Current Issue 13thFebruary 2016 - 19 February 2016, i.e. No. 45

Career Opportunities In Financial Planning

— Dr. Sanjay Tiwari

The period after economic reforms has witnessed an increasing contribution of service sector in GDP which has reached to more than 60% 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

Sr. No. Programme/Course Nature Eligibility University/Institution
1 MBA/PGDM/PGDBA with specialization in finance PG Degree Graduation with 50% and valid score in CAT/MAT/Other screening Respective Universities/ institution (central or state)
2 Chartered Account (CA) Professional (Accounting,taxation & auditing) Depending on entry level The Institute of Chartered Accountants of India (ICAI), New Delhi
3 Company Secretary (CS) -do- (Company Law) -do-      The Institute of Company       Secretaries of India New Delhi
4 Certified Financial Planner (CFP CM) Professional (Financial Planning Insurance, Retirement,Investments & Taxation)   Financial Planning Standards Board (FPSB), India, Mumbai,Website :
5 Chartered Financial Analyst (CFA) Professional (Portfolio Management & Investment Analysis)   Association for Investment Management & Research (AIMR)
6 PG Diploma in Financial Planning (PGDF) PG Diploma CAT/MAT Score or ICFP written International College ofFinancial Planning (ICFP), New Delhi