Global financial planning body decides not to renew pact with FPSB India

US-based Financial Planning Standards Board (FPSB), the authority for providing financial planning education worldwide, has decided not to renew its licensing agreement with FPSB India, putting a question mark over the future of hundreds of certified financial planners (CFPs) in India.

FPSB has found evidence of financial impropriety with FPSB India and was not happy with the way the CFP certification was promoted in India over the years, sources in the know said. 

The agreement between FPSB and FPSB India expires on March 31, 2020.

FPSB enters into licensing and affiliation agreements with non-profit organisations, or their equivalent around the world, authorising them to administer the CFP certification programme on behalf of FPSB. 

At present, FPSB has member organisations in 26 territories with more than 175,000 CFPs. The countries include India, Australia, Brazil, Canada, China, Colombia, Singapore, South Africa and Thailand.

FPSB India is promoted by 44 financial services organisations and is the licensing authority for CFP marks.

“FPSB suspects irregularities in the financial accounts of its Indian affiliate and is unhappy with the way the CFP certification has been promoted in the country,” according to a person familiar with the matter. Charter members comprising asset management and insurance companies have not taken the necessary initiative to develop financial planning as a profession, he added.

India had 2,036 CFP holders at the end of calendar year 2017, compared with 17,523 in China, 4,766 in South Africa and 3,409 in Brazil. 

“The irony is that the number of Indian aspirants who have dropped out or have not completed the certification number are around 20,000, 10 times the current number of CFP holders,” said another person on the condition of anonymity.

While admitting the termination of its licensing agreement, FPSB India insisted that it remained a professionally managed body with high standards of corporate governance. 

“It is not a policy of FPSB India to react to baseless rumours and speculations. The processes adopted by FPSB India have earned it tier-1 ranking with 95 per cent score in the previous assessment by FPSB, and we expect similar accomplishment this year as well,” Vice-Chairman and Chief Executive Officer Ranjeet S Mudholkar said. 

Over 6,500 candidates had passed the CFP examination till date, he added.

In a recent letter sent to CFP aspirants in India, FPSB Chief Executive Noel Maye said the authority would evaluate options to develop a business plan and success metrics for the financial planning profession and CFP certification in India.

“FPSB will not comment on its business dealings with FPSB India," Maye said in an email response.

“FPSB remains committed to building the financial planning profession and CFP certification programme so that consumers in India can access financial advice and financial planning from competent and ethical professionals.”