The Value of Financial Designations

A Consumer Perspective

Sterling Raskie, Jason Martin, Craig Lemoine, Benjamin F. Cummings

Research output: Working paper

Abstract

Throughout their lifetimes, consumers use financial service professionals (FSPs) to achieve important financial goals and ensure financial wellbeing, often turning to FSPs as their levels of income and investable assets necessitate professional guidance. This study evaluates the impact of consumer perceptions of advisors' financial designations/credentials on rate of compensation to the FSP when controlling for consumer age, income, and investable assets. It further evaluates the impact of consumer perceptions of advisors' financial designations/credentials on consumers' perceived value received when controlling for consumer age, income, and investable assets. Using data from Advisor Impact's 2014 "Economics of Loyalty Research" survey, this study finds that consumers who value designations, as well as those with higher incomes and investable assets, pay advisors more than those who do not. The study also finds that consumers in older age groups tend to pay less to their advisors than the youngest age group, possibly indicating less of a need for financial advice. As a potential explanation for why those who value designations tend to pay more to their FSPs, the results regarding the perception of value received suggest that consumers who value designations also perceive greater value in return for the fees paid to their FSP. For advisors, these results provide support for the acquisition of designations as a means for greater perceived value on behalf of the consumer, and ultimately, higher levels of compensation.
Original languageEnglish (US)
Number of pages35
DOIs
StatePublished - Nov 21 2017

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Financial services
Assets
Income
Advisors
Perceived value
Financial adviser
Age groups
Consumer perceptions
Economic impact
Well-being
Survey research
Loyalty
Fees
Guidance

Keywords

  • Financial Planning
  • Wealth Management

Cite this

The Value of Financial Designations : A Consumer Perspective. / Raskie, Sterling; Martin, Jason; Lemoine, Craig; Cummings, Benjamin F.

2017.

Research output: Working paper

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