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 to witness 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, place to start is also a good by the NISM-Series-XA: Investment Adviser (Level 1) Certification Examination and NISM-Series-XB: Investment Adviser (Level 2) and working with a practicing 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 standardized 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 pursue or opportunities with various entities. These qualifications also open an array of opportunities for those looking for jobs.
Insurance: Insurance companies have recently started hiring qualified experts to help individuals and families, analyse, identify and select policies that fit into their financial and future requirements.
Financial institutions: Banks and financial institutions now have advisors to guide people select the right financial products for them.
Family Wealth Management advisories: Here, an individual can help families make detailed financial plans, with a meticulous scenario and outcome planning to provide the right investments/insurances and help in areas such as in debt management.
New-age outfits: Fintech and technology-backed financial services platforms also need these experts who work in favor of the client.
The writer is the Co-Founder and COO of Basis, financial services APP and community-based platform for women