Introduction
 The
period after economic reforms has witnessed an increasing contribution
of service sector in GDP which has reached to more than aqqqqqq160% with an
annualized growth rate of more than 10%. One of the necessary
ingredients of inclusive growth is the demographic dividend (i.e. the
employability to the young working population between age group of 15-59
years). With these strengths, the service sector is estimated to have
the potential for creating 40 million jobs and generating additional $
200 billion annual income by 2020. Among services, BFSI i.e. banking,
financial services and insurance are more crucial because these are the
sectors which are directly or indirectly related to the growth of other
sectors. Planning the funds so generated requires skilled people in
order to advise on more investible avenues and also the appreciation of
the same. The importance of financial planning in this context becomes
more relevant and hence the profession which in other way is a
consultancy or advisory service in itself.
Financial Planning is one of the fastest-growing
professions across the world and with a huge demand-supply gap in India
as the youngsters planning a career in Financial Planning have a bright
future and can take advantage of many opportunities coming across in the
financial services sector as discussed above.
Financial Planners and their Role
As clear from the name, financial planners are the
professionals who plan the funds or money of their clients which is not
only a tricky business but also challenging and difficult task. Every
individual wants to save and invest the funds for future to fulfill the
liabilities and other social commitments be it higher education to
children, marriage of children, retirement, house construction, medical
and health purpose or any other. Financial planners offer their advice
to the persons on their investment and saving options to achieve their
social, personal, professional goals and commitments arising in future.
Most people need guidance on where to invest, how to save taxes, the
best insurance scheme (life as well as medical), which avenue to invest
in, which stock to hold and which to sell, how to plan future career of
their college going children and their own retirement. For all such
services; planners come into picture for rendering expert advice and
consultancy to their clients on utilizing the hard earned money and its
better use for achieving financial goals. The services provided by
financial planners are not restricted to individuals but also the
corporate and institutional clients such as mutual funds, merchant
banks, retirement funds, insurance companies, portfolio manage-ment
firms, stock investment companies, banks, financial institutions, tax
consultancy and pension managers also require their services. Thus, the
financial professionals working as financial planners can be categorized
as individual and institutional. The following role and functions are
performed by the financial planners:
• They identify the financial and personal goals of
their clients and the time period of investments or savings for planning
the funds.
• Financial planners assess and evaluate the capacity
and financial strength of their clients for better utilization of funds
with them.
• They study the market potential, investment avenues,
instruments of investment, financial products available and educate,
suggest and advice to the clients.
• They assess the risk-return of the investment options
with the help of analytical techniques and in consonance with the risk
bearing and risk taking capacity of their clients.
• Tax consultancy is an area where financial planners
are useful because they are in touch with the latest taxation structure
by the government and thus they suggest their clients to invest the
amount of money in tax-saving instruments for better return and assured
appreciation.
• They are also responsible for guiding and suggesting
their clients about the comparativereturn-risk profile of the invested
funds in different instruments.
• They keep their clients abreast with the updates on
financial products having different characteristics to suit their
individual requirements.
• Financial planners also help their clients by advising
them about the right time to invest and proper timing to divest or
divert their money from one option to the other and for what time period
to remain invested in a particular instrument.
• They help the clients by providing quick and immediate
service according to their needs and also process the documents and
accomplish paper work formalities required thereby saving their time.
• Managing the wealth of their client HNIs (High Net
worth Individuals) or corporate isone of the functions performed by the
financial planners.
• Financial planners do financial analysis, business
analysis, research related to financial and expense performance, rate of
return, depreciation, working capital and are also involved in
preparation of financial forecasts, budgets and analyze trends in
revenue, expense, capital expenditures and other related areas.
• Retirement and insurance planning is also an area
where financial planners have a role to play. They advise their client
on various pension schemes and insurance products with risk-return
profiling.
• In addition to the above duties the financial planners
frequently make their clients aware about the recent policy changes and
economic environment which may affect the investment made by them and
accordingly advise, revise or modify their investment strategies.
