A Detailed Guide On CFP Certification

What is a Certified Financial Planner?

The CFP Certification is the leading Certification globally in the field of Financial Planning with over 1,70,000 Certificates. It is popular in more than 26 countries across the world including India. For those looking for a career in the financial services sector, CFP Certification in India provides a definite edge over other candidates. Consumers, professionals & industry widely respect it.

As you are already briefed on the concept, let’s drill down a bit deeper. A CFP is a certified professional that provides financial planning services to people. Today, there are a lot of financial tools like insurance, income tax, real estate investments, etc.

It can be tough for a person with a job or a business to manage all of them. This is where a CFP comes into the picture. A certified financial planner is trained to assist people in areas like risk management, insurance, real estate planning, tax planning, retirement planning, and more.

They are meant to understand the needs and financial status of the clients and devise a personalised financial plan for them. This financial plan is supposed to serve the clients throughout the projected period without fail.

Though the responsibilities of a CFP will be elaborated in detail further, here is a quick brief-up of the same.

• A certified financial planner gathers all the necessary information like assets, liabilities, income, etc.
• They analyse your financial strengths and weaknesses.
• Its their job to formulate, implement, and monitor the financial plan.
• They provide you with the required financial education on how to save and budget your money.

Benefits of doing CFP

• Most Recognized qualification in the field of Financial Planning & Wealth Management
• Increased your chances of getting employed at Wealth Management, Financial Planning  Firm, Banks , Mutual Fund
• Improves career progression as most banks become universal banks and expect you to have knowledge of mutual funds, insurance, taxation besides core banking products
• Boost your own advisory services since CFP communicates credibility and knowledge

Who Should Choose CFP, and What Are its Eligibility Criteria?

CFP is a professional course that is usually chosen by those who want to become professional financial advisors. Though it can be done in as minimal as six months, it is best to go for a two-year certification for a professional job.

Now, no matter if you want to get a job as a CFP or begin your own investment firm, you need to satisfy the eligibility criteria of the CFP. First of all, there are two pathways to getting the CFP certification. Let’s move on to the following section and study the eligibility criteria for both.

Pathways of CFP Courses and their Eligibility Criteria

Ideally, there are two pathways to CFP certification.

• Normal Pathway
• Challenge Status Pathway

Regular or normal pathway: The normal pathway is the one in which the students enrolled in the bachelor’s degree can apply for the program. In the regular pathway method, you are required to pass the initial 4 NSE exams. After passing these exams, you can proceed further and take the fifth exam for advanced financial planning.

Challenge Status Pathway: Just like its name, the challenge status pathway is a bit off-beat. In this pathway, you are only required to clear the fifth exam of advanced financial planning. However, there is a condition for that. The candidate needs to possess relevant job experience prior to taking the exam.

Both of these pathways are genuine ways to obtain CFP certification.

What are the Various Job Responsibilities of a CFP?

As described, being a CFP is a job of responsibilities. As the process of becoming a CFP is long and takes a lot of time, the responsibilities are more too. As a certified financial professional, you are entitled to the following responsibilities.

Financial Status Analysis

One of the core responsibilities of a CFP is to analyse the client’s financial status. The planner considers every financial aspect, including income, expenses, liabilities, assets, financial goals, etc. Based on these aspects, an analysis of the weaknesses and strengths is done.

Suggest Financial Opportunities

As a CFP, you are entitled to offer or suggest financial plans or opportunities to your clients. For example, you can inform your clients about investment schemes like insurance plans, stock investments, bank tools, etc.

Develop Plans

Since you have all the necessary information on the client’s finances, you can make better investment and savings plans for them. Based on the goals of your clients and the level of risk they can take, you can devise financial plans for them. This can include retirement plans, investment plans, tax strategies, and estate planning.

Implement and Customise Plans

Being a professional CFP, you are responsible for implementing the devised plans of your clients. For this, you need to maintain synced communication with various other people related to your client, such as investment advisor, attorney, accountant, etc. Keeping everyone in the loop will ensure proper implementation. Further, based on the future preferences of your clients, you are also entitled to customise the plans.

Keep your Knowledge Bank Updated

The financial sector undergoes changes pretty abruptly. Therefore, it is necessary to keep your knowledge updated at all times. Being a CFP, you are entitled to stay updated with the changing practices, regulations, and other financial products.

What are the Skillsets Required to be a CFP?

More than clearing the exam is required to become a professional CFP. You need to develop certain skills to be the best financial advisor. Here is a brief overview of those skills.

• Communication: Communication is the number one skill you need to inculcate within you. Being a CFP is all about communicating clearly with your clients about upcoming changes and their financial plans. Ensure that you tell each and every detail of their financial plan clearly.

• Sales and marketing: A CFP is also responsible for selling financial products to its clients. Therefore, they must have the required sales and marketing skills.

• Relationship management: You, as a CFP, need to have interpersonal skills. It is important to nurture healthy relationships with your clients. Moreover, it is also critical to listen closely to them and work collaboratively.

