A veteran financial services professional, Prakash got his
first client through the social networking website, Facebook.
An M.Com gold medalist from Utkal University, Prakash Praharaj made up his mind to become a financial planner when he witnessed rampant mis-selling of ULIPs.
A Finance Veteran
With a three decade long experience in financial services sector, Prakash has worked in banking, life and general insurance. He started his career in RBI as a Coin Note Examiner in 1979 and joined United India Insurance as an Assistant Administrative Officer a year later. From insurance he moved to banking when he joined State Bank of India as PO and rose to become Assistant General Manager. His last assignment in the corporate world was in SBI Life Insurance as Chief Risk Officer in 2006.
As a branch manager with SBI, Prakash used to give financial advices on debt management, investment planning and tax planning to his customers. Later when he saw mis-selling of ULIPs, Prakash was inspired to do things differently. And so in 2010, Prakash floated his financial planning firm called Max Secure Financial Planners.
The Initial Struggle
During his initial days in Max Secure, Prakash struggled to put together the different components of his business together. He had to approach senior financial planners through ‘The Financial Planners Guild India’ to seek guidance and received generous help from the experienced planners in the establishment of his financial planning business.
Prakash recalls that he struggled to acquire even a single client for few months. However, he didn’t give up and continued to create visibility for his business through writing of articles in newspaper and social networking websites on the significance of financial planning in one’s life. Prakash got his first client through the social networking website, Facebook. Now, his financial planning business is growing. Referrals also helped his business to grow.
Prakash contributes regularly to newspapers, blogs and magazines and runs a regular column in Financial Express. Once a month, he conducts free classes for spreading financial awareness.
Business Model
Prakash works on a fee only model. He charges anywhere between Rs 7,500 to Rs 20,000 on a case-to -case basis. He never sells any financial products. He offers only one service - comprehensive financial planning to his clients.
Prakash plans to streamline the existing systems and processes. He will soon introduce risk profiling tools and customer relationship management software. Prakash is also planning to give orientations in various corporate houses across the country.
Prakash adopted data-analysis-recommendation approach. In this model, Prakash first collects necessary data from his clients such as their income, liability, debt etc. Prakash also tries to find out the risk appetite and the investment horizon of his clients Based on these inputs, Prakash tries to analyse the financial condition and needs of his clients. And finally, keeping these in mind, he works on developing a comprehensive financial plan.
Prakash says that a few distributors are mis-selling funds due to fat commission offered by some fund houses. He advises investors to carefully analyse the distributors before starting any financial relationship with them.
Prakash is optimistic that SEBI’s regulation on investment adviser will help financial planners gain professional recognition in the eyes of investors. He said “People should recognize a financial planner as a professionals just like a doctor or an advocate.”