Moolah Mantra

Ranjeet S Mudholkar talks about the various career opportunities in financial planning.

Ranjeet S Mudholkar talks about the various career opportunities in financial planning.

Indian economy has seen high growth in the last decade resulting in emergence of several new career options for youth, which were not present earlier. A change in the socio economic conditions coupled with demographic patterns has led to an increase in the standard of living and disposable income in the hands of the people leading to consumption driven growth.

The regulatory developments are aiding the progression of Financial Planning as a career option. The Investment Advisers Regulations, 2013 recently issued by the Securities and Exchange Board of India (SEBI), have first time differentiated between “Advice” and “Selling” in investment products. The investment advisers are now established as a distinct class of financial intermediaries. Financial Planning has been highlighted in the regulations and the certification there under as eligible category for accreditation. The recently notified Reserve Bank of India guidelines on wealth management in banks are also on the same lines. It is expected that implementation of these guidelines will also expand the career opportunities for Financial Planning professionals in the banking sector.

Financial Planning helps households meet their life goals through proper management of their finances. The financial goals such as buying a home or a car, children’s marriage and education, funds for medical treatment, retirement, vacation etc. are intricately provisioned in a financial plan which is monitored periodically to make adjustments in the resource and asset allocation. This is to keep the focus on achieving financial goals with ease and certainty. As a financial planner one is expected to consult and help the clients on the above mentioned matters.

Financial planners – the growing need

As per recent estimates India is having over three million financial advisors who serve around 188 million investors holding financial assets. More than 90 per cent of these financial advisors are engaged in selling specific products. There is need for a comprehensive approach focused on advisory over all domains of personal finance, viz. insurance, investments, retirement solutions, tax planning etc. Such approach places clients’ interests in the centre with products falling in line with the financial goals and suitability.

Certified Financial Planner (CFP) Certification

Today, with the evolution of Financial Planning, CERTIFIED FINANCIAL PLANNER Certification or the CFP credentials have come to be recognised as the global mark of excellence in Financial Planning. The Certification is awarded by Financial Planning Standards Board, India to the individuals who meet the stringent requirements of education, examination, experience and ethics. The CFP certification lends credence to the profile of the professional at the same time imparts the knowledge and skills to be successful in the profession. It is recognised in 24 countries globally and considered gold standard in Financial Planning (Wall Street Journal, 2006).

The certification awarded by FPSB India has been recognised as one of the eligible qualifications for registration as Investment Advisers (subject to the accreditation by National Institute of Securities Markets) as per recently notified SEBI ( Investment Adviser) Regulations 2013. As per a survey by a US based consultancy firm Careercast in 2012, Financial Planning has been rated as 5th best profession in terms of monetary rewards and job Satisfaction. (To be concluded)

(The author is the vice chairman and chief executive officer, Financial Planning Standards Board India.