Financial planners are now amongst the highest paid professionals globally, says Ranjeet S Mudholkar.
Financial planning is an ideal career for the people who like to interact with people, who have interest in markets and a flair for mathematics. They are now one of the highest paid professionals globally. As independent financial advisors your income may depend on a variety of factors including expertise, experience, clients, geographic location, etc. You may adopt the following models for income generation:
Fee-only model: You may opt for rendering services and charge a flat hourly fee or plan fee.
Commission model: You may earn from commissions from product manufacturers for the sale of their products. This is the easiest model but suffers from conflicts of interest and lack of transparency.
Fee and commission model: Here you charge a combination of both fees and commissions based on client’s comfort level and your operational systems.
Fee-offset model: To provide a better value and transparency to clients, you may fix yearly fee with clients and may offset it against commissions received from product manufacturers.
Asset under management model (AUM): Here you charge on the basis of percentage of total financial assets of the clients. The limitation in this model is when the asset size is very large or very low.
A wide range of career opportunities are available for those seeking to enter this field. Financial planning is increasingly becoming an integral part of financial services sector in India. Job opportunities are available with private banking, wealth management, insurance sector, broking outfits and mutual fund companies. They are employing financial planners to provide value added services to clients and infuse an element of advisory in their distribution channels. FPSB India has passed a board resolution to give first preference to CFP professionals in recruitments.
There are other options too as financial planners are exploring new avenues. Here is a low down on some of careers:
With the growing demand for focused literature in the financial planning space, the newspapers, magazine and television channels are looking for financial planners as expert advisors and panelists.
Financial planners are sharing the platform with industry experts in panel discussions and forums addressing varied issues relating to retirement solutions, insurance needs besides educating investors.
There is also the choice for taking up faculty assignments. Planners are also popular amongst publishers to come up with material on financial planning and wealth creation.
The author is the vice chairman and CEO, Financial Planning Standards Board India