Mr. Rahul Agarwal, Amity Jaipur: Opportunities in the Field of Personal Financial Planning

 Personal financial planning is a process of determining an individual’s financial goals, purposes in life and life’s priorities, and after considering his resources, risk profile and current lifestyle, to detail a balanced and realistic plan to meet those goals.” The individual’s goals are used as guideposts to map a course of action on ‘what needs to be done’ to reach those goals.

Individual’s major financial goals include finance requirement for his children’s higher education, their marriage and his and his spouse’s post retirement life. In addition to these goals, an individual needs to prepare himself to meet any exigency which may include medical problem, accident or some other emergency.

Present state of India is characterized by low household savings due to high levels of spending, inflation, improved but costly medical facilities, good but costly education options, less support of extended family due to nuclear family system, wasteful but unavoidable expenditure on marriage, increased life expectancy. 

Due to these factors, an average Indian is facing a dangerous situation where his present expenditure is increasing , leaving little scope for savings for the future on one hand and increased demand of funds for the future to meet his financial goals on the other. This situation reminds me of a story where one leading Shoe making company sends his sales man on a secluded Island to explore the possibility of opening a company’s showroom on that Island. The salesman calls the owner after reaching the Island and informs him about the fact that all the inhabitants of that island are barefoot and use banana leaves as clothes. As per the sales man, there is no scope for selling shoes .The owner calls his sales man back and after few months sends another sales man on the same Island for exploring the opportunity. The sales man calls the owner and informs that Island is a perfect place to open the showroom as nobody is having shoes. 

This story is a true representation of India’s present working population. Most of the working population is well short of meeting their personal financial goals due to pressures of present spending. The question is what the opportunity is. The opportunity lies in the solution to the problem of the working population. The solution is the right advice by the personal financial planner.

Personal financial planner diagnoses the financial problem of the client by asking right set of questions and by analyzing the information collected from the client. After diagnoses, he prescribes the right solution for the problem. After prescribing the solution, he ensures that solution is implemented for the client’s benefit. He monitors the client’s situation at regular intervals to make sure that client remains on the right path in order to achieve his financial goal.

Banks, Insurance companies, mutual fund companies offer numerous products which can become the part of the solution. The Indian market is full of solution seekers, looking for right advice. The Right advice can be given on the basis of right set of knowledge and skills. The Players in the financial market such as Banks, Insurance companies and mutual fund companies are looking for right solution providers in the form personal financial planners. This offers an exciting and rewarding opportunity to job seekers with right blend of finance and Marketing knowledge coupled with other desirable skills set.

By Mr. Rahul Agrawal, Faculty, Amity Business School, Amity University Rajasthan.