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Recognizing and Strengthening of the Profession

The challenges of financial planners in a tropical country in transformation

By Martin Casals Iglesias

Brazilian Financial Planning Professional Martin Casals IglesiasJust imagine a place where the prices of products sold in a supermarket change several times during the day, or a place where you never know whether the local currency will change within a month, or a place where one of the best alternatives for long-term savings are telephone lines. If all these things seem like an absurd fantasy, it’s because you have not lived in Brazil in the eighties or early nineties.

In an economy with these characteristics, long-term planning disappears completely from the spectrum of analysis of families and corporations. The economic decisions are limited to survival, the next day.

Obviously, not only Brazil has gone through a time like this. Some Latin American countries have gone through it, as well as Germany before the World War II.

1994 was a great year for Brazil, at least for two reasons. First, that’s when hyperinflation was defeated by a successful stabilization plan, which allowed Brazilians to plan for the future, especially in its two most important aspects: investment and credit decisions.

But as the economy was stabilizing and interest rates falling in the second half of the 2000s, personal financial decisions became more complex. For the first time the population had enough credit available to finance a property in the long term (like 20 or 30 years), as well as assets other than fixed income, like stocks, began to be part of the investment portfolios of many Brazilians. Likewise, people started to plan their retirements.

In parallel to the stabilization movement were increased interactions with other countries in the world. More and more people began to travel abroad, whether for leisure, study or work, and more and more foreigners came to live in Brazil.

In this context of massive changes, personal financial planning becomes a decisive factor in people’s success. Extensive literature on the subject began to be produced and the first Personal Financial Planners appeared in the market. The first professional certification happened in 2003, with only a handful of pioneers achieving certified status. Today there are around six hundred certified professionals and the number is growing. Families realized that dealing with credit, investment, preparation for retirement, possibly dealing with realities on shore and off shore, sometimes subject to different tax laws, is not a challenge for amateurs.

At this moment financial planners are just beginning to be recognized as the most reliable partners in the people’s effort in achieving their financial goals, whatever they are. Now we are living moments where recognition and strengthening of the profession are the most important challenges.

Oh … I almost forgot the second reason why 1994 was an important year for Brazil. That was the year when, right on the US territory, after 24 years of losses, Brazil won for the fourth time a World Cup, and that’s also really important to us.

Yeah! These are the reasons why I think 1994 was a great year.

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