The Hindu Business Line : Professional model mooted for financial planners

THE country's financial planning establishment is urging the Government to allow only qualified planners to practise in the country. The Association of Financial Planners (AFP), in a meeting with the Ministry of Finance held recently, has recommended the establishment of a professional model, a move that is expected to create new benchmarks for investors.

The association, which has in this context underlined practices followed in countries such as Singapore, Australia and Malaysia, hopes that its efforts will ultimately lead to healthy norms affecting the "financial state of affairs" of individuals. It has pointed out that financial planning is multi-disciplinary and should be handled by only qualified personnel.

AFP representatives have also come up with a set of recommendations, some of them with regard to the forthcoming Budget. Others are more long-term in nature, a note circulated by the association has stated. The short-term recommendations include proposals relating to certification & membership with AFP as well as overall investor education.

The Budget, it is felt, should refer to two key elements — `advice' and `selling' (with reference to financial products). It should also incorporate a policy statement on the matter of regularisation of the financial planning industry. The association further intends that educational institutions should include financial planning in their syllabi; in fact, it has underscored the need for introduction of specialised courses on the subject at senior levels.

AFP has also worked out two significant long-term recommendations:

Establishment of a statutory body or self-regulatory organisation which may be set up through a proper legislative process. This will regulate financial planners and grant licence to members. It will also take up investor education programmes.

Recognition to the CFP or the AFP (Certified Financial Planner/Associate Financial Planner) marks. These should be acquired by individuals who wish to become practitioners as planners or advisors.

The meeting with the Finance Ministry was attended by Mr N.S. Sisodia, Secretary (Finance Sector) and Mr U.K. Sinha, Joint Secretary - Capital Markets & Pensions.

A number of other markets have practices that may be followed in this country as well, the association has mentioned.

In India, it is an organisation aimed at promoting the financial planning profession.

The idea is to create a large base of planners who will provide ethical and sound financial advice to the investor community.