‘A certified financial planner can easily earn ₹10-15 lakh per year’ | Mint

‘A certified financial planner can easily earn 10-15 lakh per year’

The new curriculum for the CFP certification is quite practical and application-based. (istockphoto)
The new curriculum for the CFP certification is quite practical and application-based. (istockphoto)


  • India’s new national education policy has mentioned that financial literacy should be started at a young age, in the school itself

New Delhi: There are far fewer certified financial planners (CFPs) in India than what the country requires. At the Financial Planning Standards Board (FPSB) India, we focus more on the ability and employability so that skilled financial professionals can enter the job market, says chief executive officer Krishan Mishra in an interview with Mint. While the CFP certification course costs a mere 1.5 lakh, freshers can earn 5-6 lakh per annum and those with just 3-4 years of experience can get salaries of 10-15 lakh, says Mishra, who took over as the chief executive in August this year. Edited excerpts from an interview.

What is the latest data on CFPs after the FPSB introduced the new CFP examination program in June 2020?

The number of CFPs in India was 2,517 in 2022 , compared to 2,338 in 2021. Globally, there were 203,312 CFPs in 2021 and 213,002 in 2022. The data for 2023 will be available by February.

What is the duration and cost of the CFP certification course?

The new curriculum for the CFP certification is quite practical and application-based. It consists of three specialist certifications—investment planning, retirement and tax planning and estate planning—followed by the final, Integrated financial planning examination. The final exam will have questions based on a case study that involves concepts that you have learned in the initial three levels. Although they are multiple choice questions, it is better to consider them as multiple task questions. You have to solve those to find the answers.

Anyone who is at least 18 years of and has completed higher secondary or class 12 may appear for these exams. But you can get the CFP certification only after your graduation. Students can clear all modules while doing graduation to land jobs right after they graduate. The ideal duration to complete all modules is 12-18 months. Applicants who have already spent a good time in the financial services industry can directly appear for the final exam. We call it the challenge pathway and launched it just a couple of months ago to expedite the process for experienced professionals.

Note that inexperienced candidates will have to clear all modules, get their bachelors degree followed by minimum one year of supervised or three years of unsupervised experience. Then only they will be able to apply for the certification. When I say supervised, it means that they should have worked under a CFP professional for a period of one year in the field of financial planning which will give them a practical understanding of all the modules.

The overall cost for the programme comes to almost 1 lakh plus goods and service tax, or GST. It involves the registration, exam and certification fees. There will be an additional cost of 30,000-50,000 if applicants reach out to FPSB-authorized education providers for the preparation.

In case somebody doesn’t want to go to an education provider, they will have to clear a test to qualify for the course. Otherwise, everybody needs to go to the education provider. Here, it is important to mention that the average pass rate for CFP examination varies in the range of 52-55% year after year.

What value does CFP certification hold, given that CFP professionals cannot charge for creating financial plans or impart any financial advice? Financial advisory is solely the prerogative of registered investment advisers (RIAs).

While it is recommended that CFP professionals take up the RIA licence if they want to get into full-fledged investment advisory, a large set of CFPs do not take it up and still manage to have a bright career out of it. A mutual fund distributor (MFD) and an insurance agent having a CFP certification make for a great combination. They become a more trusted resource for their clients or for the organization where they work. That is the reason why a lot of people have started applying for the CFP certification from these backgrounds. In fact, now we see a lot of chartered accountants coming to us to pursue the CFP certification.

What jobs are available for CFPs and what are their salary prospects?

In India, employment is available. But, ability is a concern. At FPSB, our focus is mainly on creating that ability in individuals so that they can go ahead and pick up the jobs. If you check online job platforms, you will find 7,000-8,000 vacancies for CFPs. So the demand for these professionals is higher than supply. In fact, we aggregate and post job opportunities on our website also on the ‘career’ page.

You will be happy to hear that there has been a significant change in the salaries being offered to CFPs . The average salary for a fresher should be around 5-6 lakh. However, somebody with even 3-4 years experience can expect an average salary of 10-15 lakh very easily. The opportunities are pretty good for these professionals in the future.

Are Indian investors ready to pay for financial advice? Do they seek financial planners or advisers?

Financial planning is still a push-concept majorly. But the change is visible. People have started asking for a financial plan before they start investing. Obviously, people never wanted to pay for it. They would trust unqualified relatives or friends over a qualified financial professional. Some of them have even faced the consequences of getting such informal advice. They are now ready to pay for financial advice from professionals. We tell people that financial goals keep changing and that a CFP professional can review and align your goals accordingly.

In fact, we recently did a consumer survey and the findings revealed that people who just acted on their own or took the advice of somebody other than a professional later found themselves in a very difficult situation. However, 90% of the people who took professional advice feel that they have taken the right step. They feel more secure and confident about navigating their lives. Further, more than 9 out of 10 clients of CFP professionals say the benefits of financial planning outweigh the costs.So that’s something which has been really positive.

What is FPSB India doing on the financial literacy front?

(Graphic: Mint)
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(Graphic: Mint)

CFP certification is an important area for us, but more importantly, our job is to educate people about their financial well-being. We do a lot of activities around financial literacy. We are in constant touch with various organizations and educational institutions, giving them information about financial planning by conducting offline and online events. In fact, on 4 October—the World Financial Planning Day, our activities around financial planning had covered approximately the entire length, breadth and width of the country.

We regularly conduct capacity building programmes for teachers in some schools and colleges so that they are able to understand the importance of personal finance and the financial well-being of individuals and their families. We also launched postgraduate course in financial planning in collaboration with Loyola Institute of Business Administration (LIBA), Chennai; KJ Somaiya Institute of Management, Mumbai; and Army Institute of Management & Technology (AIMT), Greater Noida. The classes will commence with the 2024 academic cycle. This course will give students the advantage of being postgraduates in management, while having incremental CFP certification, thus enhancing their employability quotient with potential employers.

What is the right age to introduce money concepts to children?

It is around the ages of 11-12 years when the child will be studying in class VI. While we cannot teach them about the stock market, mutual funds or the country’s gross domestic product (GDP), they should understand how money works. For example, parents can take the child along with them when they buy vegetables or groceries. In fact, I have heard that schools take the kids out to the vegetable market sometimes. They give them some money to make purchases. You can actually teach students by forming groups. So, for example, if students have to form a cricket team, they will need money to operationalize that cricket team. Such sports or art-related events are very practical and interesting ways of explaining money concepts to them.

Remember, if we don’t teach how money will work for them, money will make them work for itself. We don’t want the next generation to fall into this trap.

What does the national education policy say about financial literacy for young India?

India’s new national education policy has mentioned that financial literacy should be started at a young age, in the school itself. Some school boards have already started introducing financial planning as part of the curriculum such as in business studies courses or introducing it as vocational courses. These are early steps and there is a long way to go on that. The UGC, or University Grants Commission, had stated in August that personal finance is a life skill and it needs to be taught across all schools, colleges and universities depending on the age group and what they can grasp. It is not that only a commerce graduate can get into the financial planning profession. Even an engineering or medical graduate can do so.

What growth do you expect in the number of CFP professionals in India?

Currently, about 1,500-2,000 people are pursuing the CFP certification. But we are witnessing a good growth there. I expect it to be in the double digits by the next year. Thanks to a lot of effort from the team, we have been able to grow CFP certification’s awareness level by 43% in India, which is pretty decent and is the highest if compared with any other FPSB-affiliate organization anywhere in the world. This is phenomenal. The efforts are in the right direction, so numbers will change. We expect to have 10,000 CFP professionals in the next five years, that is, by 2028.

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