Do you agree that there is a big difference between a roadside chemist and a doctor?

A chemist/medical shop is like a dispensing unit, show them a prescription and they give you the medicine. Can a chemist EVER write a prescription? This is just how significant is the difference between a broker/agent and a Certified Financial Planner^CM. The latter is qualified professionally and licensed to render sound financial advice.

Let go back to basics and understand what Financial Planning is and how it works.

What is Financial Planning?

Firstly, it is important to dispel all myths and stories around Financial Planning.

1. Financial Planning is not about portfolio management
2. Financial Planning is not about buying insurance
3. Financial Planning is not about investments
4. Financial Planning is not about buying stocks and commodities
5. Financial Planning is not for the very rich and elite, infact most HNI’s do not need Financial Planning.
6. Financial Planning is not about all that you think you possibly understand

99% people today do not have a clear understanding of Financial Planning. Further thanks be to the institutions who have been grossly misusing the word ”Financial Planning” and misguiding the masses so far. Just think, can you call yourself a chartered accountant or an orthopaedic surgeon overnight?

Financial Planning is about “Planning Life”, it is about “Strategy”, it is about “Knowing” where in life do you stand financially, it is about “Taking Control”, it is about having “Accountability” for each rupee you own, it is about “Exploring Possibilities” from limited budgets, it is about “Achieving” what seemed impossible so far. Sounds abstract… well Financial Planning is about lessons in life management first and money management second.

Defining objective/s is the focus of planning, quantifying what you want without thinking of affordability and availability is the premises of planning and making a strategy to achieve the predefined objective is the crux of planning.

Financial Planning is 95% strategy and 5% choosing products. Wondering why? It is easy to understand. Consider you want to travel from point A to point B. You then have various options like taking a train, bus, taxi, aeroplane etc. Choosing a product is just like choosing a vehicle. The vehicle/s may change mid journey as well, vehicles or product are totally irrelevant. It is the objective and the strategy that is important.

Here is the essential difference between a chemist and doctor or shall we say a broker/agent and a Financial Planner? 100% of a broker/agents job is just 5% work of a Financial Planner. The agent’s world revolves around products and instruments, for the planner this is irrelevant.

Financial Planning is an independent and specialised job, a profession in its own right. Professionals have to undergo a process, exams and wisdom comes from years of experience. It is a matter of time before regulations on Financial Planning enter the Indian financial environment. I am given to understand that SEBI is working on this.

Beware!

1. An agent who gives you a product is not accountable if that product is not suited for you or loses its relevance after some time.
2. Any agent who claims that he does Financial Planning, without having the Certified Financial Planner^CM (CFP^CM) qualification is like a quack.
3. Any insurance company making a claim of offering Financial Planning services is not being honest.
4. Any institution making a claim offering Financial Planning services without having qualified Financial Planners providing the Financial Planning service is cheating you.
5. Real Financial Planning process can take upto 3-4 meetings and about 20 -25 hours of joint work between the client and planner to set things in motion. It is a very elaborate process.

It is time to dictate the quality of advice you deserve.