September 10, 2013

We Need a National Level Powerful Body for Financial Planners / Advisors

Karthik Jhaveri

Friends, it is nice to see so many associations taking shape across the country. Congratulations to all of us for coming together. Superb movement!

On a local level there is much to gain for members of such bodies and associations; however on a larger level for all of us as an industry we need something larger. I feel we need something even more powerful and the need for this is well pronounced.

I believe we need to have an apex body and all such associations / federations / councils / societies etc as members of this body. By this practically all of us across the country will get well represented for the many larger issues we face and for which there is no definitive support from anywhere. What might be such larger issues? Here are some examples:

1.    Shop & Establishment Act

(This is the subject where the thought for this germinated.)

This event refers to Mumbai specifically: Last year the Bombay Municipal Corporation (BMC) wanted to go on a drive. This was a drive to find offenders under this act and then penalise them. BMC officials went door to door in many commercial buildings in South Mumbai. You were called an offender if you did not have your name written in Marathi outside your office and / or did not have a name board and / or did not have a shop & establishment licence etc. Summons were issued to everyone for appearing in court and everyone was fined heavily. Alternate was to fight a case against BMC but who has the time to do this. Recently I learnt that Financial Planning firms perhaps we do not fall under this act! I am still double & triple checking on this. Professionals like lawyers, CA’s doctors are out of this act. The Bar council filed a PIL in the high court and the honorable high court blasted BMC for this imposing this on law firms. That is the power of a large associations or a larger body. If we had a larger association of ourselves we could also consider protecting ourselves this way.

2.    Service Tax

I have mentioned this number of times on appropriate forums. When this was levied on distributors of mutual funds; not a single mutual fund came to the rescue of distributors. If they wanted they could have. This levy could have been passed onto customers just like other utilities and services we use. Unfortunately no one did anything and all distributors lost an eighth of their revenue. Lobbies are very powerful and we all know that. A powerful association at that point would have helped our cause had we filed a PIL in high court saying that our income has got affected adversely and service tax being an indirect tax should be levied on the end user and not the intermediary servicing the end user.

3.    Direct Plans

As a measure of investor’s empowerment it is a nice thing to have. About 20% of mutual fund investments appear to be direct investments. Naturally this is carved from the distributor’s pocket right? This affects livelihood of distributors. Then NAV’s are published separately and a level playing field no more exists. I am not sure of the possible alternatives here but I am sure that if there was a body then things could have been discussed to ensure that beneficial interest of distributors is protected as well. Let me give you an example: Why is it not possible to buy equity shares directly from the stock exchange and why must we go compulsorily to a stock broker? It is a similar situation, is it not? So why should purchase of mutual funds bypass the mutual fund broker? This is a question to ponder upon.

4.    Investment Adviser Regulations

This is another “live” area. There are so many contentions and there is so much confusion. There are both kinds of people amongst us; some of us for it, some not for it in totality. People are not sure how this is going to impact. But if the impact or enforcement is adverse are we prepared to put up our case at the appropriate forum? Do we have a forum that can appropriately represent the cause of an industry?

I want to get many of us thinking. We need a powerful body of ourselves, representing not just a few hundred but hundreds of thousands; as many of us as possible. Local associations that we are forming is good and will take a many years to gain recognition and many more years to get credibility similar to that enjoyed by entities like the BCAS (Bombay Chartered Accountant Society) or Bar Councils.


Authored by,

Kartik Jhaveri


Transcend Consulting (India) Pvt Ltd


36 Thoughts to “We Need a National Level Powerful Body for Financial Planners / Advisors”

  1. I agree with Karthik

    There are so many associations and bodies coming up , but it would be a great thing to have a central association, which can be the apex body. To go further, we can also have a main central theme or rules from apex body and then each member association can have their own internal rules. 

    There can be 1-2 representatives from each sub-associations and then we can have one yearly meet up of the central body where we can define the road map for the industry and what common actions we can take to help the industry ! 

    Others are requested to put their mind on this. This is such an interesting thing and need of the hour . 


  2. Dear Karitik

    Your point is completely valid. Let me know if you have any thoughts on how to move ahead. We can explore ways and means of achieving this. There are several regional bodies. They are doing wonderful work. Some of them have taken initiative of going beyound their local area to state levels. We need to speak to them and move ahead along with them.

