Private practice of financial adviser
Money is something that, of course, worries each of us. The topic of "personal funds" traditionally holds honorable top places in the ratings of the most important aspects of life and follows directly behind "family relations", "housing issues" and "personal security".
It is rational to manage personal finances, correctly forming a strategy of accumulation for large purchases, management of loans and tax deductions, etc. For more than 100 years, financial advisers have helped the people of developed countries. In the US, Europe, Australia, almost no person will turn to a bank or an insurance company without first meeting with personal financial advisers. In Russia, the first advisors only appeared in 2005, when the results of a survey conducted by "Romir monitoring" confirmed the need for Russians to provide financial advisors to more than 34% of the adult population.
"An appeal to consultants is a fairly common practice for those who have the notion of" my ": my money, my personal doctor, lawyer, etc.," says Dmitry L., a financial adviser to the head of one of the major Russian companies. For wealthy citizens, this is primarily a status symbol, although more objective factors are played by more objective reasons: lack of time and desire to monitor all matters themselves, while clearly expressing the need to somehow use the constantly coming funds. "Natalia Dovnar" Finance. " , No. 4 (141)
Since that time, the industry of rendering paid consulting services to solve personal financial issues is actively developing, which is facilitated by the development of the financial market, the complication and increase in the number of financial instruments. This kind of professional activity is popular: flexible working hours, low start-up capital and expenses for the maintenance of one's own business, as well as high material and emotional returns from work. Therefore, the idea of organizing our own consulting practice in the field of personal finance is rightly considered to be the right idea for small business right now!
The activity of the financial adviser is traditionally one of the ten most prestigious and highly paid in the world (the rating of the journals CNN Money and Salary.com). Financial advisors provide clients with the following services: preparation of an individual financial plan and selection of the best financial instruments for achieving the client's financial goals; the formation of an individual investment strategy and the selection of optimal tools; selection and execution of insurance protection programs for life and property of the client; the development of a strategy for the provision of a pension period, assistance in the return of tax deductions, the selection and maintenance of the formulation of an optimal lending program (consumer, auto-, mortgage). In the proposals of financial advisers, you can also find such delights as: international instruments for the preservation and augmentation of capital, the accumulation programs for the education of children abroad, various options for purchasing real estate abroad, incl. on credit.
The most popular services in 2009 were: advising on saving money (56% of the total number of appeals to advisors); assistance in registration of tax deductions (27%) and planning of pensions (17%).
The organizational practice of the financial adviser is most often framed as LLC (40%) and IP (30%). Advisers actively use the opportunities of small business support programs when organizing the actual practice - they get subsidies and benefits, for example, in Moscow the amount of the grant for business organization was 350,000 rubles. The conditions and the amount of financial support for beginning financial advisors in different cities vary, but this socially useful activity is easily supported without any special difficulties.
Kondratenko Alexander, Khabarovsk: "I received 2 types of subsidies: from the Employment Center of Khabarovsk in the amount of 58,800 rubles. (federal subsidy) and from the Administration of Khabarovsk in the amount of 100,000 rubles. (local subsidy). Also, the fund reimburses the costs of organizing a legal entity in the form of IP or LLC, provides free accounting and legal advice. The administration encourages priority activities for the region, such as consumer services (for example, NFS - financial management). It's nice that the state is in some way ready to really help the beginning business by granting grants. "
Most of the advisors are publicly active: many have their own Internet portals, blog pages, they are actively invited to cooperate with the media, they actively participate in exhibitions and conferences. But there are also those who prefer to work only with their client base. According to statistics, the profession of financial adviser is most successfully mastered and combined with the main activity: bank customer service managers, insurance agents, pension advisers, realtors, accountants and teachers.
