Many planners report that the primary reason their clients choose to work with them is a foundation of trust built with that individual client, which subsequently blossoms forth into a bona fide planner-client relationship. Accordingly, many planners have recently begun to ask: why the CFP Board fee increase to support public awareness of the CFP marks, if that’s not how clients select their planners anyway?
Amongst the various messages posted on the Financial Planning magazine discussion forums (you can view the two separate threads here and here) regarding the recent CFP Board announcement that it is considering an 80% fee increase to help fund a public awareness campaign for the CFP marks, a common theme began to emerge. To paraphrase it, the assertion was “I have never had a client state that they chose to work with me because of my CFP certification. They choose to work with me because of my individual trustworthiness, credibility, and ability to deliver the guidance they need. So what’s the point of big fee increase, especially when it’s going to fund something that isn’t relevant in the decision-making process when individuals select a financial planner anyway?”
Certainly, I won’t deny that the ability to communicate effectively with prospective clients and to inculcate a trust relationship is crucial to an individual’s decision-making process about who to work with for financial guidance. But I think to also imply that people don’t find the CFP marks relevant in the decision-making process – especially because they don’t ask questions about the CFP marks or state that they were a factor in initial client meetings – is to ignore the powerful reality that is “branding.”
Branding is an often misunderstood phenomenon; in part, I think that’s because we as financial planners are not trained in marketing, but more significantly I think it’s because, as research on branding itself ironically shows, we are often not even aware of the impact that branding is actually having on our own decision-making process. Nonetheless, the impact is there, and it’s significant. In perhaps one of the most infamous examples (at least in the world of marketing and branding), think back to the popular Coke versus Pepsi taste tests that have occurred over the past few decades. In the initial version, Coke conducted an extensive series of taste tests where consumers were presented with a can of Coke and a can of Pepsi, tasted each one, and reported which one tasted better; the majority of consumers chose Coke. In response, Pepsi initiated the so-called “Pepsi Challenge” where consumers were given two unidentified soft drinks (one Coke, one Pepsi), were instructed to try each and report which one they liked better, and after-the-fact found out which one they had chosen. In the Pepsi Challenge blind-taste-test version, a significant majority now chose Pepsi as the drink of choice. These are some pretty astounding results. When consumers saw which drink they were consuming, they chose Coke. If they didn’t know which was Coke and which was Pepsi, though, they chose Pepsi. And what accounted for the difference? In a word: branding.
In more recent research replicating these results, scientists have actually shown using neurological imaging scans that the brain actually responds differently to a blind-taste-test version of Coke, than a version of Coke where the subject sees and knows that it’s Coke. In essence, the Coke brand – and the way our brain processes it – is so powerful, that we literally, biochemically and physiologically, enjoy Coke more when we can see and associate the Coke brand with the beverage that we are drinking. In other words – at least as far as the research is concerned – Pepsi actually “tastes” better than Coke, but doesn’t taste as good as Coke plus Coke’s brand value (or viewed another way, Coke has a stronger brand than Pepsi and as a result influences people's opinions of which soda tastes better - good thing they have a strong branding campaign!).
So not only does the impact of a solid brand have an incredible impact – it doesn’t just affect our choice, it actually changes the experience itself to be more positive when we can associate a good brand with the product or service we’re consuming!!! – but it is equally important to note that we are generally completely unaware of this phenomenon (and as discussed in a previous post in this blog, we are often remarkably oblivious of the actual factors that influenced and led to a decision that we made). In this context, no one who consumed Coke in the taste test ever stated “I think the Pepsi tastes better, but I prefer Coke because I just think it’s a better brand.” Yet as the research shows, consumers did choose Coke in large part because of its brand, and actually enjoyed the taste of Coke more as a result. But again, they were completely unaware of the impact that branding was having on them. Nonetheless, if consumers drink Coke but don’t know it’s Coke – or worse, see it presented as some never-heard-of “no name” cola drink – they prefer Pepsi instead.
In the context of the CFP marks, this leads us to several important conclusions. The first is that, even if people are being affected by what limited branding exists already with respect to the CFP marks, they are almost certainly unaware that the CFP marks influenced their decision (and to say the least, will not likely say that the CFP marks were a factor in making the choice). Second, to the extent that very limited branding has been done in the past, it may in fact be true that the CFP marks are rarely a factor in the decision-making process; but this is not because branding doesn’t matter, it’s because the branding hasn’t actually been done enough to have a broad reaching impact in the first place! In addition, it is notable that in support of the CFP Board’s own pre-research (see their extensive discussion in this CFP Board Certificant Connection video) in considering the public awareness initiative, they conducted significant focus-group marketing research, and their results indicated that in fact, the value and virtues of the CFP marks are so significant that consumers actually do state that the marks would be a material factor in their decision-making process. However, the focus-group research showed that the marks can only be a factor if/when/once the consumer actually becomes familiar with the ethics, experience, education, and examination requirements that the marks entail. In other words, the research further shows that until there is awareness, the CFP marks are not a factor; but once there is awareness, the CFP marks become an important (albeit still not the only) conscious factor in choosing an advisor, not to mention any subconscious branding impact.
So the bottom line is that the research – both with respect to branding overall, and the value of the marks in particular given their rigor – indicates that public awareness of the requirements for CFP certification and branding of the CFP mark
s really does have value, at least to the extent that the marketing/advertising efforts themselves are delivered properly and effectively. And the fact that the typical planner experience suggests the CFP marks are not a part of the client decision-making process are not necessarily a contradiction of this, since people are generally unaware of the impact that branding has on their own decisions, and in reality there really isn’t very much branding for the CFP marks in the eyes of the public in the first place.
Of course, this doesn’t necessarily address whether the CFP Board has the right price-tag on their public awareness campaign, whether this is the “right” time for a fee increase, whether they can reach a sufficient audience to have impact, or many of the other issues regarding the debate on the proposed fee increase that have been discussed previously in this blog, as well as whether the CFP Board is even the right choice to "champion" the cause. Nonetheless, when it comes to the fundamental question of whether there is value itself in having more public awareness of the CFP marks for advancing the delivery of financial planning by CFP professionals, the answer appears to be “yes,” most definitely.
So what do you think? Does financial planning and the CFP certification need to get onto the public awareness bandwagon and develop its value as a brand? Or are you still unconvinced?