A financial planner is supposed to help clients achieve their life goals by planning for their investments, taxes, insurance, retirement, and estate and most importantly, expenses.
What do they do?
Arti Sahgal could have got a good job with her economics honours degree, but she chose to study further and become a certified financial planner, or CFP. The “whole subject of financial planning interested” her as did the idea of being qualified to help people achieve their life goals — be it building a home, or saving for children’s education or ensuring a decent post-retirement life.
It’s not just high net worth individuals she provides her advice to. Like a doctor, CFP can also give advice to family and friends. And “you can add to your wealth, too”, says Sahgal, who is a senior manager for financial planning and investment advisory at Bajaj Capital Ltd, Delhi.
The growing abundance of wealth in India is widening the scope for professionals like Saigal.
Lovaii Navlakhi, managing director and chief financial planner, International Money Matters Pvt Ltd, Bangalore, has made it his “mission” to educate clients about financial planning as part of his business ethic. That maybe because when he made a financial plan for himself at the age of 38, Navlakhi says he realised that he was doing it ten years too late.
Unlike Sahgal, Navlakhi’s tryst with financial planning started much later in his professional life. Once he got onto it, he decided to get “his” approach certified by the Financial Planning Standards Board, India (FPSBI). Navlakhi recounts, “After 18 years of work experience, I ventured out on my own in 2001.
I found it odd that no one seemed to be focussed on the customer while offering financial products. So, I tried to understand why my client wanted to invest.
Without realising it, I was following the financial planning approach. Hence, when I attended the introductory session on the CFP course, I felt that this qualification would give legitimacy to my approach. I was quite thrilled to be at the first convocation of CFPs in India.”
More CFPs are needed in financial services companies, banks, distribution houses, insurance companies, equity broking and financial planning firms in a growing, liberalised economy, say industry professionals. Navlakhi elaborates on the changed economic environment: “Till about ten years ago, earning levels in India were lower. The market and the economy were inward-looking and insulated from developments across the globe. The government guaranteed returns on long-term products, apart from providing tax incentives. There wasn’t much reason for individuals to be concerned about investment alternatives. All this has changed. This results in a big requirement for financial planning.”
Other than the organisations mentioned above, “there will be scope for CFPs to work for para-planners (those who make financial plans for CFPs who deal with customers directly). The other area of boom will be in the financial literacy space: providing and delivering content, etc.”
Independent practice presents a huge promise. “However, this profession requires staying power: it is a long-term game,” says Navlakhi. “Relationships take long to develop, cement and grow. One of the questions that clients like to ask is how many downturns have you seen? Grey hair is an advantage! So, one should use the first five to seven years as the laying of a very strong foundation, and learning the ropes in a financial planning practice. The end result: financial growth, for sure; but more important, immense satisfaction at seeing your clients achieve their financial goals one by one.”
To make a mark in this field, you need a strong grip on your subject. “Knowledge is the key,” says Sahgal. “That’s why CFPs have to keep upgrading themselves in terms of awareness about what is happening at the macro as much at the micro level, i.e. clientwise changes.” Also, if you fail to complete the continuing education programmes organised by the FPSBI, you stand to lose your CFP tag.
“With advice gaining prominence in Indian markets and regulators tightening the grip, the scope for CFPs is immense. It is how you capitalise on the opportunity and make the best of it,” says Sahgal.
. Hunger for knowledge, a practical approach, and not just theoretical knowledge
. Be passionate about the concept of financial planning
. Strong understanding of personal finance
. Good people skills
. Analytical aptitude
How do I get there?
CFP Lovaii Navlakhi suggests students should start early. “This needs to start at the classes VI and VII level. Basics of how a bank works; distinguishing between wants and needs etc — all practical aspects are a must.”
Enrol for the FPSBI’s CFP programme after high school. Graduates in any discipline can pursue CFP certification.
Typical day in the life of a Financial Planner
Pros & Cons about this career
. It’s a sunrise profession . The CFP is an internationally-acceptable qualification
. May have to face flak from clients when things are not good