The Emergence of Financial Planning

The United States was the first to identify financial planning as a distinct body of professional practices since 1985. A decade later, financial planning starts to emerge as a distinct profession in Australia.

In order to make the practice of financial planning a profession and recognize financial planners as professionals, various countries have already set up professional bodies and developed financial planning courses for the industry in their countries.

The United States have developed financial planning courses and created the Certified Financial Planner (CFP) professional designation. Australia saw the same need to recognize their financial planners as professionals and was the first country to be licensed by the US CFP Board of Standards to use the CFP designation.

The countries want to use the CFP designation because it is the only internationally recognized professional designation for financial planners. They also appreciate that financial planners who are granted the use of the designation have met rigorous criteria to become qualified.

The purpose of this task force is to exchange information and experience so that its members can help one another to develop the profession of financial planning in their countries. Added to this, members also have a vested interest in maintaining the profession standards associated with the use of the mark (CFP) in their countries.

Financial planning is rapidly evolving into an internationally recognized profession.

Several factors have fuelled the global growth of financial planning services:
(1) Consumer demand for financial planning services is on the increase as people around the world face similar problems when it comes to handling their finances.

(2) Transparency across borders is another reason for increasing international interest in financial planning. Trade agreements between countries, multi-national corporations (MNCs), international investments, and electronic communications have shrunk horizons to the point where some observers refer to the world as "global village".

One of the interesting developments with the emergence of the financial planning profession in Australia has been the parallel development of regulation governing financial planning practice.

The Financial Planning Association of Australia (FPA), have been instrumental in influencing changes in regulation and industry structure.

This body of regulation set down rules that govern the giving of financial advice.

One problem arising out of this regulation, i.e. life insurance advisers, accountants, lawyers, real estate agents and others who can give financial advice, do not have to be licensed or behave according to the same consumer protection rules as financial planners. This is clearly against the interest of consumers and consumers� protection.

The solution to this problem was that FPA managed to convince the Australian government that all financial advisors (such as life insurance advisors) besides financial planners should be licensed and apply the consumer protection rigor to their practice.

This profession is relatively new in most Asian countries.

However, financial planning associations and the beginning of financial planning professions are starting to emerge in Singapore, Malaysia, Korea, Hong Kong and Taiwan. Indonesia, Thailand and India are also interested in establishing the profession of financial planning in their countries.

From this, it is clear that financial planning will emerge a strong financial profession in Asia. Australia, and other countries that have already established their financial planning industry have to share their experience and help Asian countries to establish and provide them with strategic guidance in positioning themselves with their government and community.