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Mr. Niamatullah

Mr. Niamatullah is the Programme Director of the Indian Institute of Financial

Mr. Niamatullah is the Programme Director of the Indian Institute of Financial Planning. The seasoned banker was with State Bank for over 36 years. He was also the Managing Director of the SBI Asset Management for 5 years. He shares with us his opinion on the need for wealth managers and the role of financial education that we should expect

We have seen a lot of activity in the financial education. Is there any specific reason for this?
Currently the selling of financial product is done haphazardly. Products are sold in a formidable way where the clients are not explained about the product or if it useful for them. There is complete disregard at what are the client's requirements and the risk assessment for him/her.

These are product pushers guided by the greed of earning commission. The financial products as such should not be treated as a commodity that just needs to be sold at all costs. The financial planning emphasises on the holistic view of the needs and long term requirements of a client.

The need has been appreciated by the clients and to meet such a demand or cater to such needs, service providers are being created. To create such effective service providers, people opened financial planning institute.

Do you think that a formal education in financial planning? What type of education should be there- academic or vocational?
It is highly desirable that there should be a formal education in the discipline of financial planning. It's requires a systematic study in tax planning, insurance, investment planning and estate planning - so that a generation can pass on its wealth to the next one. It's a very vast and technical subject and therefore a high end formal education is must. One must be very careful and responsible in handling the hard-earned money of individuals.

The subject is technical; therefore a vocational or to put it in better words very professional and practical approach is necessary but the medium to deliver such a course will be academic.

How do you see this develop in future?
Even today there are roughly 70 per cent of the people who are selling the investment products without proper knowledge about it and without considering if it is suitable to the individual. A product may not be suitable to the financial goal of one individual but still the agent badgers with the product to the customer and manages to sell. This attitude is dangerous and definitely not healthy for the investor. Therefore people will need financial planners and it has a good future.

How will the professionals and the investment industry handle the problem of recognition and quality control?
As far as recognition is considered, there is Financial Planning Standard Board (FPSB), it has world wide recognition in financial planning and if an institute in India is accredited by this body then the recognition part is taken care off. Now quality control is an issue but the market forces will determine who is not. And those who will survive the market will be the ones providing quality education as such.

Considering the global meltdown, will it reduce the demand for financial planners?
The demand will actually increase in a meltdown situation rather than decreasing because of the increase in financial problems. The people require the help of an expert in such a situation and financial planner is an expert to help out in such situation. Nevertheless the product seller will experience the loss of business in this meltdown. With a financial planner, product sale will happen only in the process of advising what is best for the individual.