    Gaurav Mashruwala

  3. The issues are different for Fee Only Planners and those who sell products also. The interest of both categories can be conflicting also in most cases. Fee only financial planners are a minority. Majority sells products. Therefore if a common apex body is created, possibly the interests of fee-only financial planners will not be addressed or over powered by the bigger group which sells products also.

  4. Totally Agreed Kartik! This will give the industry the due recognition and also as professionals we need guidance from various sources and this platform – a national level can be a great step.
    Let me know if I can contribute in any manner for this

  5. I Completely agree. we need a body which can bring clarity on all these aspects.

  6. Vinayak Sapre says:

    I am all for it and would love to be part of it.

  7. Dhruv says:

    Dear Karthik 

    The Foundation of Independant FInancial Advisors (FIFA) has been precisiely set up to be a pan India body of IFAs and local/regional associations. 

    It has already taken up 3 of the issues mentioned by you namely : (1) Service Tax (2) Direct Plans and (3) Regualtion for Investment Advisors with the regulators.

    It is only when leading practictioners across the country come together will the voice of the IFA community get credibility like that of the Bar Council and BCAS.

    I would urge all IFAs individually or through their association become members of FIFA .

    Please visit our website for more details.

    Dhruv Mehta

  8. Rajesh Joshi says:

    Great Idea Kartik. Lets start. Let me know if I can contribute.
    Warm regards
    Rajesh Joshi

  9. Suresh Parthasarathy says:

    The profession being in  the early stage its better to have a pan  India association.On behalf of Tamilnadu Financial Planners Association we are keen to lend support to such a initiative to take it forward.


    Suresh Parthasarathy.

  10. Narayan Sindhee says:

    United We Stand,Divided we fall.When are we going to be united?Dear Kartik initiate the first step. Many will follow

  11. Yes, i totally agree. there's no national level body which represents Financial Planners of India and helps in protecting their interest. Where FPSB is craving to become MF SRO, we individual planners/regional associations have to unite and take the things forward . But the idea should be for pure financial planners as for MF distributors there are already some like wealth forum etc. I am based at Chandigarh . Do let me know if i can be of some help. 🙂

  12. Yes, I am 100% Agree with Kartik.

  13. Yes, I am 100% Agree with Kartik.

  14. Yes, I am 100% Agree with Kartik.

  15. Lovaii Navlakhi says:

    Karthik, we spoke this evening. While we take time in setting up this body, issues will continue to sweep past us. We can use existing forums or bodies, especially those who have opened up conversations (and hence acceptance) with regulators; and take up these issues from "within" these bodies. No ego in who fights for this cause; the voice needs to be heard.

  16. Dear Friends:

    Thank you very much.

    I am so glad many of you share the same sentiment. I will get in touch with all of you over time as I work on this further.

    At this stage I want to highlight just one point: This body should be for everyone in the business of (personal) financial services and not for financial planners etc. The idea is to represent the words, thoughts and interests of all financial advisors i.e. all of us and everyone who serves the public at large. 

    As of now I envisage that the activities of this body would be in addition to what is already being done by other local and regional associations. I was thinking that 1-2 office bearers of various associations across the country be members of this body in their official capacity. This is pretty much the same thought echoed by Manish as well. So as and when something needs to be done this body automicatically becomes collective voice of all of us across the country. Likewise if some common legal or systemic issue germinates in say Tamil Nadu (TN) and it concerns all of us; then the TN body may choose to refer the matter to this central body.

    So basically things that just cannot be done OR are difficult to be done OR it is better that a national body takes up a matter; that's where this body plays a role. Eg. Filing a Public Interest Litigation. 

    Thanks once again everyone. Let's keep the thoughts rolling.

  17. Sanjeev, I was thinking of this to be a body which is not business centric. Large, fundamental, regulatory, industry oriented subjects be dealt with by this body.

  18. Yes Gaurav – local bodies are doing a great job. Lets explore how we can support them much more.

  19. Thanks Balvir & Vinayak – will get in touch.

  20. Thanks Rajesh – Will connect.

  21. Agreed. Will talk to both you and Dhruv as advised by you.

  22. Manikaran, I was envisaging a much large role to be played by this body. Ultimately all of us are financial advisors so why not have a common platform.

  23. Will connect with you in due course – thanks!

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