How they work. "A financial adviser should correctly understand what the client wants. For this it is necessary to be a good psychologist, because people often do not know what they want. The consultant helps formulate the investment objectives of the client and makes a financial plan for the whole life. And to pick up an investment portfolio, he needs to understand what costs are and when the investor is coming. Then at the right time the client will have money to pay for the child's education, for a quiet retirement. The consultant should then determine how the client is treating the risk. The client's words that he is ready to lose a little on investment may not correspond to reality - he will start to get nervous or even liquidate his portfolio, if at the end of the year he decreases. A frustrated customer is a very unpleasant partner for a consultant. Negative information about its adviser Russian clients will be shared with greater willingness and the negative effect of this is very strong, since the reputation of the consultant suffers. "Elena Berezanskaya, Forbes 08.2005g. The average day of the Expert Advisor is 5-6 hours a day, which is ensured by the automation of many processes - from leaving the client's financial plan (automatically taking into account all changes in legislative regulation and instruments on the market), prior to the exchange of customer documentation with companies suppliers of financial instruments.
How much do advisers earn today? 60 000 - 85 000rub. per month in the major cities and 25 000 - 45 000 rubles. in medium-sized cities, which is ensured both by the payment of services by clients of independent expertise and adviser, and by remuneration from leading financial service providers, for consulting the client and preparing the package of necessary documents. It should be remembered that the relationship between the adviser and the client is built on a long-term basis, and once finding an advisor, the client annually implements personal financial goals with his help. The clients' appeals to the adviser are of a regular nature and fluctuate from 2-5 times a year on various financial issues. On average, one customer annually purchases services for 10 - 20 000 rubles, including. including the commission from the services purchased by the client on the advice of the adviser. This level of compensation is provided approximately at 6-8 hours of work per year to serve the interests of one client.
The average cost of financial advisors is:
• 5 000 - 40 000rub. - drawing up a personal financial plan,
• 400 - 20 thousand rubles. for consulting and execution of insurance protection instruments
• 400 - 900 rubles. - consultations and registration of an application for the transfer of a funded part of a pension to an APF or
• management company,
• 1 500 - 2 500руб. - assistance in processing documents for tax deduction,
• 3 000 - 7 000 rubles. - formation of an individual investment strategy and selection of tools.
• 1,000 - 2,500 rubles. - One-time consultations
The cost of organizing the practice of a financial adviser, depending on the format of the organization, can range from 70,000 to 160,000 rubles, which includes the costs of training, registration of the company and legal and accounting support for the process, as well as organizing arrangements for the formation of the initial client base.
Financial advisers take an active part in activities aimed at increasing the financial literacy of the population, supported by the Government of the Russian Federation, the Ministry of Finance of the Russian Federation, financial institutions and administrations of different cities. The advisers conduct open seminars, support the services of on-line consultations, participate in the preparation and dissemination of educational materials, organize events for students and schoolchildren. In some cities, for example, Novosibirsk, Saratov, Zhukovsky, support of the city administration has already found the idea of organizing the Centers for Financial Literacy. Within the framework of the Center, financial advisers implement activities aimed at spreading the culture of financial literacy among various categories of the population.
It should be noted that today in Russia an infrastructure has been fully formed that fully satisfies the full range of professional needs of the financial adviser, from training to maintenance on the basis of business organization sites. The community of advisers defines the standards for providing consulting services and methods of working with various financial instruments, and the most effective ways of forming and managing relations with its own client base are identified. Modern software solutions have been created, business support programs for financial advisers are actively working, an association of advisers, the IFP Alumni Club, is open to communication. It represents an opportunity for advisers to exchange experience among colleagues, including. and foreign experts, IFA practitioners with many years of successful experience. In fact, the main condition for development in the profession is the desire to provide consulting services to the population in the area of personal financial matters and the ability to communicate with customers.
Advantages and Complexities of the Business of the Financial Adviser
· Ease of organization. In order to start earning as an Advisor you need: to be able to correctly identify the client's needs, pick up a particular financial instrument and formalize it. There are a lot of options for starting. Many of our graduates begin to advise clients while continuing to work in the main place (for example, through the program of agency cooperation with the current Councilors) or, finding business partners among graduates, create joint projects, some are immediately set to independent swimming. Areas of specialization are diverse, as well as business format, and depend on your wishes, one of the graduates stops on private advice to friends and acquaintances on investment issues, and someone creates a wide branch network of universal Counselors.
