March 12, 2012

Are Financial Planners in India shooting at each others feet?

Sadique Neelgund

Some years back when I put my foot into financial planning in India and was toying with the idea of charging customers for it, I began scouring the internet for websites to check on the charges which financial planners were levying.

I was elated to see that I was in a thriving business. I clearly saw big names quoting Rs 15,000 on the minimum and some going as high as Rs 25,000 for a comprehensive financial plan. And it was all on the net for everyone to see.

I reached out to financial planners who did not have a website and was glad to note that there were some who even charged depending on what corpus investor’s had. I was grinning from ear to ear – I thought I had struck gold by being in a profession where out of a billion people, only a handful of CFP Practitioners existed.

Cut to the present. Most of the online websites now quote a paltry sub Rs 15,000 cost for a comprehensive financial plan. One online planning website has shockingly brought it down to Rs 2,500.

And so I thought, it’s time to vent my frustration at a platform where others can join me to vomit their grief and sorrow while others can give me a boot and say, “Nah, you are wrong. This is a thriving business”.

So what went wrong?

Simply put it, I think there are two critical reasons for this.

The first is one which everyone knows of – in our country, no one wants to pay for services like financial advice – investors think that free advice is already aplenty at banks, insurance branches, brokerage houses and right in their drawing rooms at the click of a TV remote. Investors are reluctant to pay for “advice”.

Secondly, I think the price of the plans some years back was over-priced – in that sense they were high costs for a nascent industry. And it is common knowledge that anything that is premature in time for absorption does not kick off well.

I know for sure that a lot of the big financial planners walked into corporates doing presentations on what services they were offering. I participated in some of them. The average selling price of the plans was Rs 30,000! Well, IT chaps might have huge earnings, but they are the same old Indians who think that Rakesh Jhunjhunwala can be reached from their drawing rooms for advice!

As a result of this pricing model, the footfalls from investors were less compared to what the planners’ anticipated. Like a pure demand and supply scenario, the prices of financial plans came crashing down. I use the word crashing – if I cannot use that word for a plan costing 2,500/-, then tell me differently.

But we all have mouths to feed back at home and in an attempt to keep the bottom line trickling, most of the CFPs began to reduce their selling price.

The average financial planner, save the big one, has now corrected his price but still the footfalls haven’t increased drastically. Today the average price of a financial plan is Rs 15,000 or less – note that there are financial planners charging more than this but their numbers are less.

And this is what is scaring.

All we Certified Financial Planners in India, in an attempt to overdo each other and get customers quickly, have brought down our very own earnings. In a sense, we have set the expectations for the average investor that the cost of a financial plan is inexpensive, if not cheap.

But in this war, where are we headed? After having spent an average Rs 30,000 in education, innumerable hours in classroom studies, an odd Rs 15,000 in exams to get this coveted CFP certification, we want to go as low as Rs 2,500 or Rs 5,000 to sell a financial plan?

Are we not shooting each other in our foot just to get customers? I think it is time that CFP Practitioners honestly ask themselves whether their charges are in line with the value they are offering. And if CFPs think that the plans can cost less while they keep earning through distribution of financial products, then that is even more scarier as commission on products are anyway headed for the gutter.

The current costs are not sustainable in the long run. The number of hours a CFP spends on a plan is huge compared to the cost he is charging today. And investors who bargain, will do it even if the plan is free!

I don’t know where we are going but I know that after some years the cost of a financial plan has to be more than that of a Nike Sport shoe!

Radhey Sharma is founder of TheWealthWisher Financial Planners. He blogs on personal finance at


Authored by,

Radhey Sharma

Certified Financial Planner
The WealthWisher Financial Planners

64 Thoughts to “Are Financial Planners in India shooting at each others feet?”

  1. If possible pls disclose the orgn or website who is doing the same as we can have an idea what they are providing @ 2500/-

    • The point is not that what they are offering at Rs 2500/-. The point is it came down from Rs 15,000 to Rs 2,500/-.
      Even if they began offering less in the current plan, the point is that costs for financial plans have come down in the past few years and even then investors are not buying !

  2. jaganmohanrao.ganti says:

    Dear Radhey Sharmaji,
    You are absolutely right and it is an undercurrent feeling among the practising financial planners that where the profession is heading. Even if a planner wants to grab the business by offering the services at a price as low as Rs.2500/-, and if he is a genuine planner, how many plans he will be able to do in a year and certainly quality will be eroded. But, as you rightly said, Indian customers chase such people only for low cost.
    There should be an association for all financial planners or any such forum where all the practicing financial planners will be members(including institutions) and minimum bench mark fee should be decided and the decided amount should be the minimum amount to be charged. Even though, the idea seems to be difficult in implementation, some thing should be done. Otherwise, no new persons will be willing to pursue the CFP course since, tax filing services will be fetching more when compared to a fee of Rs.2500/-.
    It is my earnest request for all planners to give serious thought on the issue for the future of the profession.

