The United States was the first to identify financial planning as a distinct body of professional practices in 1985. The United States have developed financial planning courses and created the Certified Financial Planner (CFP) professional designation. The CFP designation is used because it is the only internationally recognized professional designation for financial planners. In addition, a Southeast Asia/ West Pacific Regional Liaison Task Force of the International CFP Council was formed. 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.
The Financial Planning Association of Australia (FPA), have been instrumental in influencing changes in regulation and industry structure. However, there was one problem arising out of this regulation. The FPA are now talking with the government over draft legislation to bring reform into place.
This profession is relatively new in most Asian countries but will emerge a strong financial profession in future. A survey conducted by Smart Investor, found out about the market trend in Singapore. The financial services industry is changing. There is an increasing number of transaction-oriented sales people converting to �Financial Advisers� who are able to provide multiple financial services.
Technology is viewed as a driver. Financial planning firms are able to derive cost savings from the Internet in their internal operations. The number of �financial advisors� far exceeds the number of �certified� planning professionals. There is a struggle for tied advisors to be an independent advisor.
In addition, advisor qualifications vary greatly and there is a greater �Reputation Risk� for the financial planning industry. The need for financial planning is being recognized on a global basis. Governments and corporations are recognizing and supporting the need for financial education and planning. Consumers at all levels are gasping the need to plan financially. Despite all the implications, the financial planning industry is still booming. The Asian financial planning industry will experience much of the same prime movers and implications as do the US governments and companies will continue to encourage individuals to be more self-sufficient.
As a result, more consumers will seek help from financial advisors. Countries in Asia need to embrace technology and understand their target markets. They need to adapt to their client service model accordingly. In order to be "world class", a financial planning firm should think about more things besides sales.
The key to gaining a competitive advantage is to understand the new consumer and know what they want and need. Good strategy and research is also important in the financial service landscape and is essential to the successful distributor. Technological change and the electronic marketplace is one of the strongest forces driving the change in the financial sector of the economy. However, it is not the only one. |
