With globalisation and volatile markets, it is not always possible for an individual to keep track of his finances — like has he saved enough to buy a car or a house, has he figured out how to pay for his child’s education or would he be able to afford medical care for the elderlyIJ In such situations services of a financial planner come in handy. Those looking for a new career path, opportunities  in this field are aplenty and pay packages lucrative, says Suman Chakrvarty

Strictly speaking, a person doesn’t need the services of a financial advisor on a daily basis. But due to globalisation and the fact that markets are affected by policies and ups and downs in currency, it is almost impossible for an individual to keep track of all that is happening. Here, the services of a financial advisor come in handy.

So, who is a financial advisor (FA)IJ One who provides financial advice or guidance to customers for compensation is a financial advisor.They provide various services like investment management, income tax preparation and estate planning. They must carry the Series 65 licence in order to conduct business. A wide variety of licences are available for the services that a financial advisor can provide. FA, is in fact a generic term. There are many different types of financial professionals falling into this category. Stockbrokers, insurance agents, tax preparers, estate planners, bankers and financial planners are all members of this group.

When it comes to saving our money, we have choices. We can put it under the mattress or we can invest it. The experts usually suggest the latter. The job of the FAs is to help their clients to plan for their short and long term financial goals. These goals may include their own retirement and their children’s education expenses. He or she may provide investment, tax and insurance advise. While the primary part of the job involves advising clients, a great deal of time is spent getting more clients. To do this, FAs must be skilled networkers.

Most work in offices, but spent time outside the office attending conferences and teaching classes with the goal of attracting business also. About a quarter of FAs were self-employed. long hours are a reality. Most advisors work full-time, sometimes for long hours. Expect to work at weekends as well.

Skills required

FAs provide advice relating to investment strategies, mutual funds, bonds, and stocks, and their knowledge is more necessary than ever as baby boomers near retirement. Becoming a FA takes work, but it can be a rewarding experience. A financial planner needs a bachelor’s degree in accounting, finance or business. In-depth knowledge of useful and relevant topics obtained through education includes investments, estate planning, insurance, retirement planning and risk management.

Excellent math skills are necessary, along with the ability to calculate and analyse complex financial data. Accounting skills and a close familiarity with banking are necessary and broad knowledge of economics and financial markets are important when it comes to making recommendations to clients. Financial planning is service-oriented business, so good interpersonal skills are crucial to success. One must be good at communicating clearly with clients verbally and in writing, and be comfortable distilling complex topics into easy-to-understand summaries for clients who may not have a lot of knowledge in the areas in which they are seeking advice. Financial planners tend to look at the big picture when advising clients on important topics like how to manage their money, handle taxes and prepare for retirement. However, many planners find that specialised skills appeal to a broader range of clients.

They often become licenced to sell products like insurance, annuities, stocks and bonds, and make agreements with clients to directly invest their funds. In-depth knowledge of the law, particularly in areas such as estate laws and tax laws, is often useful in preparing a comprehensive long-term plan for clients. FAs should has good communication skills with good analysing power of market and ability to make client understand properly.

Job Opportunities

FAs and financial consultants (FC) are contemporary job titles for what used to be called a stockbroker, broker, account executive or registered representative. A variant spelling FA is also used sometimes. Role of financial planner is to make financial planning work for you. You are the focus of the financial planning process. As such, the results one gets from working with a financial planner are as much one’s responsibility as they are those of the planner. To achieve the best results from the financial planning engagement, one will need to be prepared to avoid some of the common mistakes.

Common mistakes

Most people don’t set measurable goals

Make a financial decision without understanding its affect on other financial issues

Confuse financial planning with investing

Neglect to re-evaluate their financial plan periodically

Think that financial planning is only for the wealthy

Think that financial planning is for when they get older

Think that financial planning is the same as retirement planning.

Wait for a money crisis

Expect unrealistic returns on investments

Think that using a financial planner means losing control

Believe that financial planning is primarily tax planning

Besides the common mistakes that individual make, the other problems that may not have the desired results are:

Assess current financial health by examining the assets, liabilities, income, insurance, taxes, investments and estate plan

Develop a realistic, comprehensive plan to meet one’s financial goals

By addressing financial weaknesses and building on financial strengths

Put plans into action and monitor its progress

Stay on track to meet changing goals — changing personal circumstances — changing stages of your life — changing products, markets and tax laws

Start planning as soon as you can.

Eligibility

A bachelor’s degree is expected for a financial advisor. Course work in finance, accounting and economics is helpful, though not required. Strong quantitative and analytic skills are vital. An MBA can give one a leg up in the hiring process, depending on the firm and the situation, as might legal studies or a law degree. In any case, compensation is tied strictly to performance. The duration of course is one year and two year (two and four semesters) course of financial planning diploma. Every financial institute has different fee structures according to financial planning course but they charge around `1 lakh per semester.

Remuneration

Financial advisor salaries are above average—median annual wages are ` 3.8 lakh per year, apart from bonus or incentives. However, as one gains experience and work status the pay package also increases.

Where to Study

The Indian Institute of Financial Planning, New Delhi

Institute of Chartered Financial Analyst of India, Dehradun

Institute of Financial Planning and Investment, Mumbai

Institute of Company Secretaries of India, New Delhi

Indian Institute of Capital Markets, Mumbai

BSE Training Institute, Mumbai

(The writer is founder, MD & CEO,Achiievers Equities ltd)