    • I am all for a fixed range of costs but there always will be people who will be exceptions – after all this is a business and everyone can offer things cheap to attract customers.

      I might be wrong but we cannot simply define a range ourselves on the cost – FPSB India won’t allow that.

  3. WELL SAID .!!! You charge what your worth is !! Hence it is essential to maintain a standard for your own self so that the qualification too is not degraded and level is maintained.

    • I still don’t know how to tell the client about that worth !

      In a country where investors wants things free, how do you tell someone what your worth is and that he should pay more as your worth is more ? The client just does not understand it !

  4. Market is Nascent. You will have to have a sitting explaining the kickbacks or commissions involved in by the agents selling their products which are product centric or company centric.. NOT client focused. I agree it takes time.. but work slowly and systematically.. and results will flow. The investors are not paying “more” as you say as in the long run, they are benefiting as the fees paid is much less than what he would have lost with wrong decisions.

  5. Have props or charts or tables which explain this in a simple way.. it works wonders.

  6. Hi Radhey,
    I agree with you.
    I think biggest reason for Fees of Rs 2500 is that there is no standard definition of Financial Planning. So you can show a donkey & tell that this is a lion. 🙂
    Fees at top end can be different depending on the expertise of planners.

    • But the expertise of planners has no bearing on the client – he cares less about our expertise. He sees someone offering a plan for 5k and another for 15k – where will he go ?

      Also, decent financial planners are anyway charging as less as 5k which tells the client that quality is coming cheap – that is my grouse – we are shooting each other 🙂

      • Hi Radhey,
        Be frank there can never be standardization of fees in financial planning services.
        I am sharing a reply that I wrote to a prospective client who was comparing my fees
        “Financial Planning is a profession where planners charge according to their competence & experience – its not a commodity where prices can be equal. Professional like Doctors with same MBBS degree charge different fees for same operation – one lawyer can charge Rs 1 lakh for 10 mins & other can work for 1 month for the same amount. Similarly you can compare things in other profession like architects & CAs.”
        Last week I charged Rs 1500 from one NRI to answer one tax query so I am not sure what people can provide in Rs 2500 Plan.

        • Hi Hemant,

          My question to you, is can we really compare ourselves with the MBBS Doctors and their advice, now with the advent of media and the technology, you get so many details on the click of the button, where as in the medical fraternity people dont compare or rather blindly go and take the prescriptions, bcos the medicines benefit and the past track record or the companies which produce are not compared,
          And even the big financial brokerage house are giving the financial plan at a lower cost.

          • Hi Harish,
            If we talk about education – doctors are far ahead but if you are in practice with couple of years of experience, things can be compared. And I believe planners may find an upper hand if we talk about the role we play in life of an individual.
            If you are talking about click of the button – that is just information & not knowledge.
            Recently someone questioned on survival of Financial Planner on my blog. I replied:
            [Who needs me “I think almost everyone” – can someone or some technology will replace me “I don’t think so”. (Here ‘me’ stands for a financial planner) So don’t be worried about our survival.]
            Hope you will agree with me.

  7. Sreekant says:

    As with other things, when supply exceeds demand, prices do crash keeping with the basic law of economics. Financial planning as a concept looks to be ahead of time, especially outside Mumbai, Bangalore and may be Delhi. But the model followed by the board ensured that thousands were enrolled for the course based on wrong expectations and false implicit promises.

    And unfortunately the charter members too have a conflict of interest when it comes to promoting CFP certification. Why would they want only the right products to be sold and why should they promote a profession that would trash most of the products in the market today?

    Pricing cannot be standardized and will have to depend on the many obvious factors. But think from the clients angle: Why would he pay 30000 for a plan that has n assumptions and also has a disclaimer that nothing is guaranteed. They can choose the level of detailing and hand holding.

  8. Hello Radhey

    I think this is a very important topic and there is a need for healthy discussion around this. I would like to put forward my views on this:

    1. People who are offering financial planning for Rs. 2,500 and Rs. 5,000 are not doing well (as much as I am aware through various sources). First they are not getting enough numbers and second most of them are online software driven model where consumers don’t get a proper handholding for Do-it-yourselfers. So the end result is “something happened… but nothing effective happened”

    2. In the long run… it would be good to deal with a limited clientele offering financial life planning services and charging on First time fee + AUM basis and maintaining very long term relations. This is my personal view based on established models I have studied in developed countries.

