Facing challenges over charging advisory fee after the no-entry load regime on mutual funds became applicable and the controversy over the high commissions on Unit-linked insurance plans (Ulips), both public and private sector players are upgrading skills of employees and distributors on advisory issues.
State Bank of India is leading from the front and is encouraging employees to undergo the financial planning course offered by the Financial Planning Standards Board (FPSB). As an organisation, SBI has the highest number (14 per cent of the total) of certified financial planners (CFPs) in the country.
“The future is in advisory mode and so we thought of strengthening our competence there. We encourage our people to take the course and the bank reimburses the fee along with a monetary incentive of around Rs 20,000 once they pass the course,” said a senior official at SBI on conditions of anonymity.
Axis Bank is also focussing on training its employees in-house. “We encourage our employees to get certified to sell investment products. We have introduced an internal certification course as well,” said the Axis Bank spokesperson.
Reliance Mutual Fund has negotiated lower fee with the FPSB for its distributors undertaking the financial planning course and will also reimburse the fee to those who pass the course.
SBI feels honing financial planning skill will give them an edge once the regulators move towards advisory regulation. “We hope the regulation moves in that direction and we will have people ready to work on those,” said the official.
Experts feel that these are right moves and will benefit the financial sector.
“As of now anyone can call himself an adviser but as the Swarup committee has recommended, there should be a minimum certification prescribed for taking up an adviser’s role,” said Ranjeet S. Mudholkar, CEO, FPSB India.
Around 15,000 individuals have enrolled themselves for the CFP course.