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Financial Planning in Brazil and the 10 Years Rule

By Martin Iglesias, CFP

Philipp E. Ross published in August 2006 a study in Scientific American named “The Expert Mind” which pointed out that to achieve a state of full expertise in a particular subject one needs 10 years of experience.

Before that, in 1993 the psychologist Anders Ericsson, wrote an article proposing the rule of 10,000 hours, stating that the stage of excellence can only be achieved after practicing a subject for a such number of hours.

These articles do not address the issue of collective knowledge, ie, how the interaction with more experienced people in a particular subject can help reduce this period or if an organization or association behaves the same way.

I mention this issue because 2013 is a very important year for personal finance in Brazil because IBPCF (the institute responsible for CFP certification in Brazil) completes its first 10 years of existence. Not only that, this year the number of CERTIFIED FINANCIAL PLANNER professionals in Brazil surpassed 1,000.

The importance of the date was emphasized at various opportunities, such as our last certification ceremony, which was attended by Noel Maye, FPSB’s CEO, or during the 4th Seminar of Personal Financial Planning which included the presence of major U.S. planners such as Deena Katz and Harold Evensky.

The personal financial planning industry in Brazil had its origins tightly related to the investment industry, primarily asset management, but has gradually loosened up its roots and begun to understand that more than just recommending portfolios, it is necessary to understand the individual, with his or her dreams, expectations and limitations. I often say that at the end of the day, personal finances are finances, but they are personal.

All this change in scope from assets to individuals is very important given the significant changes that have occurred in our country in recent years (as mentioned in my first article written on this blog).

Lastly, I’m quite happy to share that personal finance in Brazil is indeed achieving its maturity stage, just as the 10 years rule would predict.

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