What Is A Financial Planner? What They Do And How To Find One?

Have you ever felt overwhelmed by the complexities of managing your finances? Would you prefer having professional help from a financial advisory to plan for a secure future?

Imagine having a trusted companion such as a sebi registered investment advisory who understands your financial objectives and will help you achieve them – like a financial planner!

Financial planners help you create a perfect long-term financial plan, considering every aspect of your financial life. If you plan to hire a certified financial planner, here is everything you need to know. 

What is a Financial Planner?

A certified financial planner helps you manage your finances, identify long-term goals, and create a strategic financial plan to accomplish them. 

They analyze your financial health by examining your income, expenses, assets, and liabilities and help identify your future financial goals. Based on this analysis, they create personalized financial plans to meet your financial objectives at various stages of life. 

Financial planners cover various aspects of financial planning, including budgeting, investment strategies, retirement planning, and tax efficiency. They also provide ongoing support and help you prepare for major life events, such as buying a house, investing in stock market and starting a new business, ensuring that these decisions align with your long-term financial goals. 

Financial Planners are Fiduciaries

Have you heard of the term fiduciary? A fiduciary is a professional who is ethically responsible and legally accountable for prioritizing your best interests and needs above theirs. 

They work with you with the utmost care, transparency, and reliability, ensuring that no product or service they recommend is for their benefit.  

Financial planners, as fiduciaries, must consistently uphold this high standard of obligation, called the fiduciary duty, throughout their relationship with you in your financial journey. 

The Securities and Exchange Board of India (SEBI) regulates financial planners in India. They must meet the qualifications and standards outlined, adhere to the code of conduct, and register as Registered Investment Advisors(RIA).

What Does a Financial Planner Do?

Financial planners can act for a wide range of financial requirements, such as the following:

• Identifying financial goals – Financial planners help you determine both short-term and long-term financial goals. 
• Understand their client’s financial health – They assess various factors, including sources of income, annual expenses, assets, and liabilities, to clearly understand your financial position. 
• Financial planning and analysis—Based on their analysis, they explore various strategies, including saving and investment options, to create a customized financial plan. 
• Investment planning – They offer expert advice on finding investment opportunities to create wealth while carefully considering your risk tolerance.
• Retirement planning – Financial advisor services also help you build a retirement fund to ensure a steady income throughout your retirement.
• Tax planning – Financial planners help you minimize tax liabilities by leveraging tax-efficient investments and optimizing deductions and exemptions.

Types of Financial Planners

• Certified Financial Planner (CFP)

Certified Financial Planners are highly qualified and experienced professionals who engage in various financial planning practices, including insurance, tax, retirement, estate, and personal financial planning. They must ensure that they maintain the highest ethical and professional standards.

Suppose you seek an opportunity to become a CFP in India. In that case, you must comply with the board standards by taking the Certified Financial Planner Course and passing the examinations administered by the Financial Planning Standards Board of India (FPSB India). 

• Chartered Financial Consultant (ChFC)

The Chartered Financial Consultant designation is a distinguished certification in financial planning similar to the CFP. It is more advanced and requires extensive coursework in financial planning. 

Certified Financial Advisors with the ChFC designation specialize in financial planning objectives such as wealth management, retirement planning, and estate planning. They provide in-depth and personalized solutions for complex financial requirements. 

• Chartered Financial Analyst (CFA)

Chartered Financial Analysts are financial professionals who have completed the CFA Program and acquired the required work experience. Their expertise is in valuing assets, portfolio management, wealth management, and financial tools. 

• SEBI-Registered Investment Advisors (RIA) or Fiduciary Financial Planners

SEBI-Registered Investment Advisors are authorized professionals registered with the Securities and Exchange Board of India (SEBI) to engage in financial advisory services. They must fulfill SEBI’s minimum qualifications and experience requirements to manage portfolios. 

They provide investment advice, educate clients, research, and manage portfolios​​. Always opt for a SEBI-Registered Investment Advisory in India.

• Wealth Manager

Wealth Managers are financial planners who offer a wide range of comprehensive wealth management services, generally to high-net-worth individuals. 

They serve as personal wealth advisors focusing on investment, risk management goals, tax, estate, and retirement planning. 

• Robo-Advisors

Robo-advisors are digital platforms offering automated financial advisory services to individuals seeking guidance on their investment and portfolio management objectives. 

They use advanced algorithms and technologies, including Artificial Intelligence (AI), to manage investment portfolios based on users’ risk tolerance and financial goals. 

These AI Financial Advisors are user-friendly, cost-effective, transparent, and accessible 24/7. Some popular Robo-advisors in India include Scripbox, FundsIndia, My UniverseZIPSIP, Spenny, Jarvis, Balance, etc.

What are the Benefits of Hiring a Financial Planner?