    3. If we want to give real good service… we cannot be earning less than 10-50 thousand per year from each client. And have at least around 200 clients. We have to rigorously work on increasing efficiency. Right now we as a community are not tech savvy and even the required knowledge level is very low (including mine )

    4. We as a community are undergoing a price discovery process and this will settle down with time. People offering for cheap will not survive. And consumers buying 2500/5000 plans will come to quality planners after they realize nothing much happened after going thru that process.

    5. We have to realize that financial planning is less about the “financial plan” and more about the “financial planner”. How many people will actually do the workouts if we keep the gym equipments and keep the how-to manuals in front of them. The instructor who is a coach, a guide and a motivator plays a very important role.

    Keep doing the good work and have a survival strategy for next 2-5 years. Things will fall in place and good planners will stand out. Thanks again for sharing your thoughts.

    • Sadique –

      What you have voiced is very true. Less clients with a decent charge is going to lead to client satisfaction. Otherwise, we will simply be playing with numbers leading to degradation of the service.

      I think the current gathering of planners that you have spear headed should be used to discuss this.

      Maybe a topic for your next workshop ?

  9. Soubhagya says:

    Completely agree.. Thanks to the author, you have correctly catch the point here, even I have the same anger and wanted to vomit it out. I can proudly say that my charges are above the average and nowhere I compromise it.

    My message to those Planners who are charging less for a financial plan say 2500-5000

    1. You are degrading value of the profession.
    2. You are taking Financial Planning profession as a side business .
    3. Keeping the charge very low means clear indication of accruing client so that you can cross sell some in-house product (Right example of conflict of interest).
    4. You do not realize your value as a Financial Planner.


  10. nandishdesai says:

    Asking for higher fees is always about courage, it is about making big promises and than delivering on those promises.I would request all planners to stay strong with your fees, but be sure to DEMONSTRATE how powerful your advice is. Blow some minds. Change some financial lives. That’s how you grow your practice. Gather testimonials that are inspiring, let people broadcast about your advice…….Do not get into such discussions where “who is charging what”, only focus on what value you are providing and what you are going to charge for your services

  11. vishal shah says:

    I had same feeling what Mr Radhey is talking about. But……………………
    After meeting many people across India, I feel that people are still not interested in software driven model.
    They are having expectation what they are expecting from their personal Doctor, CA or Lawyer. They also want to pay for that same (Time, Respect and Fees) , what they are giving to other professional..
    Now need is to make our business more professional.

  12. Hi Radhey,
    It’s really a serious area. Who’ll justify my remuneration? First of all, consider the quality of your plan, it’s very much subjective and you are not only doing it but also help your client to achieve it. You have to engage quality of time for your client, not quantity. For quality you need to a “master minded”. If someone does by Rs. 2500 ok, let him/her comfortable with the same. Today or tomorrow it’ll happen someone will charge Rs. 2500 and someone may charge Rs. 35000. Consider the quality. All doctors charge identical consultation fees! Your work will justify your fees, but if you are not properly compensated you can’t give impartial solution. In future we can experience many adverse/unhealthy situations. In my mind, I’ll not compromise; I’ll work for my clients with 100% dedication and hope to be compensated properly by my clients. Matter is how rich our solutions are, our clients should be benefitted and we’ll be compensated properly. Financial planning is not like an ornament; it should work for our clients. I’m in doubt how long they’ll survive those who are charging Rs. 2500/Rs. 5000. But temporarily they are harmful as they can’t control the market but may confuse.

    “I walk slowly, but I never walk backward.” – Abraham Lincoln

    To conclude, I must say -being a professional I’ll write my cheque. I’ll fix my remuneration. I’ll not compromise with my quality of work. I’ll stick, maybe it’ll be painful for the time being but in the long run we’ll be winners. We must be united and raise voice against any mal practices.

  13. Sanjay Dixit says:

    Hi Radhey,

    In financial planning profession standardization will be difficult to achieve. If a client has only one goal and only seeks advice about appropriate asset allocation then low fees is also justifiable. Scope of work to be done by planner and value perceived by client can decide the fee. Even same planner can charge different fees from different clients depending on scope of work.


