The various modules which the students have to study for CFP Certification Program are:
1. Module I – Introduction to Financial Planning
2. Module II – Risk Analysis & Insurance Planning
3. Module III – Retirement Planning & Employees Benefits
4. Module IV – Investment Planning
5. Module V – Tax Planning & Estate Planning
6. Module VI – Advanced Financial Planning
• Candidates studying through Regular Pathway do not have to appear for the Module I- Introduction to Financial Planning Examination.
• Challenge Status candidates only appear for the Module VI- Advanced Financial Planning examination.
Module I: Introduction to Financial Planning (ITFP)
This module would serve as an introduction to Financial Planning. The module would cover in detail the Financial Planner Competency Profile, the six step process which includes Financial Planning process, client interactions, general principles of financial management, financial mathematics, personal financial statements, cash flow and debt management, asset acquisition, FPSB India‟s Code of Ethics and Professional Responsibility and Model Rules of Conduct, and the regulatory environment related to the Financial Planning domain.
Module II: Risk Analysis and Insurance Planning (RAIP)
This module would cover the knowledge requirements relating to insurance needs and risk assessment of clients. It introduces students to various concepts and regulatory environment of insurance in India. The evolution process requires advice on decisions in selecting various types of insurance related to personal finance for clients. This includes protection against exposures to risks of mortality, health, disability, property, liability, and long term care risk.
Module III: Retirement Planning and Employee Benefits (RPEB)
This module would cover the knowledge of basic strategies towards achievement of objectives of a client of his/her post-retirement financial and other needs and ways to systematically build the required corpus. The knowledge and skills of exploring and constructing various retirement solutions such as income flow from a purchased annuity and/or a fixed asset as well as of retirement products available or devised/customized would be tested. For clients who are employees of an organization – government, quasi-government or private, the superannuation benefits eligible and their assimilation in retirement strategy would be required for a prospective CFP professional. The emphasis would also be on the process of wealth creation and its protection and liquidity aspects in the approaching years to retirement and in the post-retirement period.
Module IV: Investment Planning (IP)
This module would cover the critical knowledge of different asset classes and interplay amongst them, the products constituting such classes and their investment risk profile to enable the management of a client’s finances towards achieving various financial goals. The development of vital understanding of the basic risk profile of the client so as to astutely recommend appropriate asset allocation is a crucial area requiring mastery. Another aspect that needs sharp skills is the measurement of investment risk and returns, their analysis in portfolio evaluation and alignment to suit the financial goals. The awareness and knowledge of the regulatory environment of investment products and services is an essential domain.
Module V: Tax Planning and Estate Planning (TPEP)
This module would cover the knowledge requirements of Indian Tax System, specifically related to Direct Taxes and personal taxation. The tax treatment of the types of income such as agricultural, business, salary and the attendant exemptions and benefits need to be discerned. The emphasis is on tax efficiency of transactions at all stages, viz. structuring of emoluments, saving taxes within permissible limits as suited to long-term goals, investing, spending, gifting and transferring wealth. The knowledge of various business forms and related tax strategies is also covered. The Estate planning is emphasized not as a late stage requirement but a necessary succession arrangement always in place for all assets – fixed, physical and financial. The discerning knowledge of tax laws and succession laws and their compliance procedures is a rigid requirement of this module.
Module 6: Advanced Financial Planning
The final module builds upon the knowledge gained in the previous modules and incorporates all aspects of personal finance that are vital for developing a comprehensive financial plan. Students are taught the steps necessary for collecting and evaluating client data, developing, recommending and executing appropriate strategies and also important aspects related to ongoing monitoring and evaluation of financial plans. Review of the legal, ethical and regulatory issues affecting financial planners is also covered.