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The State of the Korean Financial Planning Profession

By: Jaeki Jung, CFP

In Korea, the term “financial planner” is considered to have a definition similar to that of “insurance planner.” This is because life insurance firms have designated their insurance planners as “financial planners,” “financial consultants,” or “financial advisers” even before the introduction of the CFP certification, and consumers have become familiar with such designations.

There is low public awareness towards the occupation called “insurance planner,” although the sale of insurance policies is not a job that can be looked down on. Such low awareness may be attributed to the easy entry and high turnover rate. Although competent CERTIFIED FINANCIAL PLANNER professionals have been produced steadily since the introduction of CFP certification, we have a long way to go before CFP professionals shall be recognized as professionals, such as doctors or lawyers. There are many people who are unfamiliar with CFP professionals.

 Attitudes Changing

However it is encouraging that consumers are changing their attitudes little by little in the midst of the recent global financial crisis. Those who unconditionally opted for investing in high-yield financial commodities or preferred depository assets without any loss to the principal amount invested have begun to make reasonable choices. They are also seeking a way to effectively manage the risk arising from insurance while reducing costs. However, they do not have any slightest idea with whom they should discuss these matters.

KFPA (Korea Financial Planner Association) collaborated with volunteer CFP professionals and AFPK professionals (Associate Financial Planner Korea) to offer free financial planning consulting for low income families and pro bono financial planning services for the middle-income class. As a result, consumers are gradually recognizing the value of financial planning as they experience a series of processes ranging from the analysis/evaluation of their financial state to the exploration of action plans suited for the objectives. This contrasts sharply with the past, when they did not have a reason to personally meet with CFP professionals unless they intended to buy financial commodities. University students seeking jobs in the financial industry are getting CFP certification, above all else, which may reflect that a rosy future awaits financial planners.

 What’s Next?

The financial planning industry in Korea is at the beginning stage and gaining momentum on its growth. Over the last decade, efforts have been made to increase public awareness toward the concept of financial planning and produce CFP professionals capable of delivering financial planning services. As a result, the financial planning industry achieved dramatic growth. Now, CFP professionals are offering services tailored to the specific needs of the customers. Some CFP professionals are seriously considering making a transition from the commission-based revenue model to the fee-only or fee-based model. I expect that these efforts will pay off soon.

 

1 comment to The State of the Korean Financial Planning Profession

  • Yulhee Lee

    Hi Jaeki,

    I have been looking for information about the financial planner industries in Korea, and your article was very helpful.

    I am currently working in Goldman Sach Ops under asset management team and want to be financial planner in Korea. I have a lot of questions about it, and your advise and feedback will be valuable. May I contact you if you don’t mind?

    Thank you,
    Yulhee

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