    • Analyst says:

      I will again reiterate, I am not a CFP. Though I am looking at taking up this profession and what has transpired in between all these communications scares me. If the prospective client is not willing to pay up, who will want to accept this profession. Unfortunately FPSB does not set any restrictions on who should appear for this certification. My point is that insurance advsiors, wealth advisors, any one who is selling a product should not be allowed to take up this profession. Do Doctors sell products (may be a few do)? They offer their skills. That’s what a CFP should do. Offer his skills/ consultancy and only charge for that and that should be the USP.

      We are unbiased, we don’t sell products, we don’t fool take the client for a ride. Once this disticntion is established, then this profession will be worth taking up.

      • Don’t quite agree here. You don’t have to be scared – jo darr gaya, woh mar gaya.

        Rather take these as input and decide where you want to go in life with FP services. It is still one of the best coveted certifications to have in the financial sector and nothing beats its competitiveness and worth.

  14. Dear friends,

    I think ‘how much fees’ question is over blown. Instead, one should be asking ‘how much value I am adding to the client’s situation’ and then ask for the right remuneration. I am more than sure no client would hesitate to pay the charges, whatever quantum they may be, if they see value. There are many methods through which a client would pay for the services, planning fee being one of them. In the beginning for many clients we did financial planning for free because we had other streams of income from the clients (we are not fee only financial planners though if a client wants we are willing to provide financial planning for fee with no strings attached) and they were not aware of true value of a financial plan. Today, we have no problem is charging the same client separately for financial planning.

    CFPs seeking a career in financial planning must understand that this profession is a long gestation profession and it takes several years or may be a decade to build a remunerative practice. One should have passion, patience and staying power if they would like to do well in this profession.

    Procyon Financial Planners Pvt Ltd

    • Narendra,

      How would you tell a client what better you are offering that a peer planner ? How will a client, how has no clue on FP, buy the argument ? Isn’t the peer planner also dishing out the very same gyaan that most of us are ?

      • Radhey Sharma,

        I think you are totally missing the point. Financial Planning is not such a mature profession in India that you have too many peers and benchmarks to follow. You have FPSB process as a reference point to start with. Sticking to that standard (actually gold standard) would be a good beginning. As regards convincing the client is concerned, firstly, please note, you are not arguing with your prospect. You are presenting your case. If she is not aware of financial planning process, you actually have an upper hand. A virgin mind is more adaptable. If she is already aware of financial planning process, you can definitely lean on FPSB process to explain to her the advantages of working with a CFP. If she is already in touch with many CFPs for her need (a remote possibility yet), then less experienced would obviously lose out in general. But really you do not have to presume that way. I have seen that many CFPs are actually not very keen to offer a written plan (it is their business model). So if you are the one to offer a written financial plan, definitely you have an advantage.

        A gentle suggestion; kindly do not speak of existing CFPs in such a condescending manner. A CFP is not mandated to be charitable with her successors nor is she obliged not to compete in the market whichever way she feels it right. You need to learn how to face competition and still make a mark for yourself.

        I can see clear frustration in the young CFPs when they actually get in to the profession. Earlier it was a case of comparing the CFPs to doctors, CAs, CFAs and so on. This self-aggrandisement has hit a barrier it appears. Blaming FPSB used to be a great time pass activity once up on a time. Now it looks like the turn of senior CFPs. Next what? The list is already exhausted. If a would-be or young-in-profession CFP starts blaming the prospective client as well, it would be better if she checks her assumption about her business model once again. It appears every one else is at fault other than herself.

        I wish to end my conversation with a down-to-earth suggestion that even a CFP service has to be marketed and sold. A would-be practitioner must develop marketing, selling and communication skills in order to compete in the market. Good luck.

        • I agree it is easier to talk to someone who is fresh and impress upon them the benefits of FP.

          Like every service, this service, as you say has to be marketed as well. And if young CFPs are getting frustrated, then they will lose the battle in the long run.

          I did not speak of existing CFPs in a condescending manner – in fact, I don’t miss a chance to collaborate with them and learn – I am one who learns from the best and in this industry, the more time a persons spends, the more he learns. So apologies, if you inferred that I meant that, I did not.

  15. Suresh Sadagopan on Linkedin commented;

    I don’t think so. I think each one of them have their own offering, the audience to service and the price point at which they want to peg their services. This is similar to what is happening in every other area. There is a huge market out to be tapped for financial planning. The market is admittedly nascent and we need to get out there and impress upon the audience about the need for financial planning. We need not tread on each others toes at all. We should focus on expanding the pie rather than being focused on pet categories like HNIs.

