How to become financial advisor in india

By Rajesh Kumar, CFP, CFA

Former President, Financial Planning Standards Board India

Financial economy and wealth management/three for 25+ years of experience.

Technical Review: Dr. Priya Shah, Professor of Finance, IIM Ahmedabad*
Industry Review: Vikram Mehta, CEO, Wealth Managers Association of India

Executive Summary

The Indian financial advisory sector is experiencing remarkable growth, driven by:
The wealth management industry is projected to reach USD 5.5 trillion by 2025 (IBEF Report 2023)

• Only 1 registered financial advisor per 50,000 citizens (SEBI Data, 2023)
•  Growing middle class with an investable surplus (approximately 350 million by 2024)
•  Increasing financial literacy and investment awareness

 Market Snapshot 

•  Total AUM (Assets Under Management): ₹23.3 trillion
•  Annual industry growth rate: 12.5%
•  Registered Investment Advisors: 1,380
•  Average client portfolio: ₹50 lakhs to ₹5 crores

 1. Understanding the Role of a Financial Advisor

 Current Industry Landscape

Market Segmentation

•  Mass Market (Investment < ₹10 lakhs): 65% of potential clients
•  Mass Affluent (₹10 lakhs – ₹1 crore): 25% of potential clients
•  High Net Worth (₹1 crore – ₹10 crores): 8% of potential clients
•  Ultra High Net Worth (>₹10 crores): 2% of potential clients

 Services Provided

1. Investment Planning

•  Mutual Fund Portfolio Creation
•  Direct Equity Advice
•  Debt Instruments Selection
•  Portfolio Rebalancing

2. Risk Management

•  Insurance Planning
•  Emergency Fund Creation
•  Risk Assessment
•  Mitigation Strategies

3. Retirement Planning

• Corpus Calculation
• Investment Strategy
•  Regular Income Planning
•  Healthcare Cost Planning

4. Tax Planning

• Tax-Efficient Investments
•  Section 80C Planning
•  Capital Gains Optimization
• Estate Planning

 2. Educational Requirements and Qualifications

 Academic Foundation

 Bachelor’s Degree Requirements

1. Preferred Streams

•  B.Com: Minimum 60% aggregate
•  BBA: Minimum 60% aggregate
•  Economics: Minimum 60% aggregate
•  Mathematics: Minimum 60% aggregate

2. Course Duration and Costs

•  Duration: 3 years
• Average Cost:
• The Government Colleges: ₹15,000-30,000 per year
•  A Private Colleges: ₹50,000-2,00,000 per year

 Post-Graduate Education

1. MBA Finance

•  Duration: 2 years
•  Average Cost: ₹5-20 lakhs
•  Top Institutes: IIMs, XLRI, SP Jain
• Placement Statistics (2023):
•  The Average Starting Salary is up to ₹12-18 LPA
•  Top 10% Salary up to ₹25+ LPA

2. M.Com

•  Duration: 2 years
•  Average Cost: ₹50,000-2,00,000
•  Specializations:
•  Financial Management
•  Investment Analysis
• The Insurance and Banking

 Professional Certifications

 1. Mandatory Certifications

NISM Series-X-A: Investment Advisor (Level 1)

•  Cost: ₹3,500
•  Validity: 3 years
•  Syllabus Coverage:
•  Financial Planning
•  Risk Management
•  Insurance Planning
•  Investment Planning
•  Retirement Planning
•  Exam Pattern:
•  100 MCQs
•  2 hours duration
•  60% passing marks

NISM Series-X-B: Investment Advisor (Level 2)

• Cost: ₹4,500
•  Validity: 3 years
•  Advanced Topics:
• Portfolio Management
•  Advanced Financial Planning
•  Estate Planning
•  Professional Ethics
•  Exam Pattern:
•  50 MCQs + 2 case studies
•  2 hours duration
•  70% passing marks

 2. Additional Valuable Certifications

Certified Financial Planner (CFP)

