of working with a financial advisor and the importance of becoming educated about their personal finances. Share the consumer-facing website, LetsMakeAPlan.org, which provides a variety of financial tips and information for all phases of life.

Everyone dreams about a secure future, but those dreams have been challenged for many by this unprecedented period of economic and financial uncertainty.

We must help the public understand that the more they know about their personal finances and the sooner they begin the financial planning process, the better equipped they will be to determine their financial future and reach their financial goals.

Kevin R. Keller, CAE, is Chief Executive Officer of the Certified Financial Planner Board of Standards.