|Are you looking for Financial Planner? If you are, you should go through this article that talks about almost all the necessary information you need before hiring a financial planner. Most of the clients are confused on simple things like, where to find a good financial planner, what they should expect from financial planner and most importantly they do not understand the financial planning environment in India and how it operates. There are lots of myths and misunderstanding around the financial planning field and this article will give you most of the basic information you need to be aware of while hiring a Financial Planner.
What is a Financial Planner in Bangalore and what is the Certification for Financial Planning
A financial planner is a professional who helps his clients to deal with various personal finance issues through proper planning. Just like we have a doctor for our physical problems, we have Financial planners for our Financial problems. Just because you know “what is a Mutual fund” or some “Tax laws” or can buy and sell stocks on Stock market, it does not mean that you don’t need a Financial planner. Financial Planners are professionals who have done the certification, have learned strategies and have gone through in-depth knowledge to understand how to restructure a common man’s financial mess and come up with a sound long term plan which will help a client achieve his/her financial goals in future.
Just like CA, MBA, CS and other professional certifications, there exist a certification course for Financial Planning which is called CFP (Certified Financial Planner). Read more about CFP Here. CFP is regarded as the top most certification in Financial Planning and it is recognized worldwide in majority of the countries.
Current Status of Financial Planning Practice in India
There are two ways a Financial Planner makes money
By pure consulting and advising (by making the financial plan)
Through Commissions (from products sold to clients)
Combination of 1 and 2
In India people dont value consulting and hence Financial planners are having a hard time getting clients whom they can charge on pure consulting basis. Therefore what has happened is most of them make money through commissions from selling the products. Based on this fact most of the agents, wealth managers etc have completed CFP certification just because they can get the tag of “Financial planner” and then make a financial plan and finally sell products to them and make good commissions, hence at present the current status is that 8 out of 10 CFP’s in India are associated with some mutual funds or Insurance company as either of
They are still doing the same old work with a new certification in hand called “CFP” because they know that in coming days CFP’s is what everyone will prefer to hire for their Financial planning and similar services. These so called just for name sake CFP’s make the financial plan and when you buy the products, they will make majority of their money through commissions.