•  Total Cost: ₹1,75,000
•  Duration: 12-18 months
• Modules:
  1. Foundation: ₹30,000
  2. Risk Management: ₹35,000
  3. Investment Planning: ₹35,000
  4. Tax Planning: ₹35,000
  5. Retirement Planning: ₹40,000
•  Pass Rate: 65% (2023 data)
•  Global Recognition: 70+ countries

Chartered Financial Analyst (CFA)

•  Total Cost: USD 3,000
•  Duration: 18-36 months
•  Three Levels:
•  Level 1: Foundation
•  Level 2: Asset Valuation
•  Level 3: Portfolio Management
•  Pass Rates (2023):
• Level 1: 41%
•  Level 2: 44%
• Level 3: 49%

 3. Regulatory Requirements and Registration

 SEBI Registration Process

 Basic Requirements 

1. Qualification Requirements

• Mandatory: Post-graduate degree in specified subjects
•  Experience: Minimum 5 years in financial products
•  Net Worth:
•  Individual Advisors: ₹5 lakhs
•  Corporate Entities: ₹25 lakhs

2. Application Process

• Online Application Fee: ₹5,000 (individuals)
• Registration Fee: ₹10,000 (valid for 5 years)
• Processing Time: 30-45 days
•  Annual Compliance Fee: ₹2,500

 Compliance Requirements

1. Documentation

•  Client Agreement Template
•  Risk Assessment Framework
•  Investment Policy Statement
•  Compliance Manual

2. Regular Filings

•  Monthly Client Report
•  Quarterly SEBI Returns
• Annual Audit Report
•  Net Worth Certificate

3.Record-Keeping

• Client Communication: 5 years
•  Transaction Records: 10 years
•  Investment Advice: 5 years
•  Compliance Records: 8 years

 4. Career Path and Progression

 Entry Level (0-2 Years)

•  Role: Junior Financial Advisor
• Responsibilities:
•  Client Data Analysis
•  Market Research
•  Support Senior Advisors
•  Basic Financial Planning
• Salary Range: ₹3-6 LPA
• Key Skills Development:
•  Financial Analysis
• Client Communication
•  Product Knowledge
• Basic Portfolio Management

 Mid-Level (2-5 Years)

•  Role: Senior Financial Advisor
•  Responsibilities:
•  Independent Client Management
•  Portfolio Creation
•  Risk Assessment
• Investment Strategy
• Salary Range: ₹6-15 LPA
• Key Skills Development:
•  Advanced Portfolio Management
•  Client Relationship Management
•  Team Leadership
•  Specialized Product Knowledge

 Senior Level (5-10 Years)

•  Role: Principal Advisor/Team Lead
•  Responsibilities:
• High-Net-Worth Client Management
•  Team Management
•  Strategy Development
• Business Development
• Salary Range: ₹15-40 LPA
• Key Skills Development:
•  Strategic Planning
•  Team Building
•  Business Development
•  Advanced Investment Strategies

 Expert Level (10+ Years)

• Role: Independent Practitioner/Wealth Management Head
•  Responsibilities:
•  Ultra-High-Net-Worth Client Management
•  Practice Management
• Industry Leadership
•  Strategic Partnerships
• Salary Range: ₹40 LPA – ₹1.5 crore+
• Additional Income:
•  Profit Sharing
•  Performance Bonuses
•  Speaking Engagements
•  Training Programs

 5. Income Potential and Market Opportunities

 Revenue Models

1. Fee-Only Model

•  Fixed Fee: ₹25,000 – ₹2,00,000 per annum
•  Assets Under Management (AUM) Fee: 0.5% – 2%
•  Project-Based Fee: ₹10,000 – ₹50,000
•  A Hourly Rate: ₹3,000 – ₹10,000

2. Commission-Based Model

• Mutual Funds: 0.5% – 1% trail commission
•  Insurance: The prospect of first-year commission is between 15% and 35%.
•  Bonds and FDs: 0.25% – 0.5%
•  Structured Products: 1% – 3%

