anaging finance is a tricky business. And most people need guidance on questions about where they should invest, how they can save taxes, the best insurance schemes/stocks available, how to plan a retired life, etc. Which is why it makes sense to be such an expert -- a financial planner.
Financial planning is one of the fastest-growing professions and financial planners in other countries are among the highest paid professionals. This new wave is now evident in India as well.
Those who do not seek independent practice can work in banks, financial planning organisations, life insurance companies, accounting or law firms, with stocks and securities brokers, funds managers and credit counselling organisations. Financial planners offer expert opinions on issues like retirement planning, estate planning, financial management of small businesses, trusts, tax, stock broking and investments and debt and risk management.
A career as a financial planner can prove both challenging and rewarding.
How does one go about becoming a financial planner? Read on.
Which body conducts financial planning courses in India?
The Association of Financial Planners is the principal licensing body that certifies Associate Financial Planner/Certified Financial Planner education programmes in India.
AFP is an affiliate of the US-based Financial Planning Standard Board. The objective of the organisation, established in 2001 by major financial service corporations, is to 'professionalise the concept of financial planning in India.' AFP is the apex professional body representing qualified financial planners in India.
"There are 26 charter members in AFP, India," says Ranjeet S Mudholkar, CEO of the association. They include American Express, HSBC, Alliance Capital, Franklin Templeton, MetLife Insurance and Standard Chartered.
How does one join the course?
The candidates have to register with AFP-approved education providers.
Who are these 'education providers'?
They are the entities authorised to run financial planner programmes. You can opt to study in a classroom or through distance learning.
Log on to the Association of Financial Planners web site for a city-wise break-up of authorised education providers. The CFP Education link on the left hand side of the web site will provide you with the complete list.
What is the Certified Financial Planner programme?The CFP professional programme is offered as a distance-learning course through AFP-recognised educational providers.
The student needs to undergo training for a minimum prescribed period before registering for the examination. AFP certification is then awarded, subject to the student having a minimum of three years of relevant work experience in the financial services industry.
What is AFP certification?
Though the minimum education qualification to become a CFP is a graduate degree, an undergraduate too can do the course. Work experience is not a requisite for enrolling in the programme.
However, CFP certification will be granted only to individuals who possess a graduation certificate from a recognised college/university.
Candidates have a maximum of seven years to complete the certification process. To become certified, candidates are required to meet the following certification requirements -- education, examination, experience and ethics.
The CFP certification will be issued to candidates who have the technical competency to write a comprehensive and detailed financial plan for an individual.
How does one get an Associate Financial Planner membership?
The AFP membership programme is targeted at existing professionals who want to upgrade their knowledge about financial planning without doing the entire CFP modules.
What is the course fee?
Individual institutions decide their own fees, says Mudholkar. And these vary according to the infrastructure provided and the method of learning involved, viz classroom, distance education, etc.
How much does a financial planner actually earn?
In the US, a CFP holder can earn between $40,000 and $100,000 annually; in India, he or she could expect to earn Rs 10 lakh to Rs 12 lakh per annum, says Mudhokar.
Financial planners earn in a variety of ways:
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Fees charged at an hourly rate, a flat rate plan, a percentage of the value of the client's assets and/or income or a combination of these.
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Commissions from investment or insurance companies for products sold as the plan is implemented.
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A combination of fees and commissions.
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Salaried employment in financial organisations or other institutions.
How is a CFP different from a CA?
A chartered accountant is trained to be an expert on a wide range of tax issues and focuses on both taxation and auditing.
The financial planner certification covers not only tax planning but also risk management, insurance, estate planning, employee benefits, retirement planning, investment planning and financial plan construction. Apart from analytical skills, the job calls for effective people management and is just right for those who enjoy helping, and interacting with, clients.
For more information, contact:
The Association of Financial Planners
312,Turf Estate
Off Dr E Moses Road
Mahalaxmi
Mumbai 400 011
Phone: (91) (22) 56663268
E-mail: info@afpindia.net
Web site: www.afpindia.org
Image: Dominic Xavier