  16. Ganesh Padmanabhan on Linkedin commented;

    If the Financial Planners profession is really growing so that it can send feelers to competitors, then it should be really a good sign for the community. But underselling oneself is also a matter of concern, if planners does not work in fiduciary capacity. Charging Rs.2500/- is as good as charging no fees. But the profession itself is taking shape gradually and is at its infancy, where recognition among the consumers are slowly picking up, one as a professional cannot term that as a fees while working with knowledge and integrity. The opportunity is also good where professional fees for a financial plan has to be much more substantial, given the scenario that there is lack of awareness among financial consumers, and low competence level among financial planners.

    If at all it is offered for such a low fee in the good interest of the client, it should be a complimentary service for the client, who may certainly value the plan to the worth of such fees charged.

  17. Abhishek Somani on Facebook commented;

    FP service is not a commodity wherein the business will go to the lowest bidder. e.g.- There are shirts available in market for Rs. 200 and there are shirts available for Rs. 2000. They are not competitors of each other as a customer of either 1 will rarely buy another. So, low cost FP services worth Rs. 2500 are actually the need of the hour. Otherwise how will we cater the vast lower middle and middle class. But it is important to target it at specific segment, thereby increasing the market size.

  18. Prakash Praharaj on Facebook commented;

    It is really unfortunate that CFPs are acting otherwise than what their professional conduct requires.In public domain, all speak and write about trustworthiness,reliability etc which they should not forget Or else how do we claim that we are different than others.

  19. Ashish Bhave on Facebook commented;

    The market is still to reach maturity and there is a requirement of lacs of financial planners in India. i don’t see any competition in this segment actually we have to help each other to build up the practice. Every body has a place and his own space in this field.

  20. piyushkhatri says:

    I don’t know who is offering financial plan in 2500 bucks but i know one thing that financial planning market in india is still undiscovered. Most of you works in metros and big cities i am working in a industrial area near by a small city. When i delivered my first project to client i asked him did you know about financial planner before you met me? He said no i didn’t. When customer don’t even have the knowledge of product how can you say financial planners are thriving for customers. I think we should not see what other is offering we should try to make client future better cause most of us are independent financial planner. Its better to meet for helping fellow financial planners but not to cultivate others business strategy. Finally client is mature enough to compare between good or bad. Thanx

  21. Partha Sarathi Datta on facebook commented;

    I think offering FP at such low cost is not a comprehensive one. If so, quality should be an issue or else, linked with a huge sale transaction. In either case, it goes against the basic approach of treating a persons from a holistic angle. So, far FP is concerned it can not be anything other than comprehensive.

  22. jayaramanpillai says:

    Dear Mr. Radhey Sharma,

    On the outset, let me thank you for this wonderful article.. it truly catches the essence of the current scenario on a broad prospective.. and the following discussion are too an eye opener.. if i may add on to this discussion..

    1) The core discussion points about the pricing model and the demand supply gap is a variable perception.. what i mean is that we cannot assume a DM theory in this because we are a billion + population and ” Practicing CFP’s” are less than 200.. so its a huge equation to look at..
    2) The pricing is the end result of Positioning + services in a brad basis, so its very much arguable as to whats the correct pricing.. as Mr.Hemant pointed out, its can be assumed as a lawyer fee range.. but are these the real reasons??

    when we look at the issue in details there are much more deeper issues which are propping up.. one of them is the marketing of the service itself.. i have searched the Indian space for some directions on financial planning but i am sorry to say that the quality of presentation including the quality of website has a long way to go when we compare our western peers from UK or US.. I am sure that you might agree with me that India being a global economy, we are fast dwelling into the global standards of living even t the last minute details as fruits and daily use products.. why there should be an exemption for some thing as exclusive as FP? maybe this is where, the bank RM’s and Top end MF are making a difference.. The quality of presentation..

    i have been part of the corporate world for the last 8 years , growing from a mid level to a senior level and i have personally sen the conversion rations vis a vis the presentation quality.. and this does makes a difference..!!

    My humble opinion is that, if we can present our self in accordance to the target audience, there lies the key to conversion and pricing.. and i completely agree with your model of positioning- membership fee + AUM fees, in fact i am following a variation of that and the initial response has ben encouraging..

    Last thing i would like to add is that there is no way anyone can co ordinate a price correction especially on a higher level.. market corrects itself in a downward spiral.. its natural.. however, i feel that over the years, the pricing will definitely differentiate the key players with a rough equivalent of branding, like in Louis Philipe vs other brands or a Merc vs ABC.. and thats where we decide where we position our self..

