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My Life as a Financial Planner

Mukesh Dedhia, CFP, IndiaBy Mukesh Dedhia, CFP

I would like to tell you the story of my life, and it might even inspire some of you to become financial planners.

As a student, I never dreamed I would be a full-fledged wealth manager, but for the past 10 years, I have been doing just that.

In addition to being a CFP professional, I am also qualified as a Chartered Accountant (CA). I became a CA in 1988 and immediately started practicing. After 3 years in practice, I longed to be in a more dynamic field. That is when I shifted my focus towards capital markets and in 1991, started working as a sub-broker. Not only did I enjoy the transition, I was successful, too. I immediately applied for a NSE and BSE membership to become a broker.

In the early 1990’s, there was a serious economic crisis in India. India had to airlift its gold reserves to get a loan from International Monetary Fund (IMF). At this time, Prime Minister, P.V. Narasimha Rao, took over, and Financial Minister, Manmohan Singh, uncaged what was called the “caged tiger”. The Narasimha Rao government ushered in several reforms that are collectively termed as “liberalization” in Indian media. From 1990 to 2000, India’s economy was very volatile, but the economic policy reform yielded very satisfactory results, including 4-4.5% GDP growth rates.

This economic volatility helped me to make a good living as a broker, but I felt as though my clients were not as successful as me, which was frustrating. Even though I was qualified as a Chartered Accountant, I didn’t have the experience or knowledge to instill discipline in my clients for their investments.

CFP Certification in India

Then, I was introduced to a guy, who was also a CA, who was working with Bank of America in the wealth management department. He also had a CFP designation and when I asked him about his credentials, he explained to me that in the US, if someone wants to be a wealth manager or financial advisor, CFP certification is the most sought after mark. After that day, CFP certification stuck in the back of my mind, and in 2003, I saw an advertisement stating that CFP certification was being introduced in India. I enrolled in the course right away and in September 2004, was in the first group of Indian CERTIFIED FINANCIAL PLANNER professionals.

This changed my whole career. I transformed from a stock broker to a wealth manager and I spent time with clients discussing more complex matters, such as discipline in investing, asset allocation and diversification, etc. I finally found a career in which I was content and this is still the case today.

Through my years of experience, I’ve learned that wealth management isn’t about calculations in a spreadsheet, but understanding the philosophical and psychological reasons behind a problem and then helping people to overcome their financial problems to reach their goals.

I would like to share a few experiences that demonstrate how fulfilling it is to be a financial planner. 

The Overly Generous Widow

A 45-year-old widow who had a 20-year-old son came to visit me. She was partner in her husband’s business and wanted to retire in 5 years. She had savings of Rs. 55 lakhs in bank funds, mutual funds, and shares. Her son was adamant to go to the US to enroll in a course that cost around Rs. 50 lakhs. She was willing to sacrifice all her savings for her son’s education, because in India parents take responsibility for their childrens’ educations and marriages. She was unsure how to manage her finances which is why she needed the help of a financial planner.

My advice to her was to tell her son to work in India for 4 or 5 years to gain work experience and earn money so that he could finance his overseas education. This would secure her money for retirement. I also suggested that she try to convince her son to complete his MBA in India, which would be more cost effective, since she could receive an education loan and keep most of her savings.

Initially, she was not pleased with my recommendations but I continued to explain to her that she needed to look out for herself, as well as her son, and that she didn’t have an alternative to secure her retirement. Eventually, she agreed that her future was at stake and accepted my advice.

The Optimistic Business Owner

A couple in their 30’s came to visit me one day. They had two daughters, ages 10 and 12, and the husband owned a small business. He dreamt of earning big money and borrowed heavily to invest in his business, as well as the stock market. Unfortunately, he did not succeed and was stuck with a lot of debt. In fact, his debt was so much that it would take him 30 years to pay off at the level of income he had.

My first recommendation was to find a cheap life insurance plan that would help his family maintain their standard of living, while still allowing him to pay off his debt.

He felt the next most important priority was saving money for his daughters’ marriage; this is a typical Indian mindset. I agreed that weddings are important to celebrate, but they are not the most important, especially when one cannot afford them. So, I suggested saving for his daughters’ educations rather than their marriages, explaining that if his daughters were educated, then, all other things would fall into place.

The next dilemma was his and his wife’s retirement. His income could hardly cover his expenses, so how could he save and invest for retirement?

I recommended concentrating on his business and taking a part-time MBA course to help him expand his business and increase his income. If he could successfully grow his business, his retirement issues would be solved and he could eventually hand his business over to someone else. It was an aggressive strategy that required willpower and self motivation but I reassured him that I would be there as a friend, philosopher, and guide to support him.

He appreciated my advice to save money for his daughters’ educations and promised that he would focus all his energy on making his business more successful. Even though this man’s problems were financially-related, the solutions were psychological.

In both of these scenarios, it felt very satisfying to help people achieve their goals and that is why I am a financial planner.

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