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Financial Services in the Digital Information Age: The Evolution from a Product-Centric to a Professional Model

Financial planning must reinvent itself or risk becoming irrelevant

TORONTO, ON, Nov. 28, 2016 – A record 250 guests from all areas of the financial services industry, regulators and government representatives attended Financial Planning Standards Council’s (FPSC) Financial Planning Week Celebration of the Profession Dinner, which took place November 22 in Toronto. Guests heard that, as digital platforms for portfolio selection and rebalancing start to compete for space with human investment advisors, professional skills are becoming ever more critical for the financial planning profession to stay relevant.

“The financial services industry is evolving from a product-centric model to a professional model,” said FPSC President and CEO Cary List, “where the true value of the human advisor lies in the holistic view of the client, an unwavering ethical commitment, and the non-technical professional skills that the planner brings―and where products are used as a means to an end, not the end themselves.”

“As technology inevitably erodes the value of some human technical skills, digitization and the Internet are also leading to the commoditization of information, eroding the value of pure knowledge,” List said. “As a result, professions from medicine to accounting to financial planning need to reinvent themselves or risk becoming irrelevant.”

“The perceived value of general investment advice and portfolio selection may be on the wane, leaving many advisors to search for their true, sustainable value proposition.”

List noted that both industry and consumers are recognizing the significant impact on financial health, and even overall well-being, of getting the right financial planning from the right professional who has the client’s interests at the core.

“Tomorrow’s financial planners and other allied financial professionals are going to have to adapt, to focus more than ever on developing the skills that technology can’t supplant―managing relationships, demonstrating empathy, understanding how and why clients make the decisions they do, and helping drive the right decisions from their clients,” List said, adding that this evolution bodes well for CFP® professionals, whose “value add” has always included taking a holistic view of their clients’ overall situation.

“Tomorrow’s financial professionals must become trusted advisors, coaches, relationship and behavioural managers, all the while learning to apply technology efficiently and knowing what digital solutions may work best to meet their clients’ product needs.”

Maureen Jensen, Chair and CEO of the Ontario Securities Commission, was the keynote speaker at the Celebration of the Profession Dinner. She commended FPSC certificants for their high standards of competence and professionalism, emphasizing that a commitment to professionalism is of importance to the entire industry.

Jensen emphasized that the need for financial planning advice and a good financial plan has never been greater. Investors no longer rely on advisors to solely broker their transactions, but increasingly rely on professional advisors for advice in planning and saving for retirement and other important goals.

Jensen reflected on the importance of financial planning in her own life, recounting that working with a planner had helped her design her life to reach the goals that were most important to her.

As the investment industry continues to evolve, Jensen stressed, advisors have a greater responsibility to understand clients’ needs to assist them in reaching their objectives.

Among other announcements made during the evening, Cary List announced that FPSC, which together with the Institut québécois de planification financière (IQPF) published the first unified Canadian Financial Planning Definitions, Standards & Competencies in 2015, has begun a reassessment of the knowledge, skills and abilities financial planners need to best serve their clients. In 2017, FPSC will release a revised CFP Professional Competency Profile, together with a comprehensive Financial Planning Body of Knowledge, a resource that will shape the future of financial planning education and certification, and that will help level set expectations for educators, employers and consumers alike.

“We want to leave no doubt regarding the knowledge and competencies expected of those that FPSC certifies, ensuring they’re not only relevant for today’s professionals, but that they remain so for tomorrow’s professionals,” List said, noting that FPSC began this evolution more than a decade ago with a move to a competency-based approach to CFP certification.

List also emphasized that the process of ensuring readiness for the digital information age starts with education, and as such, FPSC has begun revamping its curriculum requirements for CFP certification and FPSC Level 1® Certification in Financial Planning to ensure that skills like empathy, trust, and behavioural and relationship management become engrained in the psyche of future financial planning professionals.

“As with most disruption, there’s great opportunity for those who are willing or able to embrace it,” List said. “With the advent of digitization and robo-tools, with better-informed clients, and with the ‘right’ skills, CFP professionals can deliver superior service, with stronger outcomes, in a more cost-effective manner than before. And there’ll be greater opportunity for financial planners to focus on what they’ve been trained to do best: seeing their clients as whole beings to provide unique, unbiased, competent professional advice, while being recognized and well-compensated for the true added value they bring.”

“At FPSC, we’ll continue to work with industry to understand the needs of their businesses, with planners to understand their practices and their clients’ expectations, with consumers’ groups and with regulators,” List concluded, “to shape future CFP professionals and FPSC Level 1 certificants so they continue to play a lead role in ensuring the health and success of the industry―and more importantly, the well-being of the Canadians they serve.

Now in its eighth year, Financial Planning Week was created by FPSC and IQPF as part of an ongoing effort to promote financial well-being for all Canadians. Financial Planning Week wrapped up on November 26.

About Financial Planning Week
Created by Financial Planning Standards Council (FPSC) and the Institut québécois de planification financière (IQPF) in 2009, Financial Planning Week is dedicated to raising awareness of the importance and benefits of financial planning with a CFP professional, encouraging Canadians to take control of their future and achieve their goals through sound financial planning, and ensuring Canadians have financial hiring literacy so that they’re armed with the information they need to find the right financial planning professional.

About Financial Planning Standards Council
As a professional standards-setting and certification body working in the public interest, FPSC’s purpose is to drive value and instill confidence in financial planning. FPSC ensures those it certifies (Certified Financial Planner® professionals and FPSC Level 1® Certificants in Financial Planning) meet appropriate standards of competence and professionalism through rigorous requirements of education, examination, experience and ethics. More information is available at www.fpsc.ca.

For more information or to arrange an interview, please contact:
Caroline Horcher
Financial Planning Standards Council
chorcher@fpsc.ca 416.593.8587, ext. 232 or 1.800.305.9886