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The State of the Financial Planning Profession in Korea

Junesoo Chang, CFPBy Junesoo Chang, CFP

In Korea, the financial planning profession is not yet widely recognized by the public.  Likewise, not many Koreans distinguish financial planners from ordinary financial advisors. I think financial planning is still in its early stages here.

It has been about 10 years since Financial Planning Standards Board Korea was set up and began to produce CERTIFIED FINANCIAL PLANNER professionals. With high hopes, the CFP professionals have tried to practice financial planning for their clients and customers, but public recognition is not yet satisfactory.

Factors For Low Financial Planning and CFP Certification

In my personal opinion, there are three factors that make public awareness for financial planning and CFP certification still low. The first is a cultural factor. Most Koreans are not familiar with paying fees for consulting services, like financial planning. With the time-consuming task of general financial planning, the planners are not properly remunerated for their time and effort.

The second factor is an educational problem. Compared to those of western countries, the Korean public education system pays little attention to financial literacy.

The third factor is CFP professionals themselves. It is understandable that CFP certificants are running businesses with the tool of financial planning. For a sustainable business, they should make proper earnings. Under the current environment, it is not easy to maintain balance between true financial planning with meager remuneration and financial products sales with quick money.

Looking Forward 

A positive sign is that even if it is slow, the value of financial planning is understood by a growing number of people.  With the retirement of Korean baby boomers, the public is beginning to worry about retirement life, mainly financial matters. More frequently the media reports on financial planning topics. A small number of financial services companies begin to focus their business on financial planning.  Some independent CFP practitioners are successful with their main business of financial planning.

To expedite public support and recognition for financial planning in Korea, the CFP professionals here should not wait for the passing of time. They need to play a leading role. Above all, the financial planners, especially the CFP professionals themselves, should understand that they are different from ordinary financial advisors who focus mainly on financial product sales. Of course, financial planners also do advising and financial product sales, but their practice is much more deeply related to their clients’ overall life events. Longer-term relationships and deeper trust between financial planners and their clients are essential. Financial planners need to provide more value in their practices. In business terms, they need to bear in mind that deeper and longer relationships with clients can bring more referrals and longer, more stable income.

As shown by successful financial planners, CFP professionals need to market financial planning more than financial products. As the number of successful CFP professionals with financial planning businesses grows, their practices will be more widely known to the public, resulting in more public awareness and recognition. Networking by successful CFP professionals is especially important for the promotion of financial planning. Combined efforts can produce a higher level of practice and give more value to clients and customers, resulting in faster public recognition for the financial planning profession here in Korea.

 

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