Employment Avenues in Financial Planning
In view of the duties and responsibilities of financial planners there lies vast scope of employment in the following fields:
Initially a financial planner can start
his career with a wealth management firms, HNI, tax consultancy,
insurance product distributors, pension funds, financial services firm,
banks and financial institutions offering financial products at an entry
level position i.e. trainee or executive. Later on with the experience
he can be absorbed in middle level management on position of sales
manager, wealth manager, relationship manager etc. On gaining more
expertise and experience in this filed he/she can rise to ‘the position
of functional head of the department with increased responsibilities
such as regional or area heads of his employer. If you have got the
specialization in anyone of the areas of financial investment then
salary is no limit. Retirement funds, HNIs and insurance require
professionals with specialised experience of these products. New
opportunities lie in the field of financial planning of real estate and
trusts which is still untapped with lot of potential. In private
companies there is always a huge demand for financial planners.
Experienced Financial Planners can find satisfying careers in investment
banking, financial consulting, and financial analysis and insurance
companies.
Knowledge Process Outsourcing (KPO) firms provide
employment to financial planners as Data Analyst, Market Researcher,
Client Development Analyst, Derivatives Analyst, Equity Analyst,
Research Associate etc. Similarly financial planners are much sought
after in the brokerage houses for positions such as research analysts,
business analysts, research associates and technical analysts etc.
Banks require qualified and experienced
financial planners for managing their investment advisory wing, managers
for financial institutional investments and Investment Relationship
Manager for their portfolio and merchant banking divisions. For the
trade finance divisions relationship managers are required by banks. For
retail division and mutual funds wings, the professionals in financial
planning are appointed by banks in various capacities. NBFCs
(Non-Banking Finance Companies), AMCs (Asset Management Companies) and
financial planning companies also recruit financial planning
professionals at various positions.
Self-employment is also the option for
those professionals who want to tap the existing potential in their home
towns or cities. A desired qualification with a set of skills is
necessary conditions for becoming a successful financial planner. The
only thing required is interpersonal relations and skills with
fundamental knowledge of investment and financial planning. Financial
planning is a fee based service and the fees may be in form of
commission from the client or fixed depending upon the nature and type
of advice and return on investment.
Journalism is an area where financial planners can
capitalize their expertise provided they possess writing, analytical and
presentation skills with a passion for imparting financial knowledge to
the public with convincing ability analytical authenticity. In print
media they can be regular columnists on various specialized products or
they can act as panel experts on electronic media covering investment
and business news.
Increasing financial literacy is gaining importance
nowadays and laymen who are interested in spreading basic knowledge of
financial planning, retirement, wealth creation, asset management and
investment can be associated with the authoring of literature and books
on the subject.
Financial Planners are supposed to
possess interpersonal skills can deliver lectures, impart education,
organize seminars to literate and convince the people of various social
and economic backgrounds. Also there is enough potential in teaching,
training and research in the area of Financial Planning. Even financial
planning and consultancy can be done on internet using networking sites
following professional and ethical code of conduct.
Skill Set Required for Financial Planning
Aside from a possessing professional
qualification and desired certificate/degree/diploma, the various skills
and proficiency required to be a financial planner include;
interpersonal skills, convincing personality, patience, strong
Commitment to client, effective communication, positive attitude, strong
analytical ability, problem solving skills, latest information about
environment and legislations related to tax, business or profession,
initiative, creativity, relationship management, soft skills on
computers, logical mindset, presentation and knowledge of local dialect
for establishing better connectivity with the clients and time
management skills.
Professional and academic courses available in Financial Planning
Financial Planning has varied dimensions
as is relates to the planning of finance with individuals, companies,
firms, stock broking entities, financial institutions, financial
services providers and banks. Though there is no restriction of specific
degree/diploma to become a financial planner, under graduate degree in
commerce, statistics, economics, business or having business knowledge
is desired. Most of the universities/institutions offer MBA/PGDM/PGDBA
courses with specialization in finance will add value to the
professionals. Some institutes have started certificate courses with
focus on financial planning. More important is the acumen, attitude,
business related knowledge including taxation, accounting and insurance
which are essential to be a financial planner. Let's have a look at some
of the professional and academic programmes and courses in the space of
financial planning:
List of programmes/courses related to financial planning
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