56% think FP will be an established profession in 3 years

Majority of those who took the poll “When do you think financial planning profession will be recognized in India?” on this website said this profession will be recognized within 3 years. The poll has received 255 votes – I think it’s a considerable number to represent the collective opinion of financial planning fraternity in India (which is really small).

Of the total votes polled – 11% said financial planning is already a recognized profession and a massive 45% of voters had faith that it will be recognized within 3 years.  So we can say that majority of this community i.e. 56% believe that within 3 years this noble profession will get its due recognition.
And the remaining 44% think it will take more than 3 years for the recognition with 26% voting for 3-6 years and 18% voting for more than 6 years. And I am a part of this minority as I voted for 3-6 years.
Here I put across my thinking on why I voted for 3-6 years and what the question means to me. And I request each one of you who took this poll, to leave a comment on this post justifying your stand. I think it can bring to the forefront a lot of valuable inputs for the evolution of this profession and how each one of us relate to it.
To be precise I think it will take around 5 years before we can call ourselves ‘professional financial planner’ and majority of our prospective clients actually understand what we mean by that term without much efforts & explaining. In simple terms that’s recognition for me at this juncture. Although a regulatory stamping to perform professional duties and a strict disciplinary procedure for violating ethical standards can be of highest recognition, I do not want to bet on it given the pace of regulatory reforms in this sector.
My statement is ambiguous till I don’t clarify what “professional financial planner” and “prospective clients” mean to me;

Who is a professional financial planner?

I would call someone a professional financial planner if s/he exhibits the following characteristics;

1. Has knowledge of all general concepts, strategies and products of personal finance
2. Has the skills & aptitude to make comprehensive financial plan for clients.
3. Has a fee-based practice model which can include both fee-only or fee-offset
4. Is ethical in his/her conduct and offers client-centric advice

 

Who is a prospective financial planning client?

Okay, everyone needs financial planning in some way, no debating on this. But not everyone can be a prospective client of a professional financial planner for the simple reason that we need to make a living out of this job, therefore someone who has the ability to pay our fees can be considered as a prospective client.
In today’s scenario I would call a prospective client who;

1. Has the ability to pay at least Rs. 10,000 p.a. as fees for professional advice. My practical experience says if someone (family) is earning Rs. 4-6 lakhs and more p.a., s/he should be able to pay up this kind of a fee.
2. And who doesn’t want to manage money matters on their own (Do-it-yourselfers) due to various reasons like inadequate knowledge, too busy or lazy, complex financials or simply respect for professionalism.   

 

And why I think it will take 3-6 years?

In the first place even if we as a fraternity achieve this recognition in next 6 years, it will be no small feat. And my take of 3-6 years is really being optimistic. I am 30 and if I start getting complete recognition even when I am 35, I would still have around 25 years to make a good living out of this recognition. No complaints if this happens!
And in quick pointers, allow me tell you why it will happen in the next 3-6 years (will write a eloborate article sometime later);

• Changing regulatory framework
• Move towards no-load structures
• Complexity of financial products & services
• Dismal experience with financial intermediaries
• Increasing income levels
• Exposure of Indians to global markets
• Higher goals & aspirations
• Willingness and ability to pay fees
• Higher savings level
• Availability of competent professionals
• Support from Media

The above mentioned logics and opinions are completely personal and I am not forcing them on anyone here.

Take a New Poll (Use the form on right sidebar)

How much should be the professional fees for making a comprehensive financial plan?

• Less than Rs. 5,000
• Rs. 5,000 - Rs. 10,000
• Rs. 10,000 - Rs. 15,000
• Rs. 15,000 - Rs. 20,000
• More than Rs. 20,000

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