A Step-by-Step Guide to the CFP Certification Process

Nowadays, the Certified Financial Planner (CFP) has gained a lot of popularity among people aspiring to have a career in finance.

Why?

Because it opens multiple career avenues, offers flexibility in working, and attractive stipends. A CFP Certified Professional can work in any of the 27 countries that recognise the certification by the CFP Board, USA. From banks, insurance companies, wealth management firms, and NGOs to starting their practice, CFP professionals can swiftly step into higher-level positions in any of these sectors.

But, for a newbie, it’s quite difficult to navigate through the nitty-gritty of CFP as information is abundant on the internet. If that sounds like you, you’re in the right spot.

In this blog, we’ll discuss the basics as well as the intricacies of CFP.

So, let’s start without any further ado!

What Is a CFP?

The CFP is a prestigious certification with global recognition for individuals having a deep understanding of the financial planning process, ethical standards, and comprehensive financial management skills. The CFP Board of the USA is a nodal agency that sets the criteria for qualifying for CFP certification including the syllabus, examination, and ethical standards. However, it delegates its responsibilities to premier institutions across the globe to expedite the process. In India, the Financial Planning Standards Board (FPSB) is responsible for conducting exams and certifying successful candidates. Whether you are starting your career in financial planning or looking to elevate your current position, earning the CFP designation can significantly impact your career trajectory.

Let’s simplify and understand the CFP Certification Process in India.

Also Read – All About Fee-Based vs Commission-Based Financial Planners

CFP Certification Process

The CFP Certification process involves comprehensive learning, examinations and work experience. There are two pathways that candidates based on their knowledge and expertise can choose from.

• Normal or Regular Pathway

Here, the only qualifying criteria to enrol in a CFP course is to have at least a 50% score in 12th std. Next up, you need to complete the course that is designed to solidify your foundation in different crucial topics of financial planning. IMS Proschool is the official training partner of FPSB India offering courses on CFP. Our expert faculty, comprehensive syllabus coverage, mock tests and live interactive classes sets us apart from the rest. Moreover, to qualify for the certification the candidates must clear all exams covering the six modules of the certification program.

For college graduates, having cleared the 4NSE Tests, direct access to the final financial planning paper could be unlocked.

• Fast Track Pathway

This pathway is for professionals who want to add to their credentials or switch their careers to financial planning. Based on their qualifications and work experience, they will be allowed to sit directly for the final examination of CFP.

Who is eligible for the fast-track pathway?

Candidates with qualifications such as CA Intermediate level, MPhil, ICWA, CFA, CAIIB, LLB, CS, PhD, PG, Licentiate/ Associate/ Fellowship of Life Insurance, Actuary, FFSI & FLMI (LOMA), or UPSC Civil Service Examinations.

Syllabus of CFP

The syllabus of a CFP course covers the following topics/modules:

• Investment Planning
• Retirement and Tax Planning
• Risk and Estate Planning
• Integrated Module: Combination of 3 Specialist Certifications and a CFP Certification

Also Read – An In-depth Overview of The CFP Syllabus

Examination Pattern

All in all, there are 5 examinations to qualify for the CFP certification. Exams 1 to 4 are designed to gauge a candidate’s proficiency in multiple areas of financial planning. If the candidate fails to pass these examinations, they will be unable to sit for the final paper i.e. paper 5.

To be eligible to sit for the exams, a candidate must have completed the coursework and registered for the examination through FPSBI’s website.

Also, the difficulty level of the CFP Exam is moderate. As per the CFP Board (2024), the passing rate of CFP Exams is 65%. That means, if you aspire to be a part of this statistic, you need to put in a lot of work and dedication.

Work Experience

CFP is a prestigious certification and a person holding the same must not just have theoretical knowledge but also real-world work experience. Thus, CFP Professionals are required to either complete 6,000 hours of relevant financial planning work or 4,000 hours of approved apprenticeship. To achieve this, you can work with clients, NGOs, CAs and so on.

Cost of CFP Certification

To earn a CFP Certification, you can safely expect to spend around 1.5 to 2 lakhs.

Here’s a quick breakdown of the expenses:

• Coaching Fees: The CFP Coaching at IMS Proschool costs Rs 40,000 (online) and Rs 50,000 (offline).
• Registration Fees: The registration of FPSB is around Rs 18,000. However, there are discounts available for early birds whereas a penalty is levied for the late comers.
• Exam Fees: Exams 1-4 may cost you Rs 6,500 (per exam per attempt) whereas the final level may cost you Rs 13,000.
• Certification Fee: A CFP Certification fee of Rs 8,600 needs to be paid annually.

Please note that this fee structure is subject to change at FPSB’s discretion.

Also Read – The Cost of Becoming a Certified Financial Planner (CFP) in India

Job Profiles After Getting CFP Certification

CFP professionals with their knowledge and expertise in financial planning can find a lot of job opportunities in different sectors within and beyond the country. A few of the job roles that they can take up are mentioned below:

• Financial Planner/Advisor: As per Ambitionbox, on average a financial planner earns Rs. 4.4 LPA in India. A financial planner offers a bunch of personalised financial services to clients ranging from investment planning to retirement and estate plans.
• Retirement Planner and Estate Planner: Although these tasks fall within the broad umbrella of financial planning, there are professionals with minute specialisations who can help clients solely with retirement planning or estate planning.
• Wealth manager: As per Ambitionbox, on average a wealth manager earns Rs. 7.3 LPA in India. High-net-worth individuals are in dire need of good CFP professionals who can help them grow financially.
• Insurance Advisor: As per Ambitionbox, on average an insurance advisor earns Rs. 2.9 LPA in India. If you aspire to step onto the corporate ladder, you can find a lot of opportunities for higher-level positions in banks and insurance companies as insurance advisors.
• Tax Consultant: Although CPAs and CFPs have different job roles, they can always collaborate to create tax-efficient investment strategies and minimise the tax liabilities of their clients.
• Corporate Trainer: As per Ambitionbox, on average a corporate trainer earns Rs. 8.5 LPA in India. For seasoned CFPs, academia and corporate training are emerging as another high-paying field to step into and carve a career for themselves.

Also Read – Here’s What CFP’s Earn In India In Different Job Roles

Responsibilities of CFP

The CFPs have to act in accordance with the ethical standards set by the CFP Board to keep their certification and licence intact. One of the major ethical goals of a CFP professional is to act as a fiduciary of clients. That means the CFP must work in the best interests of their clients.

A CFP is responsible for assessing all the assets of an individual including their cash, assets and liabilities, investment, properties, etc. Based on the client’s financial goals, a CFP must design plans and strategies that would ensure maximum returns and minimum losses. For instance, a client may want to create a robust retirement plan or ensure his/her child has access to the best education, a CFP can help realise these goals by advising or making the best investment on the client’s behalf.

FAQs

How long does it take to get the CFP Certification?

On average it takes anywhere between 1.5 to 2 years to complete the CFP course and earn certification. The duration of your journey is also impacted by the time you take to complete graduation, clear all the exams, earn relevant work experience and complete the online ethics course offered by FPSB.

What are the benefits of pursuing a CFP Certification?

A CFP certification can unlock a plethora of benefits including, but not limited to; comprehensive knowledge, access to higher-level posts in organisations, flexibility to work abroad, earn higher stipends, switch career paths, and more.