BasuNivesh now available in it’s own domain www.basunivesh.com from 22nd June 2012.

When I speak with my clients about CFPs, first question from them is what is CFP? So I thought to share how CFPs are differ from Agents, Advisers in a simple language.

Certified Financial Planner(CFP) is the professional certification for Financial Planners which is granted to individuals after completing desired education, examination, experience and ethics by candidate. Financial Planning Standards Board India is the only body in India which grant this certification mark after fulfilling all the above requirements. Presently around 108 CFPs in Bangalore as of today (From FPSB India Page). Now I will explain in detail how CFPs are differ from agents, advisers or the so called self proclaimed Financial Planners in detail.

AGENTS OR ADVISERS: All of us in our day to day life have met so many agents or advisers who represent specific Insurance company or Mutual Fund company or any firm. They usually not take any fee from you but they will get benefits after selling products which are under their kitty. They will not disclose the commission or remuneration they are  going to get by selling the products to you. Few of them are ready to share their profit with you if you purchase their recommended product. They usually recommend you to purchase ULIPS, Endowment Plans or Money Back Plans (If they are Insurance Agents), New Fund Offers of Mutual Funds or without analyzing fund performance they may recommend you to invest in their recommended Mutual Funds (If they are Mutual Fund Advisers)  or in RD, PPF or NSC (if they are Postal Agents). They mainly consider your investment surplus instead of your future financial goals.

So the conclusion is “Took a very narrow view, limiting the advice to investments. Basic intention was to sell. High probability of conflict of interest because of high commission structure for some products. Ready to woo clients with rebates.”

CFPs: They charge fee which is depend on clients profile. Fee is disclosed in the beginning. If invested through them then each products earnings are disclosed in Agreement note.  Their recommendations are mainly on goal based instead of product based. Few of their recommendations include Purchase of Term Insurance, maintain  contingency fund, goal based investment plans to reach individuals life stage goals like children education, children marriage, retirement planning and estate planning. They mainly consider Age of all family memebrs, investible surplus, risk profile, life and health insurance needs, short term, mid term and long term financial goals, retirement needs and past investments when recommending plan to clients.

So the conclusion is “Planner went beyond investments and looked at every aspect of the family finances. The plan laid down specific stratery for every financial goal. One should not see the upfront fees as an unnecessery expenses. It could help you save lakhs of rupees by guiding you in right direction.”

Now it is your turn to decide whom you want-Agents, Advisers or CFPs????

Hope my postings are enjoyable and knowledgeable. Need your unbiased comments also to grow my knowledge too. Happy New Year in advance.

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