What is CFP (Certified Financial Planner)?

 

What is CFP?

CFP or Certified Financial Planner is a certification given by the Financial Planning Standards Board (FPSB) to individuals who wish to take up financial planning as a profession. The CFP is recognized internationally and considered the best for financial planning training, education and ethics to practice. The FPSB defines financial planning as a “process of developing strategies to help people manage their financial affairs to meet life goals.” It includes analyzing the client’s financial status, developing a financial plan for the client and implementing it for the client’s benefit.  

A Certified Financial Planner can find several career opportunities in financial advisory services as well as in the finance sector. A financial planner can offer services in the capacity of a consultant or represent his/her organization for offering financial planning services to individuals and organisations.

To earn the CFP certification, professionals must fulfill certain eligibility criteria and complete the 6-module CFP Certification Education Program

CFP Eligibility Criteria

One can earn the CFP certification under two modes – Regular Pathway and Challenge Status Pathway. Given below is the CFP eligibility criteria of both the modes.

Regular Pathway Eligibility:

The candidate must have passed class 12th and should have cleared the five-exam covering all six modules of the certification program to be certified as a CFP by the FPSB.

Challenge Status Pathway Eligibility:

Candidate who have cleared CA/Intermediate levelCFAICWA, CAIIB, CSLLBPhDMPhil, PG, Licentiate/Associate/ Fellowship of Life Insurance, Actuary, FFSI & FLMI from LOMA, Civil Service Examinations by UPSC can apply through Challenge Status Pathway. In this mode, the candidates are required to clear only the exam- Advanced Financial Planning to earn the certification.

 

CFP Exams

The CFP certification program includes five exams for six modules. There is no separate exam for the first module. Its weightage is added to the rest five modules (20% each). The six modules are listed below:

Module 1

Introduction To Financial Planning

Module 2

Risk Analysis & Insurance Planning

Module 3

Retirement Planning & Employee Benefits

Module 4

Investment Planning

Module 5

Tax Planning & Estate Planning

Module 6

Advanced Financial Planning

CFP Fees

CFP fee structure is different for Regular Pathway and Challenge Status Pathway. Take a look at registration, exam and certification fees of both:

Fee Structure: Regular Pathway

Description

Fees

Student Registration Fees with FPSB India

INR 16, 385 (valid for one year)

Exam Fees (Paper 1-4)

INR 4,130 per exam per attempt

Exam Fees (Paper 5)

INR 8,260 per attempt

CFPCM Certification Fees

INR 7,080 (renewed annually)

Fee Details: Challenge Status Pathway

Mede of enrollment

Fees

Description

FPSB India (Direct)

INR 29,955

Registration fees (valid for one year), certification fees and administration & processing fees.

Through Charter Members of FPSB India

INR 15,795

Registration fees (valid for one year), initial CFP certification fees, administration and processing fees.

 

CFP syllabus and topics

The syllabus of FPSB’s financial planning program includes eight topics which cover all the aspects, right from fundamentals of the program to application of skills in the real world. Take a look at the CFP syllabus below:

CFP certification programme components

Details

1.Financial Planning Principles, Process and Skills

Financial planning process

Financial planning practice and ethics

Professional Skills

Regulatory, economic and political environments that affect personal financial planning

Law and compliance

Time value of money

Client characteristics

Client risk profile

Client engagement and communications

Critical thinking

2. Financial Management

Principles of financial management

Personal and small business balance sheet (net worth statement)

Use and non-use assets

Cash flow statement

Budget preparation and management

Savings analysis and strategy

Emergency fund

Credit and debt management

Financial ratio analysis

Specific purpose planning

3. Tax Principles and Optimization

Taxation principles

Tax planning objectives

Tax planning principles

Tax planning law and policy

Tax analysis and calculations

Tax planning strategies

Tax planning for asset location

4. Investment Planning / Asset Management

Investment principles

Investment objectives, constraints, capacity and suitability

Investment time horizon

Behavioral finance

Asset classes

Investment theory

Performance measurement

Asset allocation and performance

Investment products – evaluation, selection and monitoring

5. Risk Management and Insurance Planning

Risk management principles

Insurance planning objectives

Analysis and evaluation of risk exposures

Risk strategies

Risk management products

Insurance law and claims process

Product, company and adviser selection and due diligence 

6. Retirement Planning

Retirement principles

Retirement objectives

Retirement needs analysis and forecasts

Potential sources of retirement income

Retirement income and withdrawal projections and strategies

Retirement planning and funding products

7. Estate Planning and Wealth transfer

Estate planning principles

Estate planning objectives

Legal related issues

Asset ownership and its implications

Estate planning documents

Succession planning

Special family situation

Projected financial situation at death

Estate planning strategies

Philanthropy and charitable giving

Management in the event of incapacity (i.e., living estate planning)

8. Integrated Financial Planning

Client engagement, communication, and financial planning process

Collection and data

Attitudes, goals and objectives

Issues and problems

Analysis

Strategies

Synthesis and recommendations

Implementation

Periodic review

 

CFP FAQs

Q: What are the benefits of CFP certification?

A: Certified Financial Planner is the most desired and respected global certification for those seeking to demonstrate their commitment to competent and ethical financial planning practice. Candidates having CFP certification get enhanced career and employment opportunities with financial services companies. They can work in banks, merchant banks, distribution houses, insurance companies, equity brokerage, and financial planning firms.

Q: What are the subjects included in CFP certification?

A: In CFP certification courses, candidates are taught regarding investment planning, retirement and tax planning, risk and estate planning and financial planning.

Q: How do I get CFP certification?

A: Upon completing all four education courses and related exams, meeting CFA exam and experience requirements, individuals are recognised as a Certified Financial Planner.

Q: How can I apply for CFP certification?

A: Candidates need to follow the steps below to apply for CFP certification.

·         Candidate can apply for the initial CFP certification only after successfully clearing Exam 5 and having required work experience 

·         Having met the criteria, duly fill the CFP certification application form and upload the required documents as mentioned in the application form

·         FPSB will verify the uploaded documents

·         Once the documents are in order, a payment link will be sent to the candidate on their registered email id for payment of fees

·         Once the candidate makes the payment and it is verified by FPSB, candidates will receive a digital copy of the CFP certificate on their registered email id

Q: If I already took the exam and did not pass, will I need to retake the education coursework?

A: No, if you have already taken the exam, your coursework will continue to be valid.

Q: Can I register and schedule my CFP exam before completing the coursework requirement?

A: Yes. You can register for the CFP exam prior to completing your coursework. 

Q: Can I postpone or withdraw from my scheduled CFP exam?

A: You may postpone CFP exam only once per registration. Your next exam appointment must be rescheduled by the next two exam testing windows.

Q: Can I change my CFP test date, time or location in the same exam window?

A: You may reschedule your CFP exam date, test site location and, in some cases, test start time, within the testing window when you are scheduled.

Q: How do I receive my CFP result?

A: You will receive a preliminary pass/fail report after you complete CFP exam. Official exam results are released approximately four weeks after the exam window closes.

Q: Is it possible to transfer my CFP certification to a different territory?

A: Yes, when a CFP professional wants to practice financial planning using the CFP marks in more than one territory, they must become certified to use the marks in each territory where they want to practice.

Q: In which mode CFP exam is conducted?

A: CFP exam is offered online only. Once a course is completed and passed, students have an opportunity to register for an online certification exam.

 

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