You might have a planner, but is he a true Financial Planner? - Ram Valia

There are many folks gallivanting in the financial markets professing a self proclaimed title of financial planners and Advisors. But are they true financial planners? Can they help you plan your finances better? Can they help you secure your financial future? These are the questions that you need to ask yourself. Unlike other services that one opts for, one can't say that he will buy it, try it and then judge and decide whether it is worth it or no. It's about your hard earned money, and even a small mistake can cost you dear and can set you back from your financial goals to quite a big extent.

So its of prime importance to judge and decide whether the planner that you are about to give the control of your money is a real financial planner and considers you above everything else..Your judgement and decision should be based on the following points..

- Is he Certified?

In India and more than 23 countries around the world the CFPcm mark is a symbol that is well connected with a good financial planner. This is because they follow a system of 4 E's
Ethics, Educstion, Examination and Experience. Ethical practices of conduct forms the basis for every CFP certified financial planner. They clear a set of 5 exams and need 3 years of experience in the financial services sector to receive their certification Before they can claim themselves as a CFPcm certified. Not only should the person only be certified but also a practising financial planner.
So being updated with the latest happenings in the financial services frame is also a predicament for maintaining the certification.. this is done by a requirement to be dedicated towards a process of continuous education.

Having a certification be a certifying agency like FPSB (Financial Planning Standards Standard Board) India is not enough. To ensure that the person is practising the learnt concepts of financial planning it should be checked that the person does not come from a specific company that sells products of any specific company. If he does that then the advise will be prejudiced and the aim will be selling the products to you without citing your best interests in mind. So he should be neutral from the company from where he comes.

- Is he a Client Representative?

Being a client representative is very important as it defines the basic role of a planner. He should solely have your best interests in mind. He should not be motivated merely by the commissions he gets from the products that he sells to you. He must evaluate all products and investment advice based upon the fact that how will it benefit you, up to what extent and how will it help you secure your financial future.


- Does he Charge a fee?

As nothing in this world comes free neither should financial advice. On charging a fee the planner is bound to see your interest above his own and also his company's interest. He is your guide and should not be motivated by anything else but your best interest in mind..

This can be tested by seeing if he discloses to you the ref\eral arrangements he has from all product sources. He should tell you all his sources of income so that you can judge the objectivity of his advice. He should list down the fees clearly stating if there are any additional taxes. Are there any commissions that he gets by referring you to any agency for any product that you need. This can enable the client to judge the true basis of your advice..

- Does he present a Contract of Undertaking?

There should be a contract which details out all the offerings of the service and the charges for the same, there should be no array of ambiguity in the terms and in case any arise then it should be cleared before entering an agreement. This contract should also state the serviceability tenure and the statement of client confidentiality. this statemtent of Confidentiality is required as the planner has access to alot of privileged and confidential information regarding the client.
The contract should clearly state the details of regular communications and plan updates modifications and reviews. The client should be communicated about his financial position on a regular basis so that he is aware about the actions taken by the planner and the results of the same.

- How good is his Financial Knowledge?

Not only should the planner be able to make a plan impeccable but he should also of knowledge about the financial markets, the way the equities markets works, the details of the bond markets, the factors that govern the functioning of the economy and how the global factors affect your investments, along with this his skills to work with excel and spreadsheets should be impeccable

- Is his Execution Team as good as he is?

What is a director without his team? What is a king without his countrymen? The phrase of 'A one man army is passé and lame. The planner should have the ability to make the plan and have the team and infrastructure in place with separate departments to execute each function of the plan separately with independent watertight responsibilities and actionable for each department. The departments can be
1) Plan writing
2) Client Acquisition
3) Operations.
4) Research
5) Execution
A well trained staff in each department and a good operations department with well tech-age technology base with ease the process of serving you and you will be highly content of the outcome of the service.

So keeping these points in mind find your true financial planner and be free of all your financial worries.


Happy Planning
Think before you act as
'It's All in the Mind'