“The financial planning profession has been rated the No.1 job in USA by Jobs America Almanac. The CFP (certified financial planner) certificate is one of most prestigious and preferred qualifications in financial planning globally, described by the Wall Street Journal as the ‘gold standard’,” says Ranjeet Mudholkar, principal advisor and director of the Financial Planning Standards Board India (FPSBI).
According to the US Bureau of Labour Statistics, the overall employ-ment of financial planners and advisors is expected to increase faster than the average (by 27 percent or more) for all occupations through 2014. This is the result of increased savings and invest-ment by businesses and individuals; the rising number of self-directed retirement plans; increasing number of HNW (high net worth) individuals and the growing number of senior citizens worldwide. All people in these categories require savings plans and investment advice. Financial planners earn their living by helping people choose securities, insurance and other financial products. They provide services and advice for retirement planning, college funding, estate planning and general investment.
Currently the population of CFPs in India is minuscule — a mere 1,186 professionals with valid certification as on September 30, 2010. Informed opinion is unanimous that in the near future, CFP professionals will be the most sought after and well remunerated finance professionals in India and abroad.
CFP certification programmes are offered in India by FPSBI, which is affiliated with FPSB Inc, Denver, USA, and is the sole licensing authority for CFP certification in India. FPSBI proactively guides the development and promotion of standards for financial planning professionals.
There are two pathways open to aspiring CFPs. For the Regular Pathway, you need to have completed class XII and worked in finance for five years or you should be a graduate with three years experience in finance. Challenge Status Pathway candidates should be graduates with a minimum of three years financial services experience with a specialised degree/diploma/certificate in finance or related subjects (CA, ICWA, LLB, MBA-finance etc). Under the Regular Pathway, candidates have to pass five exams while in the Challenge Status Pathway, only the final exam needs to be cleared.
On average, 4,000-4,500 students have been registering for CFP certification programmes annually. Once a candidate registers, the minimum time required to clear all five exams is four months. After clearing all exams, successful candidates need to apply to FPSBI for membership and subject to the candidate fulfilling the work experience criterion, certification is awarded within 15 days.
Moreover, individuals employed in industry desirous of switching tracks are free to sign up for the CFP certification programmes while working. There are several education providers (colleges) in India approved by FPSBI which offer study material.
For duly qualified CFPs there are numerous employment options. He/she can work in the financial planning/wealth management departments of banks as a relationship/key accounts manager or portfolio manager in asset management/insurance/broking companies. Qualified CFPs also have employment opportunities in the areas of training, software development and media. Alternatively, they can set up their own practice in wealth manage-ment and advisory services. Remune-ration packages for CFPs are on a par with the best in the financial sector.
“Job opportunities for qualified financial planners are growing at a fast pace. Fresh out of the economic down-turn, investors have learned that they need professional advice in financial matters. Companies, banks and financial institutions have understood that over-selling, excessive risk-taking can have grave consequences and are eager to acquire balanced investment and financial planning advice,” say Mudholkar, who has been working with FPSBI since 2002, after qualifying as a CFP eight years ago.
A statistics and computer programming graduate of Ruparel College, Bombay (1994) and an MBA (marketing and finance) from the Symbiosis Institute of Management Studies (SIMS), Pune, Mudholkar began his career with the Birla Capital Asset Management Company before he was appointed the youngest director of SIMS. However in the new millennium following a nine-month stint as head of HRD in Salora International Ltd, Pune, Mudholkar switched tracks to qualify as a CFP and signed up with FPSBI where he was appointed its first director in 2002.
Enthused by the potential of FPSBI to inject a new genre of trained CFPs into India’s financial sector, Mudholkar looks ahead with much optimism. “If we look at regulatory trends, they certainly indicate a clear shift towards profession-alisation and fee-based advisories in the financial services sector, following growing demand for financial planners from corporate and retail investors. A number of other factors like scaled-up training infrastructure and mass awareness about the need for financial planning will boost demand for CFP professionals. The compounded annual demand growth for CFP certification programmes in the past two years is 63 percent. We expect a 40 percent CAGR over the next three years,’’ says Mudholkar, assuring a bright long-term future for young CFPs.
Indra Gidwani (Mumbai)