    There will still be players pricing at 2500, or even 1000 but that doesn’t and should not make a difference to quality players who will continue their pricing models and be successful..

    Progressive pricing would make a huge difference, where we increase the price every passing year, where clients appreciate the value addition they are getting.. this is going to be the best method to sustain the long term profitability of our business. because if we are talking long term and quality to our clients, then we should be willing to grow with them and also improve our pricing as the year progresses..

    Once again, thank u so much for each and everyone who have penned down their valuable thoughts in here,, its been a real pleasure to learn from such dignified minds..

    Looking forward for this space for more information.. and thanks again to Network FP for this wonderful initiative..!!

    • Dear Jayaraman,
      Your response could be an article itself. 🙂 I agree with you the our presentation is poor. Be it our website or our in person presentation to the client, the initial impressions needs to be more long lasting and it can make a difference. We probably need to improve upon that.

      Agreed also on the fact that price correction is auto driven by the market, we cannot agree to a charge that everyone says Yes to.
      Many thanks for your contribution.

  23. Srinivasan TS says:

    I would like to look at the issues being raised in the following manner.
    1. There is a tendency to “commoditize” an offering or Service just to pump up the volume.
    2. This normally happens where the concerned Company or People have surplus capacity in terms of people not being utilized for their services or want to make money out of “Templates” which were created as part of the Financial Planning Tools.
    3. Do it yourself kits or Template Version of Creating Financial Plans will address to those segment who want it cheap and not rely on the “Wisdom” & experience of the Planners in this case a CFP or a Practicing Financial Planner who is adhering to Standards.
    4. While this could be an irritant (Low Pricing) or shooting at the feet, we in our country and place of Practice are addressing a Vast & Diversified Target Segment where we can position ourselves based on the Niche created.
    5. The bottom-line is, anything or anyone not appreciating your time or the efforts you put in Creating a Financial Plan and use your Wisdom to translate & execute the Goals Based plans is not worth your attention!( though there may be some short term pains!)
    Srinivasan TS-CFP
    WealMan Associates- Bangalore

  24. @Srinivasan thanks for sharing your thought. Let us think and analyse….

  25. Dear Radhey Sharma,

    I am not surprised that you are using the platform for venting your frustration and asking others as well for common group vomit. I am not surprised that you are comparing financial plan with a pair of Nike shoe and again I am not surprise that you are doing cost benefit analysis on the basis of fees you paid for examination.

    I am not surprised because years ago I have seen people talking ” Ohhhh Nano is coming ‘Lakhtakiya Car’, sales of Indica, Safari, Corolla and others car will come down”.

    But I am surprised: You are asking people to correct you by saying so called “Nah, you are wrong”?, why don’t you do some well suited positioning of your financial planning services?, why you are failing to find the right client segment for your planning services? If you are finding the right client segment then how can they compare your services by Rs. 2500 worth service?

    Vikas Agrawal
    78992 89079

    • That’s quite a strong hearted statement but that is what democracy is all about. Before we start a full blown war, it’s wise to pause and probably answer the questions you raised yourself so that it helps everyone here. No one is a guru, everyone is learning, I did not say “I am failing…” – so more answers and less questions will help, honestly.

      • Dear Radhey,

        Generally, questions are more powerful than answers as they make you think…! Again if you are not failing then I don’t see any point of frustration, especially from your side.

        As far industry is concerned, let me clear it that in a market place many forces & offerings exist and they all have their target segment.

        As you are asking my honest answer, I will request you not to pour the profession by frustration and silly comparisons. If you are really worried about industry’s prospect then take the lead and please show some benchmark practice that one can proud of……and finally ……LET THE THINGS GROW, TIME AND MARKET SHAPE ALMOST EVERYTHING……..!!!

  26. Roshni Nayak says:

    From what i have observed in the last 2 years, many practicing CFPs who have made a name
    for themselves command fees with confidence and pride. This is because they have the conviction
    in offering the best serves with a client-centric approach. Their goodwill has spread by word of mouth
    and that is how more customers approach them.

    Forget the fee structure part, the main challenge the CFP profession in India is still facing is a lack of awareness among people. The financial planning market is at a very nascent stage in India and all aspiring and practicing CFPs have a huge task ahead to increase awareness among people and help them differentiate a CFP from an insurance agent/wealth manager/relationship manager/financial advsior.

    Many of my highly educated friends who are CFAs and MBAs did not know what certification i was pursuing a year back. We still have a long way to go…You are right Radheji, everyone is
    learning…Thanks all for sharing opinions, I am learning too.

