The Hindu Business Line : Financial planners body seeks recognition

FOR most of us who file our tax returns and frequently need to make decisions on investments, there usually exists a trusted "financial consultant" who eases our way through paper-work and fine-print.

And, it is doubtful whether any of us spare a minute to go over the background and the qualifications of those whom we trust with our financial planning.

It is to make this process of financial consultancy more safe and reliable for the investor that the Association of Financial Planners (AFP) has sought recognition for the field of "financial planning".

Currently, there are no rules to govern this field of activity, says Mr Ranjeet S. Mudholkar, CEO of the association. According to him, the US, Malaysia and even Singapore recognise this important field of activity and have strict rules governing its practice.

The basic issue, he says, is that there is no distinction made between product selling and advisory services. So, while the ubiquitous insurance agent may have a licence to sell the products of a specific company, he does not necessarily have the qualifications and the knowledge needed to advise the public on financial decisions. The association is hoping that the Interim Pension Regulatory and Development Authority will distinguish between advisory and pension product selling services. It has submitted papers to both SEBI and IPRDA detailing the evolution of regulations on financial planning. It has also approached the Finance Ministry for recognition and, so far, the response has been "positive," he says.