• Self-motivation: No matter what you do, staying motivated is the key to doing things consistently and better.
• Long-term thinking: As a CFP, you need to have thoughtful long-term thinking. After all, you will be guiding your clients towards a better financial state. Hence, you need to possess long-term thinking that helps you and your clients.

Industry Trends

These are some of the new trends happening in the area of wealth management

• Global volume of net investable assets of HNI’s will be close to US $70 trillion by 2021
• India falls under the top 20 companies participating in this growth
• Digitization and transparency will be factors affecting wealth managers
• Out of all the types of businesses like family offices, traditional wealth managers  and independent wealth advisors there will be a new class known as the holistic wealth managers
• There will be more companies from abroad offering wealth management service in India, as the market in the developed markets become more saturated

How to become a CFP?

Although the process has been highlighted in the article discreetly, here is a more direct version of it.

• To begin your CFP journey, you need to earn a four-year bachelor’s degree in any discipline.

• After this, take the CFP course and complete it.

• Take and pass the CFP certification exam.

• Once your exam is complete, you need to gather work experience and meet the ethical requirements.

• When all of these steps are satisfactorily complete, you earn your CFP certification.

An Overview of the CFP Exam

To become a CFP, you have to pass five exams. The first four exams are 3 hours long (each), and each of them has 85 multiple-choice questions to answer. These exams are for Investment Planning Specialist Certification, Risk Management,  Real Estate Planning Specialist Certification, Retirement and Tax Planning Specialist Certification.

The fifth exam is for Advanced Financial Planning, which is three hours long, and there are 85 questions to answer.

The syllabus for these exams is divided into six modules, everything related to financial planning. The syllabus includes subjects and topics related to risk analysis, insurance planning, retirement planning, investment planning, tax planning, real estate planning, etc.

The CFP Certification Course

Before you take the exam, you need to complete the CFP course, which has four levels.

• CFPC Investment Planning Specialist
• CFPC Retirement and Tax Planning Specialist
• FPSB Risk and Estate Planning Specialist
• FPSB Integrated Financial Planning Course

You have to study each of them one by one and clear exams to go further.

Practical Experience for CFP Certification

CFP certification requires some type of practical experience. You can gain it in two ways. You can either take the 6000 hours standard pathway or the 4000 hours apprenticeship pathway. To meet these time conditions, you can either engage with clients directly or teach financial planning or related courses.

Fees Structure

The fee structure for the CFP exam in India is as follows!

Syllabus

Exam Details

Scope of CFP in India and Abroad 

Well, the scope of CFP in India and abroad is wide. Let’s analyse some of the critical aspects of CFP and why go for it.

• You can save more and earn more: One of the top perks of CFP in India is financial stability. With the CFP course, you learn a lot about financial planning, which is why you can manage your finances well. Hence, you save more. On the other hand, a CFP earns around five Lakhs to over eight lakhs per year. The salary varies based on experience and specialisation.

If we talk about the US, the average salary of a CFP is $121,099 per year.

• Competitive edge: Though you can work independently with a CFP certification. If you want to stand out for a job, a CFP certification can be a great addition to your CV. Around 83% of CFP professionals say that they got a competitive edge over other financial advisors with CFP.
• Opportunity to work nationally and internationally: CFP certification is a course recognised in over 25 nations worldwide. Hence, you can work in top multinational companies in these nations. In India, HDFC, ICICI, Axis Bank, LIC, Kotak Life, and many other financial institutions hire CFPs to streamline their operations.

If we talk about overseas firms, Amazon, JPMorgan Chase, Goldman Sachs, Vanguard, Bank of America, etc., hire CFPs. If getting and working in a job is not your way, you are free to start your own investment firm. Having a CFP certification can help you build credibility and reputation.

 Important Update

• CFP certification qualification in India is now directly handled by Financial Planning Standard Board Ltd. US.
• Legacy program (old) enrollment ends on 31 May 2020, and students enrolling on or after 1 June 2020 will have to enrol in the new program.
• Important dates on which respective Tracks will be activated. Students can enrol for those tracks:
  • FPSB^® Investment Planning Specialist Certification(starting 1 June 2020)
  • FPSB^® Retirement and Tax Planning Specialist Certification (starting August 2020)
  • FPSB^® Risk Management and Estate Planning Specialist Certification(starting September 2020)
  • CERTIFIED FINANCIAL PLANNER Certification (starting October 2020)
• Before apply for any certificate, i.e. for track exam certificate or final CFP candidate needs to pass FPSB Ltd.’s online Ethics Course

How can IMS Proschool help you become a successful CFP?

If you want to become a CFP, IMS Proschool is your ideal choice. We are an official learning partner of FPSB that can provide you with a comprehensive CFP course both offline and online. As the position of CFP is reputed, we ensure that each of our candidates is proficient in handling the job responsibilities when they clear out. We have a pass percentage of 65%. Our courses are of over 300 hours that include well-formulated mock tests and quizzes.

If you are up for the role, contact IMS Proschool and live your dream of being a CFP.