· Low start-up costs. To start the activity you need: preparation for the program "Independent financial adviser" and a computer with Internet access, the average cost is $ 800. An important and mandatory item of expenditure is attracting customers: on average, attracting 1 client costs $ 32-50 depending on the range of services of the Adviser and the price offer. Based on the experience of the Advisors, they are most active in attracting clients: some types of Internet activity and seminars, exhibitions, first free consultations, PR. The costs of organization of practice (company registration, creation of own site, office rental and equipment, accounting and legal support) depend on your wishes, and the range of these expenses can be from $ 300 per month. and ad infinitum.
· Stable decent income , with high growth potential. Today, for the Counselor's service, customers are willing to pay $ 45-350 (at the prices of Counselors providing services in Moscow), on average this provides about $ 2,000 per month with a 4-6 hour working day. Once you start working with the client, you ensure a flow of subsequent calls, because after a successful first communication, the client is ready to purchase 2-3 services per year. Difficulties:
· Winning the trust of customers. "The subtleties of communication. Unlike corporate private counseling is less regulated, permanent attorneys in a certain sense of the word "enter the family." "As you exit the" shadow state, "a person will be forced to trust someone," said Sergei Smirnov, "but trust is not born immediately - the process of getting used to each other lasts from three to six months." The personal factor, mutual understanding and devotion play a very important role here. "In private counseling there are concepts" awkward "," uncomfortable "," inappropriate ". It is necessary to catch the mood, not to handle the most wonderful idea at the wrong time, - says Dmitry L. - Under no circumstances can one show his anger, even "rooting for the cause" - this will be perceived as "disrespectful," and disrespect ends not the most in the best way. " FINANCIAL ADVICE: LARGE AND SMALL Natalia Dovnar "Finans.", No. 4 (141),
Multitasking activities. Since in most cases the business of the financial adviser is small and does not provide for the staff of narrowly specialized specialists, one has to solve a large number of various tasks independently. Depending on the chosen business strategy, the adviser often comes to combine with the main activity functions of a marketer, an advertiser, a PR, a site editor, an accountant, a lawyer, a development director, etc.
· Constant maintenance of the form. The work of the Advisor is a solution to non-standard tasks by standard market instruments. Every day customers come with their own unique financial situations and goals, for each specific case it is necessary to create a unique design to achieve the tasks set by the client. Therefore, to maintain the right level of service, the Counselor needs to constantly develop, learn more about the market and its products, constantly keep his hand on the pulse of the financial sphere, which of course takes time and iron self-discipline.
Prospects for the development of private financial consulting in Russia 2010-2012.
• Restoration of the market after the crisis, the emergence of questions from clients about the preservation of capital and its multiplication • Activation of the Federal Financial Markets Service to attract private investors to the stock market
• Activation of the Central Bank and the ARB on the restoration and development of private lending
• Changes in the tax legislation of 2010-2012.
• Changes in the pension legislation of 2010-2011.
• Emergence of new financial services • Increased media interest in personal finance
• Development of financial literacy programs for the Ministry of Finance, the World Bank, banks and other financial institutions, the Federal Financial Markets Service, the Federal Security Service, and others.
34% of the population in cities with a population of 500 thousand - 1 million people asked whom you would like to be a mentor in the financial literacy program preferred independent financial advisers (according to the National Agency for Financial Research, November 2009).
• Development of relations between financial institutions and financial advisers.
Already more than 50 leading financial institutions of the country are already actively cooperating with financial advisers. Within the framework of cooperation, advisors have access to special conditions for access to financial instruments, agency fees, a system of measures to support activities.
• Development of business support programs for financial advisors and modern specialized software solutions for the work of advisers in the Russian market.
• 100 000 - 350 000 rubles. subsidies and benefits for small business development are available in every city in Russia. The conditions and the amount of financial support for beginning financial advisors in different cities vary, but this socially useful activity is easily supported without any special difficulties.
You can now find advisors in practically any large city in Russia: the most active graduates work in Moscow, Novosibirsk, Tyumen, Krasnoyarsk and Khabarovsk. Today, the Institute has approximately 1,300 graduates, but the concentration of financial advisors is still negligible (only 0.002% of Russian families have access to the services of a personal financial adviser, for comparison, more than 60% of European families are provided with such a service). As the demand for services continues to increase rapidly and the financial market provides significant support to the industry of personal financial consulting, we can expect an explosive dynamic market development in the next few years to the status of a step-by-step availability for Russia of the service of financial advisers.