Chartered Financial Planner (CFP) certification

Introduction to the Chartered Financial Planner (CFP) certification :

The CFP certification is conducted by the Financial Planning Standards Board (FPSB Ltd.), based in the U.S. FPSB India is its Indian counterpart that manages and conducts the program in India. The CFP is recognized in over 24 countries and is one of the best-known certifications in the financial planning domain. It focuses on a variety of topics along the personal finance angle such as the time value of money, risk and insurance planning, retirement planning, estate planning, taxation planning, etc. So, if you are interested in the area of personal finance or investment planning, then this is the right certification for you.

There are two ways of doing this certification:
1)  The Regular Program in which the syllabus is spread over 5 exams
    a. Eligibility is open for anyone who has cleared Std. 12th / HSC 
    b. Work experience is not mandatory to apply
    c. You can choose to register via self study or by choosing an Education Partner (these are institutes that are approved by the FPSB to conduct CFP training, visit their website for more information)
2)  The Challenge Status Program which has just one exam that covers the entire syllabus. To be able to apply under this program you have to meet certain criteria:
    a. You should have a post graduate degree / CA / MBA or CFA or other degrees as mentioned here
    b. You also need work experience of 3-5 years before applying for this program
Once you clear the exams, you can sign the Code of Ethics, be a certified CFP and use the trademark CFP Marks.
If you take up the Regular Program, to use the CFP Marks (the trademarks), you have to acquire work experience of 3-5 years (depending on whether you are a graduate or not). Once you are certified, you join the ranks of other CFP professionals, forming an elite network of qualified financial planners.

Who should do a CFP?

A CFP is apt for you if:
1) You are interested in pursuing financial planning as a career
If you are sure about pursuing this as a career, then there should be no looking back. Doing this program will give you the necessary knowledge as well as give you the visibility when it comes to recruitment. Even if you are working in some other financial field, doing a CFP can open doors to financial planning firms

2) Your work needs you to know various investment instruments, taxation etc. in the Indian context
If you are an RM for a bank / investment management firm then understanding regulations, taxation issues and general financial instruments and investment planning is vital. This knowledge can be a great tool in your repertoire and help you come across as knowledgeable and boost your clients’ confidence
3) You want to understand personal finance and investment planning for your own needs
If you want to make your money grow, don’t want to rely on others for it and have the needed time for this effort, then understanding the nitty-gritties of financial planning can give you the firepower you need!

Skills required for CFP

1) Good grasping power: 
The syllabus is vast and requires a lot of practice. It helps if the candidate is a fast reader and has a good grasping ability.

2) Quantitative ability:
CFP syllabus is very numerically strong and can sometimes be tedious with its long calculations. Strong quantitative skills are beneficial

3) Multi-tasking: 
Most candidates complete this course along with other studies or while doing a full time job, so they must be able to multi-task and find time for exam preparation

4) Diligence and Discipline:
The program is spread over 5 exams (for regular format) and hence requires regularity and diligence on the part of the candidate to keep up the momentum. The onus of scheduling the exam lies on the student, so the more diligent you are, the faster you can finish the program 
A lot of candidates have benefited from enrolling in coaching institutes to help them understand tough concepts, manage their study time and practice mock tests. Having regular discussions with a peer group also greatly helps in understanding complex topics.

Career opportunities after CFP:

CFP is a premier certification in the world of financial planning and CFP holders are hired across various firms for their expertise in investment planning:
• Banks
• Financial Planning firms
• Asset Management companies
• Brokerages
• Insurance firms
• Distribution houses

Details of the program:

• The subjects are split into 6 modules:
  o  Module I - Introduction to Financial Planning 
  o  Module II - Risk Analysis & Insurance Planning 
  o  Module III - Retirement Planning & Employee Benefits 
  o  Module IV - Investment Planning 
  o  Module V - Tax Planning & Estate Planning 
  o  Module VI - Advanced Financial Planning

Exam format: 
• The exams are conducted using computers and not pen and paper
• Regular Program: 
  o  Exams 1-4
     • Each exam is 2 hours each
     • Each exam focuses on one of the modules from Module II to V and additionally also has 20% of the questions from Module I. Example: Exam 1 will have 80% questions from Module II and 20% from Module I; Exam 2 will have 80% questions from Module II and 20% from Module I and so on
     • All multiple choice questions where you have to choose one out of four, no penalty
  o  Exam 5
     • 4 hour long exam
     • Based on Modules I to VI 
     • Case based multiple choice questions, no penalty
     • Challenge Status Program: 
  o Same as exam 5 above

Registration body
The CFP Board

Fees (Do confirm with the FPSB website for the latest fee):
• Regular Program:
  o Registration fees: Rs. 11,236
  o Exams 1- 4:  Rs. 2,247.2 per exam per attempt
  o Exam 5: Rs. 5,618 per attempt
  o After clearing, CFPCM Certification Fees: Rs. 5,618 (to be renewed annually)
  o The above fees are for the Self-study mode without study material. Additional amount may need to be paid to procure study material and in case of applying through an Education partner
• Challenge Status Program:
  o Registration, Admin and processing fees (FPSB) is Rs. 19,101 or if using Education Partner then Registration, Admin and processing fees is Rs. 16,854
  o Study Material: Rs. 4,500

Exam dates:
• The exams can be scheduled based on the candidate’s convenience subject to availability
• Exams are conducted every day except Sunday

Materials to bring to exam:
• Admission ticket
• Calculator 
• Smartphones or smart watches are not allowed

Interview with Abhishek Somani, CFP, who shares his experience of the CFP exam

Proschool : Why did you take up CFP?
Abhishek : In 2006, I was working with Max New York Life Insurance. Before that, I had worked for ICICI Prudential Life Insurance. I wanted to broaden my career opportunities to all sub - verticals in the BFSI sector with a final goal of entrepreneurship. CFP was a great fit for both these objectives. I got a thorough understanding of all aspects of personal finance during the course

Proschool : How tough is it? How many hours of study are required? What was your study plan?
Abhishek : 2 hours per day of dedicated studies for 6 to 8 months is required to clear the exam. Please note that studying for 12 hours in 1 day and doing nothing for next 5 days does not work. Regular practice is very important. The course is not tough for anyone who commits to regular practice

Proschool : Challenges you faced
Abhishek : Not many coaching options were available that time

Proschool : How has it helped you?
Abhishek : CFP is useful across the financial services sector and also helped in starting off my own advisory services. Today I am teaching as well as doing Financial Planning. So, it has had a big impact on my career