  27. Manish Jain says:

    It seems like only a month or two ago, everyone was happy that price discovery of financial planning services was occurring mainly because the price was around Rs. 15,000.

    Now, that some players have come in with a low price of Rs. 2,500 for financial planning everyone is all up in arms and even commenting about the “future of financial planning in India”.

    I would assume a low cost product is great because it builds the awareness of the entire field. As people start to use these lower cost services some may eventually migrate to more in depth services that cost more because the level of advice they need is much more. As they say, you get what you pay for.

    • Analyst says:

      Well let me all of you guys a question. How many of you were working before giving up your job and taking up CFP as a full time profession? How many of you were earning a CTC in excess of 10 Lakhs p.a. and how many of you got that kind of remuneration in the first year itself.
      CFP is not a brokerage profession nor an insurance business, where you have targets to achieve and by hook or crook they get achieved. Many prospects call you and everything goes on fine and suddenly the prospect turns cold.
      If servcies are offered as a low for Rs 1500 or Rs 2500, then you need a steady flow of clients (probably 50 per month) to make a decent standard of living. If you charge let’s say Rs 30000 per plan they probably three or four per month are sufficient.
      I have worked with brokerage houses, insurance companies, investment banks and I know the kind of misselling that goes on and also the kind of depth these entities have. Clients get swindled, saddled with wrong policies and overall its a loss making proposition for them. All these brokerage houses have jumped into the band wagon so that they can convert their existing client base and fleece more money from them. Client’s well being is not what they have at the top of their minds. They might create awareness about the profession, but would rather do more harm then good.

  28. Rahul Damani says:

    I will fully agree with Mr. Sadique that a good Financial Planner is more important than the Financial Plan in itself, for a client. A financial planner should be like a family doctor to the client, and I don’t think a client would switch over to another planner because he’s charging lesser fees.
    Having said that, I firmly believe all the big business house / banks can’t give a complete personalized service that an individual planner can give. Moreover the employees have to meet its targets and deadlines which would always lead to mis-selling their lack of continuity of service in one place for long, there won’t be any accountability as well.

  29. laazarus dias says:

    I am not a CFP though I was the 1st to enroll for the CFP. I train financial advisors in major aspects of their business. After going through the comments made by our good friends I feel that there is a identity crisis which is faced by the community of Financial Planners. This is often the 1st phase of any indusrty or movement and thus is not out of place. The major concern is that the CFP does not become a practicioner once he clears the exams which is unknown to many. The CFP Exams only certifies that you have now acquired the technical expertise to practice a profession. Becoming a professional is a different ballgame all together and actually starts after you have completed your exams. The curriculam of CFP is more academic in nature and does not automatically make you an entrepreneur. To become an Entrepreneur you need to have a vision, mission statement. You will need to have a business Plan, a Marketing Plan and a positioning in place. You need to make a SWOT Analysis and design your USP within the Financial Planning area. The External world is a reflection of your internal thought process. Watch your thoughts – they become words, watch your words they become actions, watch your actions they become your habits, watch your habits they become your character and finally watch your Character as it becomes your Destiny. Our Thoughts decide our destiny and our thoughts are created by our Belief Systems. I am not being Philosophical but I think the correction needs to be attacked at a deeper level of your consiousness. If one starts a business without a Business philosophy then there is surely going to be trouble down the road. I think that a CFP will have to look at his practce from a business perspective and all thsoe CFP’s who have a thriving practice are running their practice lkie a business. Who charges what is not material, though it does make some short term ripples but if we continue with vigour and energy we shall OVERCOME. I think that we should have a clear PURPOSE for being a CFP. I have found absence of Purpose the major stumbling block irrespective whether you are a CFP, Financial advisor or even a Doctor for that matter. Things dont always work the way we plan but if we have a Business Plan in place eventually we will be able to steer ouselves well

  30. Sukhvinder Sidhu says:

    Thanks to all, for this hot and healthy discussion!

    Its real good stuff for a person like me who is just entering this profession.

  31. Sukhvinder Sidhu says:

    @ Laazarus,
    Thanks for giving facts to young persons who want to be CFP and enter this profession, and other valuable inputs to those who are in their initial practice stage.

    Some part of your writing makes feel that its very tough. I do understand what you say about PURPOSE and VISION. But making whole lot of Business Plan, SWO Analysis seems to be a lengthy process.

