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Traits of a Professional: Time for Financial Planners to Change

By Niraj Nanal, CFP

The dictionary meaning of the word professional is 1) of or belonging to a profession 2) doing something as a job rather than as a hobby and/or 3) competent. The meaning signifies many things about how a professional operates. In the normal course of life, we come across many professionals such as doctors, lawyers, chartered accountants etc.

Let’s take a look at what makes someone a professional.

Formal Education

If you have to become a doctor you have to study medicine for 4 years and even more if you want to do a specialization. If you want to become a chartered accountant, you have to pass several exams and do an internship for a few years before you are considered qualified.

For a financial advisor in India, the requirement of formal education is not seen as compulsory. Also, there is no gradation to differentiate between an agent and an advisor. Therefore, having a formal education, such as the CFP certification, is the first step towards taking a financial advisor to a professional level. I believe that regulators should also make formal education compulsory to be qualified as financial advisors.

Charging Fees

This is a common attribute when we think of professionals – they charge fees. If you go to any professional, whether it is a doctor or lawyer, they charge their clients fees for delivering their advice. It’s high time that we as financial planners start charging fees, assuming you don’t already. We expect regulators to intervene eventually and create regulations in India which will position financial planners differently and enable us to charge fees.

Unbiased Advice

We go to professionals because we believe that they work in our best interest. Providing unbiased advice is one of the most important things a financial planner can do to position themselves as a professional. We come across many professionals in the course of our day-to-day lives and the most important attribute they carry is trust. Trust differentiates professionals, period. Therefore, having an unbiased and independent business approach is very important for financial advisors to take our profession to the next level.

Value Addition

When you think of a professional in your life, you respect them and value their advice, in most cases. A professional commands a position of authority. When we go to a doctor, we usually listen to their advice; the same goes for a lawyer. Why is this? Because when you add value to an individual’s life and they truly feel that you are working in their interest, you can command respect and act in a position of authority.

When I look around, I see financial advisors not commanding the same kind of respect as other professionals. It is time for us to introspect and analyze how we can transform our client’s lives and make our profession a change catalyst for the society.

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