Financial advice need of the hour, regulations crucial, says expert

Krishan Mishra, CEO, Financial Planning Standards Board India (FPSB), said financial distress is one of the major reasons for suicides in the country.
Image used for representational purpose.
Image used for representational purpose.

BENGALURU: In the era of advisors, market experts, veteran investors and finflencers (financial influencers), the need for regulations on ‘financial advice’ being offered by them is more critical than ever. People in the industry said such experts should be regulated under the rules for Certified Financial Planners (CFPs), allowing them to make suggestions and render their expert advice.

Speaking to TNIE on the sidelines of an event in the city on Friday, Krishan Mishra, CEO, Financial Planning Standards Board India (FPSB), said financial distress is one of the major reasons for suicides in the country. “It should not be taken lightly. Indians don’t talk about bad investments. Over 47.1% of professionals have taken personal loans post-pandemic, despite the general incomes going up. One of the reasons could be the accessibility of buy now, pay later. People are not aware of their risk tolerance or how to manage their assets,” he explained.

FPSB organised a boot camp along with the Indian Institute of Management, Bangalore (IIM-B) for over 300 professionals from financial planning firms. The objective of the organisation through this is to allow companies to have the right kind of compliance and ensure that citizens get correct advice for their investment, tailored to their goals.

“Supporting the efforts of SEBI (Securities and Exchange Board of India), we want to give certifications to credible individuals with enough knowledge and background in financial planning. These CFPs can develop a scientific plan,” Mishra emphasised. 

Currently, the company has 2,731 CFPs in the country and a total of 223,770  globally. In the next five years FPSB is looking at adding 10,000 more to this pool, said the CEO. 

On the upcoming Union Budget that affects every household, he said the government should make sure the categories are easy to understand for all, and the finance minister must urge everyone to have a budget of their own. “In India, less than 5 per cent of Indians prepare their budget. The general perception is that budgets are for companies or organisations. But my advice to every Indian is when the Union Budget is out and whatever the changes may be, everyone should at least have a one-page budget for themselves,” the CEO said.  

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