    I feel that we are here more because of our PASSION for improving financial lives of our clients than anything else. We do need to have some caution like alternate cash flows for initial years. Having attained CFP certification, we just need to jump into the field with a model, persevere and work honestly for clients, and then remuneration will come on its own.

    I am in my VRS notice period, and some of my colleagues in the secured job are worried about my future income in FP. But I am not worried as it is a call of my soul to enter the field. Moreover we have “FPSB process as a reference point to start with” as said by Narendra, success of this profession in developed countries to get motivation from, the very ethical sense of FP, ample guidance from pioneers and FPSB.

    Although it may be too early for me, I say to my friends who want to establish themselves in FP profession to remain utmost optimistic. My school Principal had said in Assembly, “Never run after money, live such a life money runs after you.” Its also said in Gita, “Karm kiye jao fal ki ichha mut karo”.

    What I want to add to above discussion is that initially we need to:
    1) set a decent fee (to maintain that our Plan has Value),
    2) give good ‘initial period discount’ (as fees is there not only for the Plan but also for the Trust of the client that is required but not present initially)
    3) prove to the clients the Value in Plans for them, so that we get more clients by word of mouth and the right to increase fees.

    Best of Luck to All, and wish the same for me!

  32. Hitesh Vyas says:

    It is long…..thought provoking topic and discussion.

    I believe every one has there business model or should establish it. Play as per set rules. At the end it should grow.

    Financial planning is, indeed, a decent – noble professioin and it should grow. There is a sense of WIN-WIN in this profession. One can act honestly.. and earn as per business model.

    * Quality of presentaion matters a lot!

  33. Chenthil Iyer on Linkedin commented;

    The fee charged by any professional is a personal choice. However the worry is about the perception it may transfer to a prospective client regarding the following:

    1) The quality of service and the possible hidden costs
    2) The knowledge and application
    3) Sustainability/Continuity of service
    4) Commitment to profession
    5) The margin with respect to competition

    But the most important aspect which I believe that makes a prospective client to write a cheque in your name is the degree of comfort and dependability that you convey to him. You only have one chance to get this done!

    Points no. 1 and 3 are so much interconnected because more the fee, lesser the number of clients and therefore higher quality of service and time availability but with extremely low fees, one has to procure too many clients to sustain in business which might hinder the quality of engagement. However, the question is whether the individual is depending on the commission income when he is charging a very low fee. If there is a dependency there is a high possibility of his advice becoming biased.

  34. Abhishek Somani says:

    Consider following situation

    Sam is a 50 year old Director of a company. His annual income is Rs. 50 lakhs + perqs. His family consists of his wife and 2 children. His investments include a residential villa and 2 other properties, over diversified equity and MF portfolio and ESOP’s.

    Suzy is his 25 year old secretary. Her annual income is 5 lakh p.a. She is married but has no children and is not planning to have in near future. She and her husband have few thousands in Bank deposits and same in MF’s.

    Now, who of the above needs a Financial planner ? Sam, Suzy or BOTH ?

    The ans. obviously is BOTH. But there is a vast difference in scope of service that both of them need. And there will be vast difference in the amount of time that you will spend on Sam’s work and time spent on Suzy’s work. (probably 10 times)

    So If Sam is paying Rs. 25000 to his FP should Suzy not be paying Rs. 2500 ?? This way income earned for time spent on each of them will be more or less same.

    In its infancy everyone tries to get the highest paying client / customer. That’s how all business work. But over time as profession matures people start targeting wider range of customers ?

    Moreover it is in the interest of the profession that it reached a wide segment of population.

    India is growing …. list of millionaires is growing ……. people are getting salaries unheard of ever before …….. blah blah……. blah blah blah ……….. is all true. But population of Suzy’s is many times larger than Sam’s. Would it be advisable for anyone to spend one month’s income as Financial planning fee ?????

    So friends please don’t worry about who is offering what price. There is a strong need (not strong demand) of FP service at every price point. As commented in an earlier post price is anyways not the biggest influence r in selecting any service. Do you usually go to lowest charging doctor or Do you send your children to lowest charging tuition teacher in your area or do you go to the lowest charging barber to get a hair cut ??? OR would you prefer someone who you EXPECT would go a good job ?

    So Once again; PRICE IS NOT THE BIGGEST INFLUENCER IN SELECTING ANY SERVICE. TRUST IS. And many a times Trust is just a perception of How people think of you.

    So in all according to me Financial planners should

    1. Choose customer segments to work with and services to offer and price the service accordingly
    2. Concentrate on Building Customer trust

    And finally; for anyone who is looking to make a quick buck, This is not a profession for you.

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