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Financial Planning in India: Ready to Grow

By Suresh Sadagopan, CFP

Suresh Sadagopan CFP IndiaWhen a seed is sown and watered for a couple of days, it sends down roots and germinates, lifting the seed that was planted and showing it to the world as cotyledons. Then, this delicate sapling shoots out a couple of tentative leaves and it’s ready for the world! Should the conditions prove conducive, the sapling would grow, flourish and claim its place under the sun.

The financial planning profession in India is like that sapling with two cotyledons and a couple of tender leaves sprouting. It is at a nascent stage. The awareness among the general public is low.
Worse still, they have wrong notions about Financial Planning.

This is due to the fact that the term “financial planning” is used like a potter uses putty – each one “interprets” financial planning in a way that it dovetails with their offering. Insurance companies sing hosannas about how a parent can do financial planning by buying a Child Education ULIP! Investment companies are latching on to financial planning too… they lure investors to invest small amounts and secure their retirement. This, according to them, is financial planning. It is like the story of five blind men who describe an elephant based on whether they have touched the trunk, tail or stomach!

Indiscriminate use of the term has created quite some confusion in the minds of the general public. The true import of financial planning is missed. The fact that financial planning is a blueprint for the future and is not some investment advisory service, is missed completely.

But, the situation is slowly changing with awareness being created by financial planners themselves, who are positioning financial planning in the right context. Media has been quite supportive in India and has embraced wholeheartedly the concept of financial planning and its usefulness to the public. There has been quite a bit of coverage on financial planning as a concept itself. Several publications also have come up with case studies, showcasing a client’s situation and a suitable plan drafted for them by a financial planner. This has somewhat corrected the perception in the minds of people that financial planning is some kind of investment advisory. Apart from this, financial planners also do write in the media about what constitutes financial planning and the merits of crafting a plan for oneself.

All these have improved the situation, somewhat. The general public now wants financial plans and they are slowly realizing the importance of getting a holistic view of their situation and professional advice on the way ahead for them. Paying fees for financial advice is for most part, an alien concept. Again, this is changing now and there are financial planners in India who have been charging a fee for financial planning. However, financial planning is still a novelty and financial planners are seen as alchemists of yore.

Fortunately, financial planners are doing their bit to promote the profession. They are conducting seminars and workshops to popularize the concept of financial planning and conduct financial planning sessions for the public. These efforts and the positive experience of those who have gotten a plan are what is slowly driving up the traffic for practitioners.

With India making rapid strides on the economic front, the wealth among the so called middle- class is booming. When wealth and along with it, aspirations, are on the rise, financial planning is also gaining currency. The future seems quite promising for this profession, though the profession has just sprouted two tender leaves now. An appropriate song to describe the situation would be, “the future is so bright that we got to wear shades,” borrowing from Timbuk3!

3 comments to Financial Planning in India: Ready to Grow

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