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Financial advisors crowdsource an education start-up for skill development

Ninety-nine leading financial advisors come together to formalize education of financial planners through the Network FP platform

February 08, 2022 / 02:48 PM IST

Network FP, a platform that helps financial planners build their practice, has raised Rs 2.6 crore in a crowd-sourcing effort to formalize its educational arm. 

Ninety-nine leading financial advisors of India have contributed between Rs 1 lakh and Rs. 5 lakh, the company said in a statement. 

What made this fund raising unique is that it was crowdsourced by Network FP’s own members; financial advisors and distributors, many of whom also double up as trainers on this platform.

Led by founder Sadique Neelgund, Network FP has over 1,000 registered members. It organizes training sessions for its members, who are either financial advisors or Association of Mutual Funds of India (AMFI)– registered mutual fund distributors. 

“With this funding, we are set to revolutionize financial advisory space. India has a critical need to bring in professionalism to financial intermediation space and we are well-positioned to bring in this change,” said Neelgund.

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The financial advisory market in India is fragmented. The country has close to 115,000 registered distributors to sell mutual funds, according to AMFI.

Network FP lists around 250 Qualified Personal Finance Professionals (QPFPs). There are around 1,300 investment advisers registered with the Securities and Exchange Board of India (SEBI).

Additionally, there are over 2,000 certified financial planners (CFP) listed on the website of the Indian office of the Financial Planning Standards Board (FPSB).

Yet, experts say, India has a dearth of quality financial advice. One reason, experts in the advisory and mutual funds space say, is that there is no access to education available to all distributors, financial advisors and investment advisors registered with SEBI.

While FPSB offers its own Certified Financial Planning (CFP) course, the National Institute of Securities Markets, founded by SEBI, also runs courses for aspiring investment advisors.

Privately run associations or platforms like Network FP, too, conduct their own educational crouses for distributors and advisors.

According to Neelgund, if advisors are well-educated about financial products and financial planning, investors would benefit from good advice.

“The challenge for investors is to decide who (financial advisor) to go to and who to trust. All advisors and distributors would say they’re great. But the customer (investor) doesn’t know who to go to, for trusted financial advice,” said Vishal Dhawan, a certified financial planner and founder-CEO of Plan Ahead Wealth Advisors.

A formal training ecosystem, such as the one Network FP is building, would help better train its cadre of advisors and distributors, Dhawan said.

With nearly 100 practicing planners having joined the crowdsourcing initiative, the curriculum would be more in sync with the times, Neelgund said.

Dhawan added that most education material that is available today for the distribution and advisory community is generic.

Advisors involved in Network FP’s crowdsourcing effort would be better placed to design content because of their constant connect with their own clients. For instance, understanding cryptocurrencies and should they be made part of an investor’s portfolio. Or the evolution of smart-beta funds; a  new-age and an emerging class of mutual fund schemes.

The money, according to Neelgund, would be used to set up infrastructure to deliver educational content to distributors and advisors across India.

For Network FP too, an EdTech platform helps as it offers something extra to its members to help them make a better living. The community has been at the receiving end of SEBI in a tough regulatory environment that calls for high levels of compliance -- something that many advisors claim has discouraged new professionals from entering the space.
Kayezad E Adajania heads the personal finance bureau at Moneycontrol. He has been covering mutual funds and personal finance for the past two decades, having worked in Mint and Outlook Money magazine. Kayezad was the founding member of Mint’s personal finance team when it was set up in 2009.
first published: Feb 8, 2022 02:48 pm
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