 Regional Income Variations

1. Tier 1 Cities (Mumbai, Delhi, Bangalore)

•  Entry Level: ₹4-8 LPA
• Mid-Level: ₹8-20 LPA
• Senior Level: ₹20-50 LPA
•  Expert Level: ₹50 LPA+

2. Tier 2 Cities (Pune, Hyderabad, Chennai)

•  Entry Level: ₹3-6 LPA
•  Mid-Level: ₹6-15 LPA
• Senior Level: ₹15-35 LPA
•  Expert Level: ₹35 LPA+

 6. Practical Case Studies

 Case Study 1: Successful Career Transition

Profile: Amit Sharma

•  Background: Ex-Bank Manager
•  Transition Year: 2020
•  Current Role: Independent Financial Advisor

Journey:

•  Year 1: Obtained certifications while working
•  Year 2: Built initial client base of 50 families
•  Year 3: Reached ₹50 crore AUM
•  Current: Managing ₹200 crore AUM

Key Success Factors:

1. Leveraged banking network
2. Specialized in NRI investments
3. Digital marketing focus
4. Regular client education sessions

 Case Study 2: Building a Practice

Profile: Priya Patel

•  Started: 2018
•  Initial Investment: ₹10 lakhs
• Current Status: Team of 5 advisors

Growth Strategy:

1. First Year:

•  It is none other than the priority of family and friends.
• Monthly workshops
•  Social media presence
•  Professional networking

2. Second Year:

• Client referral program
•  Specialization in retirement planning
•  Regular market updates
•  Online presence expansion

3. Current Operations:

•  200+ active clients
•  ₹300 crore AUM
•  Regular YouTube channel
• Weekly client webinars

 7. Technology Integration

 Essential Digital Tools 

1. Financial Planning Software

•  MoneyWorks: ₹25,000/year
•  Portfolio Management
•  Risk Analysis
•  Goal Planning
•  Wealth Magic Pro: ₹35,000/year
•  Advanced Analytics
•  Client Portal
• Automated Reporting
•  Investor Hub: ₹20,000/year
•  Essential Basic Planning Tools
•  Portfolio Tracking
•  Mobile App

2. Client Relationship Management (CRM)

•  Salesforce Financial Services Cloud
•  Cost: ₹12,000/user/month
•  The Features: Complete client management
•  Zoho CRM for Executive Summary and Sales Team
•  Cost: ₹2,500/user/month
•  A Features: Basic client management

3. Risk Assessment Tools

•  Risk Profiler Pro: ₹15,000/year
•  Portfolio Analyzer: ₹20,000/year
•  WealthRisk AI: ₹30,000/year

 Digital Marketing Tools

1. Website Development

•  Basic Package: ₹50,000
•  Premium Package: ₹1,50,000
•  Maintenance: ₹5,000/month

2. Social Media Management

• LinkedIn Premium: ₹5,000/month
•  Content Management Tools: ₹3,000/month
•  Analytics Tools: ₹2,500/month

 8. Client Acquisition Strategies

 Digital Marketing Framework

1. Content Marketing

•  A Blog Posts (2-3 per week)
•  Market Updates (daily)
• Investment Insights (weekly)
•  The Video Content (2-4 per month)

2. Social Media Strategy

•  LinkedIn: Professional network building
• Twitter: Market updates
•  YouTube: Educational content
• The Instagram: Financial tips and insights

3. Email Marketing

•  Welcome Series (5 emails)
• Monthly Newsletter
•  Market Updates (weekly)
• Investment Opportunities (as needed)

 Offline Marketing Strategies

1. Networking Events

•  Industry Conferences
•  The Cost: ₹25,000-50,000 per event
•  ROI: 2-3 high-value clients per event
  

   

2. Educational Workshops

•  Monthly Seminars
•  The Investment: ₹15,000 per event
•  Attendance Average of:25-30 people
•  Its Conversion Rate: 15-20%

