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It’s not uncommon for a Relationship Manager (RM) at a Private Banking or Wealth Management firm to become a CERTIFIED FINANCIAL PLANNER (CFP) in his individual capacity.  Kotak Mahindra bank’s wealth management division has taken a step further and made it mandatory for RMs to become CFPs.  It has sent an internal mail to employees to that effect. 

The CFP programme in India is currently offered by the Financial Planning Board India. It’s a rigorous one-year course with six modules. However, the likes of Chartered Accountants and Chartered Financial Analysts (from the US), can directly appear the examination. Kotak Mahindra has promised the RMs that they would be reimbursed by the company if they clear the examination at the first attempt. The course costs anywhere between Rs. 20,000 and Rs. 50,000. Ranjeet S. Mudholkar, chief executive officer, FPSB India said, “There have been a number of people registering with us and RMs and financial product distributors constitute the largest chunk”. According to him, RMs from the Private Banking divisions of HSBC, ICICI Bank, etc, have also enrolled for the course.

BNP Paribas’s Private Banking arm, though it has not made CFP certification compulsory, encourages RMs to become CFPs. In fact, for the CFP Certification from FPSB India, BNP Paribas pays the fees upfront. “We think it is the most comprehensive course to enhance their skills in managing others’ money,” said Sharad Sharma, Head of Private Banking at BNP Paribas.

Karthik Jhaveri, the director of Transcend Consulting, an independent financial advisory firm, says if Private Bankers make the CFP mandatory, it may turn out to be an exercise in futility.  “Individually, the RMs stands to gain.  However, from the company’s point of view, it doesn’t make much sense.  It could be used as a marketing gimmick to lure more clients,” he said.  “But ultimately, when it comes to selling a product, RMS are constrained by the company policy and regulatory requirements,” he says.  For instance, each bank is allowed to sell only one insurance company’s products.  While ICICI bank sells only ICICI Prudential products, Citibank has a tie up with Birla Sun Life Insurance.