• Professional Expertise—Financial advisors provide expert knowledge to help you manage your finances effectively and make informed decisions. 
• Personalized Financial Solutions – Financial planners offer tailored solutions that fit your unique financial situation, guiding you toward a more secure future.
• Minimize Risk and Maximize Returns – Financial planners explore diverse investment opportunities to create a financial plan that balances risk and optimizes returns based on your specific risk tolerance and financial goals.
• Long-Term Financial Planning – They develop strategies to help you achieve your long-term financial goals, ensuring future stability and sustained wealth creation. 
• Peace of Mind – Financial planners relieve you of the burden and help you enjoy greater peace of mind by managing the different aspects of personal finance.

Do I Need a Financial Planner?

The need for financial planning solely depends on your circumstances, future commitments, and objectives. A certified financial planner might not be necessary if your finances are fairly simple and you already have a streamlined financial planning process. 

However, in many scenarios, seeking the best financial planner can be especially important to you for the reasons outlined below:

• A Change in Job – When you change jobs, you may need to reassess and better manage your finances to align with your new income and expenses. 
• At Different Life Stages—Whether you are getting married, blessed with children, or retiring, each life stage requires careful financial planning, especially when raising a family.
• Unexpected Influx of Money – A sudden influx of money, such as the benefit from a lottery, bonus, asset sale, or inheritance, requires strategic planning. A financial planner can help you make wise investment decisions in such scenarios.
• During Major Life Events—Financial planning guidance is also crucial during major life events, such as purchasing a new house, pursuing higher education abroad, and starting a new business venture to ensure financial stability and growth. 

Financial Planner vs. Financial Advisor

Differentiating Factors	Financial Planner	Financial Advisor
Scope of financial services	They provide comprehensive services, including financial and investment planning, budgeting, retirement, tax, and estate planning.	They provide financial services primarily focusing on investment and portfolio management. However, it can be targeted towards retirement planning or other financial objectives.
Purpose	They offer long-term financial planning strategies to accomplish future financial goals.	They offer expert guidance on the investment domain.
Process	They help you analyze your financial health, identify future goals, and create a financial plan to achieve them.	They help you make well-informed investment decisions, such as investing in mutual funds or SIPs.
Credentials	They often hold Certified Financial Planner, Chartered Financial Consultant, or Certified Financial Analyst credentials.	They are often SEBI-Registered Financial Advisors
Compensation	Often flat-rate or fee-based	Maybe fee-based or commission-based
Ideal For	Individuals seeking a holistic financial plan, which considers multiple aspects, such as investment, retirement, tax, and estate planning.	Individuals seeking investing opportunities and risk management

How to Choose a Financial Planner?

Choosing the right financial planner can be challenging, as numerous financial planners are available. Here are a few factors that you can consider while selecting a financial planner in India:

• Are they a Fiduciary?

Find whether the financial planner upholds the standards of a fiduciary. Some financial planners offer guidance based on their products or services rather than the client’s best interests. So, keep a note on this act of their profession.

• What are their Credentials?

Look for certifications such as Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), and Chartered Financial Analyst (CFA). These credentials ensure that the planner has undergone rigorous education and training and met work experience and professional standards requirements. 

• What is their Specialization, and What is their Typical Client Like?

Financial planning can include a wide range of aspects, including investment planning, estate planning, retirement planning, and more. Some of the best financial planners may specialize in one or more of these fields and provide guidance tailored to those specific areas.

In addition, some planners focus on servicing specific client groups, such as doctors, lawyers, or business owners. Assess your requirements primarily and find financial planners specializing in the fields that align with your needs. 

• Do they have Formal Complaints or a Disciplinary Record?

As confidential financial information is shared, ensure the financial planner has a clean disciplinary record. Check for formal complaints or discrepancies in their professional conduct to ensure reliability.

• What is their Fee Structure?

Financial planners have different fee structures. While some have flat fees, others may charge a percentage based on the assets under management. Check and verify their fee structure to ensure affordability and the best value.

If you have been searching for the best certified financial planners near your location, here is the FPSB directory -CFP Professionals Directory. 

Financial Planning Tips for Individuals

• Start Early – Start your personal financial planning process early in life to take advantage of the best investment opportunities and their compounding factor for maximized returns.
• Establish Clear Goals – Discuss with your family and establish clear short-term and long-term financial goals.  
• Create a Budget – Create a budget based on income, expenses, assets, and liabilities. It will help you understand your current financial health.
• Make a Financial Plan – Develop a financial plan to balance accomplishing the set goals and meeting routine needs. Focus on adequate savings, investments, retirement planning, and debt management strategies without compromising on your current living standards. 
• Take Expert Help – Consult certified financial planners to devise the right strategies for long-term financial goals and wealth management.  
• Review and Modify – Continue reviewing the financial plan online and modifying it to align with your changing financial scenarios, such as relocating, changing jobs, medical concerns, and more.

The Bottom Line

Financial planners are professional financial experts who help you manage personal finance by offering budgeting, investment, retirement, tax, and estate planning services to accomplish your future financial goals. They offer a well-structured approach with customized solutions to ensure financial stability and growth. 

Understanding the different types of financial planners, their roles, responsibilities, and credentials can help you make well-informed decisions about seeking their financial planning services online. 

Choose a trusted financial planner (partner) today for a secure tomorrow! 

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