3. Professional Partnerships

•  Chartered Accountants
• Legal Firms
•  Real Estate Agents
•  Insurance Agents

 9. Success Stories

 Case Study 3: Digital Transformation

Profile: Rahul Mehta

• Traditional Practice to Digital Advisory
•  Timeline: 2020-2024
•  Results: 300% client growth

Implementation Strategy:

1. Phase

1: Digital Infrastructure

•  Website Development
•  CRM Implementation
•  Digital Marketing Setup
•  Cost: ₹5 lakhs

2. Phase

2: Content Creation

•  Weekly Webinars
•  Daily Market Updates
•  Monthly Research Reports
•  Investment: ₹3 lakhs/year

3. Phase

3: Client Engagement

• Mobile App Development
•  Client Portal
•  Automated Reporting
•  Investment: ₹10 lakhs

 Case Study 4: Niche Market Success

Profile: Neha Singh

•  Focus: Women Investors
•  Started: 2021
•  Current AUM: ₹150 crores

Strategy Implementation:

1. Market Research

•  Target Demographic Analysis
• Competition Analysis
•  Service Gap Identification

2. Specialized Services

• Women-Centric Financial Planning
•  Investment Education Programs
•  Networking Events

3. Results

•  500+ active clients
•  95% client retention
• Average portfolio: ₹30 lakhs

 10. Future Trends and Opportunities

 Industry Projections (2024-2029)

1. Market Growth

• CAGR: 15.5%
• Projected Market Size: ₹45 trillion by 2029
• Number of Advisors: Expected to triple

2. Technology Trends

•  AI-Powered Analytics
•  Robo-Advisory Integration
•  Blockchain for Transparency
•  Digital Client Onboarding

3. Emerging Opportunities

•  ESG Investing
•  Cryptocurrency Advisory
•  International Investment Planning
•  Retirement Specialist

 Skill Development for Future

1. Technical Skills

• Data Analytics
• Digital Marketing
•  Fintech Integration
•  Cybersecurity Basics

2. Soft Skills

•  Virtual Client Management
•  Digital Communication
•  Remote Team Leadership
• Crisis Management

 11. Resources and Tools

 Professional Development

1. Online Courses

•  Coursera Financial Planning Specialization
•  Cost: ₹3,500/month
•  Duration holds: 6 months
•  Udemy Investment Advisory Courses
• Cost: ₹1,500-4,500
•  A Duration: 20-40 hours

2. Industry Associations

•  The financial planning standards by Financial Planning Standards Board India.
•  Membership: ₹10,000/year
•  Relationship bet market by mutual funds in India
•  Membership: ₹5,000/year

 Essential Reading

1. Books

• The following consultations Regarding some of the consultations discussed in the book with the same title “The Intelligent Investor” by Benjamin Graham.
• One should always stick with the book, “Common Stocks and Uncommon Profits” written by Philip Fisher.
• Peruse the article written by Parag Parikh focused under the name “Value Investing in India”.

2. Publications

•  Financial Planning Journal
•  Money Control Pro
•  Bloomberg Quint

 Tools and Templates

1. Client Management

•  Risk Assessment Questionnaire
•  Financial Planning Template
•  Investment Policy Statement
•  Client Agreement Format

2. Business Development

•  Marketing Plan Template
•  Social Media Calendar
•  Content Strategy Framework
•  Network Building Checklist

 Conclusion

Success as a financial advisor in India requires a combination of:

• Strong educational foundation
• Continuous professional development
•  Technology adaptation
•  Client-centric approach
•  Ethical practices
• Business acumen

The future of financial advisory in India is bright, with increasing demand for professional advisors who can combine traditional wisdom with modern technology and personalized service.

About the Author

Rajesh Kumar brings 25+ years of experience in the financial advisory industry. As a former President of FPSB India and current CEO of Kumar Wealth Advisors, he has helped over 1,000 families achieve their financial goals and mentored 100+ successful financial advisors.