Who is a financial planner and what services does a Certified Financial Planner (CFP) offer?A financial planner is like a doctor. Just as a doctor manages your physical self, a financial planner manages your financial life. He will not just sell a product, but will first understand your needs, objectives, define your risk profile, then make an asset allocation and finally choose products that provide you with a solution to your financial problems and help you achieve your goals. The Certified Financial Planner (CFP) is a planner who has been through the rigorous process of education, experience and examination. Do I have to pay for advice? How much?It can be a mix of commissions and fees. Just as you pay a doctor consultation charges, you will pay a planner fee for advice. How much to pay will be determined by individual planners and the institutions like banks who hire the planners. To make the process transparent, the CFP has to disclose his commission and fee to the client before any products are sold. The Association of Financial Planners have included this in the Code of Conduct for planners. "The planner has to disclose upfront his fees and commissions to customers" Where can I find such a planner today?The first batch will roll out in September 2004, and by September 2005, we shall have some 400 CFPs in India. Some will set up their own practice and you can approach them directly. Others will get hired by the charter members who are India's top banks, mutual fund and insurance companies and can be accessed through them. Will the CFP be restricted to high net worth clients? Will the mass market really happen?Financial planners are not just for high net worth clients, this is not private banking. The number of planners in the market will ensure that the service comes to benefit people who today cannot go the private banking way. For that we need many more CFPs in India and we are taking steps to expand the role of the education providers to expand the base. If the mutual fund agent, the insurance agent and the CA could misguide individuals, the financial planner has the power to totally destroy a person’s financial life. What safeguards do you have to prevent this from happening?This is an internationally respected brand name and we will not allow anyone to harm it. We will ensure that there is integrity in the planners and any complaints will be resolved on priority. But most associations in India are run like closed clubs with no member getting really punished for wrong advice. How are you going to be different?We will suspend the license of an erring planner for the rest of his life. Frankly, after a person has spent two years studying and taking these exams, he is unlikely to waste the time, money and effort by deliberately cheating. We are very clear, the integrity of the brand name is very important and we will maintain it in India. There are issues amongst the students about the education and examination process, how will you ensure world class planners if there are problems at the core of the process?The first batch is still to pass out and this is part of the learning process. We are learning from the mistakes and are taking steps to rectify them.
