As one of the youngest professions, financial planning is continuously evolving, trying to create space for itself and fit into the broad framework set by regulators across various countries. Financial Planning Standards Board Ltd. or FPSB, a nonprofit association that manages, develops and operates certification, education and related programs for financial planning organisations, is playing a key role in this process. Noel Maye, CEO of Denver-based FPSB, who was in India recently, spoke to Sandeep Singh and George Mathew said that consumers in India are largely unaware of what financial planning is all about. He also discussed the role he hopes to play in establishing financial planning as a profession. Excerpts:
What is your take on the financial planning industry and where does India stand?
There is tremendous need and demand but it may not have woken up and realised financial planning. So opportunity and challenge in India is to communicate what it is and then be ready to respond to that demand. We finished the year 2012 with 150,000 CFPs across the 24 territories and India has the tenth largest CFP professional population... I see a substantial entrepreneurial opportunity in India. There is opportunity for financial planning to emerge here both by delivery through large firms and through the independent advisor community. That does not happen in all the markets.
Do you see acceptance of financial planners and advisors among consumers? How do people look at CFP certified professionals?
The challenge is that consumers are largely not aware of what financial planning is and then the term itself is largely overused, misused and abused and the fact that almost everyone is an advisor goes to the heart of the problem. There are product sellers, advisors and financial planners and the first challenge for us is to communicate that it is a distinct practice and its actually process based and not product driven.
The other thing is the line of separation. It’s the government’s role to create that line and we would say, why not create a box. We have invited regulators for protecting the term financial planner or financial advisor by