How to become Financial Planner yourself?

Whenever you hear about the profession called “Financial Planner” then without any doubt you feel yourself that it requires additional qualification which you can’t reach. Hence better to follow that expert blindly. But it is not the case.

Look at your surrounding, you will find so many “Financial Planners” (they may be qualified or not qualified) who are guiding your friends or relatives in managing their finance in a better way. But have your ever thought why can’t you become your own financial planner? It is either careless, as the profession is attached with money or simply not have time to heed or thought. So let us understand what are the requirements and advantages of your own money manager.

1) Qualification not required-To become financial planner yourself it is not mandatory to complete MBA in Finance, CFP or CFA. Instead the zeal to learn and execute that learning into your life directly. I noticed during my CFP study that, the syllabus they provided is basic but not exhaustive. The syllabus is designed to understand the basics in a well defined way, which you too can get it by google search (if you really want to learn). For example, compounding interest calculation or time value of money are the basic calculations one need to be expert. But those things are taught us during our school days itself (formulas) which simply we ignored or forgot. After starting my study of CFP to date, I never come across the mathematical calculations which you may say “out of our reach”. What need is simple basic mathematics knowledge. Hence if you really  have a zeal to learn then you can become an expert in financial planning field too.

2) Risk Analyzer -Usually we planners analyze clients risk tolerance and risk capacity by sending few questions set to client. Once we receive those files, we do analyze what type of risk taker are they. But in reality and in my view the first and best person who can analyze your risk appetite is you and only you. This analyzing capacity will makes you to plan your money in a better way than anyone else. You can easily build up this skill by asking yourself about what type of goal you have, how much you can allocate, what you expect in return and how much loss you can bear.

3) Limitations of Support- If you have neither time nor interest then the left out option is to hire the planners. Each profession have it’s own limitations. Hence you can’t say that your financial planner will help you out in all aspect of financial life. Let us take the example, yesterday one of my client who is currently in USA for few months on her profession requirement, called me and askED for tax saving tips. After going through her requirements and current investments, I told her to opt for Bank FDs. Now on this recommendations she started to say that I need to do that FD on her part and she is ready to share the passwords with me. Eventhough it shows her faith on me but sometimes it cost you more. So understand the professional requirements and active involvement is the solution.

You can easily predict your financial goals and needs immediately and take action on that rather than looking for support from outside world.

4) Time Horizon-You can’t become financial planner in a day or two. It requires a constant effort to reach for knowledge. Hence the effort more you put on learning will make you a better planner and manager of your own money. So the solution is to search for the source of knowledge and update your knowledge continuesly. No one on this earth became expert by birth and it is foolish to believe so also. Look at top achievers in any field, you find that with constant practice, never give up attitude and searching for new things made them success.

Hence with applying the above said qualities in your life you can easily become financial planner of your own money. This actually makes you and your family a financial literate.


10 thoughts on “How to become Financial Planner yourself?”

  1. Hi Basu,

    Excellent Post !
    I discovered your blog a couple of months ago and have been reading it everyday now. I still have many articles to complete reading 🙂
    Very true that 9 out of 10 of our IT professionals don’t consider saving or investing as essential. I, being an IT guy, have people around me taking insurance only for the sake of tax saving and always treating insurance as an investment and almost all my friends opposed me when I was taking the term insurance.
    I’ve learnt many basic things reading your blogs and looking forward to learn many more interesting & important things.
    I have always wanted to do an MBA in Finance(planning now), but more than that is wanting to become financially literate.
    I started investing in PPF and shortly I will take my baby steps in the world of equity and mutual fund investments. Counting on you as my financial Guru 🙂
    Hope you continue writing many more superb articles like this !
    All the best for the future !!

