The Value of Financial Designations: A Consumer Perspective

35 Pages Posted: 21 Nov 2017 Last revised: 19 Apr 2018

See all articles by Sterling Raskie

Sterling Raskie

University of Illinois at Urbana-Champaign - Department of Finance

Jason Martin

The American College of Financial Services

Craig Lemoine

University of Illinois at Urbana-Champaign - Department of Finance

Benjamin F. Cummings

The American College of Financial Services

Date Written: April 26, 2017

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.

Keywords: Financial Planning, Wealth Management

Suggested Citation

Raskie, Sterling and Martin, Jason and Lemoine, Craig and Cummings, Benjamin F., The Value of Financial Designations: A Consumer Perspective (April 26, 2017). Available at SSRN: https://ssrn.com/abstract=3073707 or http://dx.doi.org/10.2139/ssrn.3073707

Sterling Raskie (Contact Author)

University of Illinois at Urbana-Champaign - Department of Finance ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Jason Martin

The American College of Financial Services ( email )

270 S. Bryn Mawr Avenue
Bryn Mawr, PA 19010
United States

Craig Lemoine

University of Illinois at Urbana-Champaign - Department of Finance ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Benjamin F. Cummings

The American College of Financial Services ( email )

270 S. Bryn Mawr Avenue
Bryn Mawr, PA 19010
United States

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