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With the ever-evolving business and investment environment, Certified Financial Planners (CFPs) are now facing a unique set of challenges. It is important for CFP professionals to track, adapt, and identify potential changes appropriately to utilize the opportunity and resources to a greater extent.
In recent years, a number of changes have taken place over time and drastically disrupted the process of financial planning. So, as a CFP, you must have knowledge of the ongoing changes and the top trends in the financial planning industry.
As a financial planner, you will not only work with the entities or the individuals, but inside and outside of the country as well.
The digital revolution has brought a significant change in the financial planning industry. Innovations such as artificial intelligence, machine learning, cryptography, and blockchain technology have redefined the way of strategic planning, data analysis, transparency, accuracy, and forecasting.
Artificial Intelligence, the frontline leader, has been immensely used in Market analysis, portfolio management, and providing more personalized, data-driven financial solutions.
Organizations are increasingly turning to AI, and we’re seeing a rising number of AI startups. Greater insights and accuracy of AI help financial professionals better risk assessment, determine the investment horizon and make a financial strategy accordingly.
If you are a Certified Financial Planner and looking for a course to improve your professional efficiency, you can explore the AI and Personal Finance – Best Alternatives for Personal Investment Considerations course specially designed for CFPs to learn AI implementation and upgrade their knowledge with the changing financial planning industry.
The Global economy is interconnected, and globalization has turned the world into a single market for capital allocation. Every single movement in the world has a strong influence on a country's business and capital market conditions.
Post-COVID-19, “Inflation, commodity, and resource utility” have come out as a narrative. To dominate this, investing in diverse portfolios in growing sectors worldwide is the need of the moment. Investment has become more dynamic and volatile, changing rapidly with the market moves.
So, Financial planners should make their way for the strategic shift with prudence. Manage and allocate their client's capital across the world, hedge the funds, and create a strong, healthy, balanced portfolio to safeguard the wealth.
With the new Digi Tech. revolution and new-age investors, the financial industry has witnessed a massive change in products and services. Technological advancement, new product lines such as Fintech, Cryptocurrencies, ESG Mutual Funds, InvITs, REITs, and Decentralized Finance, Gen Z, including Gen X customer preferences have also shifted in keeping pace with the growing world of investment.
The revolution has resolved the flaws and loopholes of the traditional investment system. Products have become more flexible, advanced, and easy to manage. Digital currencies and cryptocurrencies are new forms of money, creating a new basis of exchange.
To keep pace with them, a financial planner must develop substantial knowledge of the new age tools and financial instruments to provide the best planning strategy to their clients.
Financial and investment planning has now become an active part of every individual. Like the unique fingerprint, every individual has their own identity and uniqueness in terms of financial resources, from the capacity of earning to Savings and from investment goals to risk appetite.
So, As a certified financial planner, it is important to understand the investor's personal goals and craft a plan that synchronizes at their personal level. Hone the skill of personal financing (investment, insurance, retirement, and risk management) through continuing education.
The interest of the investors has changed, and they are interested in value investing. Instead of high investment returns, they are more focused on the value proposition to create a Social impact through their investment.
The horizon and the purpose of investment have changed. Along with the high rate of return on investment, they are interested in being ethical, transparent, and making a social impact.
Investors are more interested in a sustainable approach to Environmental, Social, and Governance (ESG) Investments. The changing nature of investors also changes the motive of businesses, and investment opportunities and practices have changed.
International reforms and regulatory and Policy changes can restructure and reshape wealth managers. Changes in tax structure, compliances for FII, and DII on investment regulations change for investors and Multinational Corporations hinder investment.
The acceptance of new products and services of Fintech, digital currencies, and visible lending with technological evolution has increased. New safety measures, rules, and compliances are introduced by the governments to maintain security and protect the data for the new financial instruments.
So, a Certified Financial Planner must track the regular changes, learn the updates, and continue providing their clients the best investment strategies.
A CFP must look at the big picture of the market and have a track over every small geopolitical movement. Geopolitical conflict directly hinders global trade, business operations, and investment opportunities.
The Unprecedented situation of an estate, War, Conflict of Interest between countries, country sanctions, Inflation, and changes in trade policies are the external affairs that influence the capital market. Financial planners need to address these problems, understand the business cycles, measure the potential risk, and make an investment recommendation accordingly.
Keeping track and updates helps you to be a sharp investor working for the best output for your client.
In the rapidly changing financial landscape in 2024, CFPs will be marked by technological advancements, evolving market dynamics, and a greater need for adaptability. Staying informed and ahead of the curve is not just beneficial – it's essential.
my-CPE here is dedicated to providing continued education and insights into emerging trends. With a wealth of resources, updated Content, and expert guidance will embrace your skill and expertise to navigate the complex financial planning environment.
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The Authors, Allen Smith is a Practicing Certified public accountant and senior vice president at myCPE – Continuing Education Platform for Professionals. He understands the current needs of the education domain and strategies for the presenters to adapt the new changes.
