The last year and a half has taught us many lessons. One that no one can deny the need to have a better understanding of and handle over our money. What we have witnessed in the last year has also had far-reaching implications on our finances. We’ve seen people in vulnerable situations with the wrong insurance policies or no idea how to access them. Families, whose wealth was being used up for medical bills. And, general uncertainty among working professionals and youngsters, who felt unprepared for this situation.
During the lockdown, people working from home also began to look at saving and investing more. This led to an understanding of the value of paid advice versus free inputs (often not tailored to their needs) on their money. This widened the opportunity for personal financial advisors. So what role does a personal finance advisor play?
“Help me help you”. The famous line from Jerry Maguire pretty much sums up the role of a financial planner or advisor. This individual is qualified to help you manage your money better, understands your income patterns, expenses, liabilities and everything else that has to do with your money. What is your risk tolerance? How will that determine your investing decisions? How will your investments align with your future financial goals? What is the path that you need to take going forward? What is your current asset allocation and what changes are needed? The advisor is an expert on financial products and how they can fit into our life.
The opportunities for Certified Financial Planners or SEBI-certified Registered Investment Advisors (RIAs) are plenty. “For a country as huge as ours, there are just around 1,400 RIAs and around 2,000 CFP professionals in India,” says Rajesh Krishnamoorthy, Country Head, Financial Planning Standards Board (FPSB) Ltd’s India liaison office.
In the CFP course, you can choose to go through all the levels of qualification or specifically select Investment Planning, Retirement and Estate Planning or Tax Planning. Alternatively, a good place to start is also by completing the NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination and NISM-Series-X-B: Investment Adviser (Level 2) and working with a practising RIA or a Certified Financial Planner. Each of these courses has an attached cost and you can opt for one based on where you are in your career. Some may want to pursue these courses to better manage their family’s money.
In terms of compensation, different advisors charge based on the depth and breadth of services provided. There are standardised services provided and practices to be followed specifically as a SEBI RIA and this professional practice is regulated by SEBI. You can either practice on your own or pursue …….