    Thanks & Regards,
    Sai Rama Raju

    1. Sai-Thanks for your kind words 🙂 I found not only IT but around 95% of salaried not even prepared for next months expenses if salary not credit to their account. It is hard fact irrespective of their position and earnings. Also in my view to learn about personal finance then I don’t feel any degree is required. You can become your own planner only with interest. There are many people who are more knowledgeable and experienced in personal finance matter than any MBA or CFP graduate. But if you have interest then you too one day can be in a position to guide others. So spend weekly few hours and protect yourself from mis selling or bad financial advice. Also best of luck for your start up of investing 🙂

  2. I agree with your article 100% and obviously it is not written with business in mind. I am NRI and after getting fade up with banks, insurance agents, MF agents, brokers etc. I decided to learn it myself. So I took up the CFP course and completed all modules in first attempt with good grades. Behind this success was more motivation and less intelligence. The CFP course taught me a lot and since then I find it very interesting and at the same time menetally stimulating to do my own financial planning. Since I am not from finance line, I can’t get the certificate to practice due to lack of experience in finance field. Not that I want it, but it would give me an added satisfaction. The biggest benefit after doing the CFP is that all the bankers, insurance agents, MF advisors and many such people who just want to sell their products have stopped bothering me, once I declare that I am a financial planner myself. Good riddence!

    1. Shirish-Your achievements are appreciable. Hope other readers will get motivation and atleast become knowledgeable. Thanks for commenting. Spread your knowledge with others too.

  3. First let me say that this writing this take a lot of courage. It can only be done by a person who is very secure about his own abilities. I have the greatest respect for such people. Sadique Neelgund wrote something similar and I think he came in for some criticism,

    The way I see it there are two aspects to this:
    Clients side: They are too damn lazy, always want free advice not wanting to pay, not wanting to act and not wanting to learn. The retail investor has to learn to ask the right question first. Only then there is a chance of getting the right answer.

    There are scores of people who enroll for a gym and never go. Getting a plan done and doing nothing is the same.

    planners side; starting an independent advisory requires enterprise more than a degree. This is a rare quality. So people who don’t have it make it look as if the math is tough (it is not as you rightly pointed out) and the process is complex.
    I can smell the insecurity right off their blogs!

    Getting a continuous stream of clients require abilities which cannot be taught in a classroom.

    1. Pattu-Thanks for your wonderful sharing. Yes what you told about client side is 100% right. Yesterday one of client asked my review about LIC’s child insurance plans, giving me a full one hour work to analyze and send all LIC’s child plans. After that I know whatever may be my review, he will go with that LIC agent, as agents are expert in luring by unprofessional ways. My client may be 100% happy by thinking that he saved the fee what he need to pay and instead his agent shared the commission with him. But the result….only god can save them. So they want genuine advice but at free of cost. Lazy…..yes they are, when it comes to saving and cutting spending on their life style they can’t. Especially middle, higher middle class and the so called IT Professionals. I saw so many clients who can’t sustain for a month also if they loose their job immediately. But they never think about those issues. What is the use of such degrees and jobs which generates human beings who spend their whole life in earning but miss the bus by not knowing where and how to invest that earned money.

      Planner side, it is true that zeal of entrepreneurship is required with a great passion. Looking forward some quality contributions also from your end in educating and spreading this awareness. Pleasure if you contribute your views and knowledge by the way of guest postings.

      1. Thanks. Without motivation and inclination no one can help a persons financial life. I have been answering questions in the Jagoinvestor forum and it give very nice insight into human psychology. People ask long questions for the answers that are available from authentic sources within first 5 google results. They could found it faster than the time it takes to type the question.

        Sooooo much needs to be done reg. financial literacy. I strongly believe in the saying:
        Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

        The problem is to do this one must be a tough teacher. Sometimes one needs to tell a client, “either you do this or you are screwed” even at the cost of losing the client.

        CFPs esp. those just starting out cannot afford to be tough. Sometimes even the experienced ones don’t want to do this.

        I have severe writers block. If I do manage to write something decent I will pass it on to for your consideration

        1. Pattu-Your above sentence remembers me Swami Vivekananda’s saying-“If student is not coming to school then school has to go to student’s door”. I am following the strict rules myself and towards client also. I follow the client to the extent, beyond that I simply drop the mail saying that I dont want to work with the guys who neither have time value nor respect for others. I rejected two cases in a month, in that one is NRI (who himself called but after few days of interactions he started to reply lazily).
          Looking forward some great contributions from you either through your posts or through your comments.

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