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Our Bureau

Kolkata , Feb. 17

THE Association of Financial Planners (AFP) has in a pre-Budget memorandum urged the Government to help change India from being `a nation of savers' to `a nation of investors'.

The Government should take steps to create a regulatory framework to propel the financial planning industry, starting with encouraging innovative ways of raising resources, the AFP has stated, adding that qualified financial planners, given the increasing need to access financial products and services, will be required to help consumers take informed financial decisions.

There should be a distinction between "advice" and "selling", with separate certification requirements for the two activities. Further, there should be a disclosure of commission paid to financial planners, agents or advisors of mutual funds, insurance and fixed deposits.

In such a situation, an investor who is subscribing to any such product/advice will be aware of the commission being charged by his distributor/planner.

This will lead to greater transparency in the product distribution process. It is currently not possible for the customer to ascertain whether he is being sold a particular policy (in the case of insurance) because it provides his agent the highest commission.

The Association has also stressed on the effective application of Investor Education and Protection Fund's corpus as well as unutilised funds/dividends from sources such as MFs. To encourage fee-based financial planning in the country, emoluments received from clients should be exempted from service tax, AFP has mentioned, adding that financial planning is still a new concept in the country and local investors should be encouraged to approach professional planners for advice.

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Call for regulatory framework to boost financial planning sector

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