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CFP : FINANCIAL PLANNING TO MAKE APPROPRIATE INVESTMENT DECISION
CFP:Financial Planning:career scope|course|cfpindia|cfppune
CFP:CFP : FINANCIAL PLANNING TO MAKE APPROPRIATE INVESTMENT DECISION
IMS Proschool imsproschool1@gmail.com
Thus, 18 June 2009 07:54:50
Financial Planning:- 8000+ Stocks, 1000+ Mutual Fund Schemes; Equity, Debt,
Commodities and Real Estate; Investment, Insurance, Taxation and Estate planning. You can help your client sift through these ever increasing and complex choices. You can grow wealth for
your clients and for yourself by building expertise in the financial planning process. IMS Proschool has trained over 6,000 industry practitioners and emerged as the most preferred
education providers for financial planning. With the best study material, quality training
and flexible training options we are best placed to help you get qualified in Financial
Planning. Benefits of Financial Planning Education Financial Planning education imparts the
requisite knowledge and skill-set, that enables you to provide quality advice to your
client on a consistent basis and create wealth for your client’s in the long run. 1. You
would know the tax benefit opportunities for your client based on his residential status As
a financial advisor you will know how the tax liability of your client, who needs to go abroad for job requirement, would change if he travels before or after 29 September in any
year.
If he travels before the said date he would become NRI for tax purpose for the relevant AY and would not pay taxes on the income earned abroad. And in case he travels after
the said date he need not pay tax on the income earned in India and abroad. Tax planning involves utilizing exemptions, deductions, rebates and relief’s provided in the Income tax Act.
2. You would know the advantage of paying the EMI in beginning of the month viz a viz end of the month You can save lot of money for your client by a simple advice to pay EMI for a housing loan in the beginning of the month. Consider a Housing loan of 30 lakhs for 20 years at 11 %, if you choose to pay EMI at the end of the month you would pay 67000 more which is over 2 % of your loan amount ! Time value of money concepts in financial planning helps you to analyze and compare different cash flows and choose the most beneficial set of cash flows to pay or receive.
3. You will be able to calculate the exact retirement corpus that one would need for peaceful retirement. Let’s take a case of a person who has expenses of 3 lakh per annum today, he would need a retirement corpus of 1.70 crore (assuming inflation of 5 % and rate of return of 9 %). Retirement planning assumes importance because of people’s inability to earn in sunset years, inflation and lack of social security. Financial planning helps you work out how much to invest for your sunset years to be truly blissful. <BR>
4. Client’s look for growing their net worth every year, your advice would enable them to enhance their net worth year on year. With Personal Financial Planning tools like – Discipline, Diversification and Investments in accordance with clients risk appetite you can ensure your clients growth in net worth year after year and extremely satisfied clients.
5. You will be able to analyze and rank the Top 10 mutual funds out of the 1500+ schemes available? Most people select MF funds on the basis of past Month / year’s performance. Chasing recent performance could prove tricky because it could be an aberration. Financial Planning
emphasizes to track investments like Mutual funds over 5/7/10 years along with Fund managers expertise, experience and his association with the fund. Further one needs to check out if the objective and investment strategy of the fund matches the investor needs. Other parameters like
expense ratio, turnover ratio and trategy of the fund matches the investor needs. Other parameters like expense ratio, turnover ratio and standard deviation also needs to be considered.
6. Insurance is must and a necessary expense (not an investment or Tax saving instrument as projected). With Financial Planning, you will be able to help your client reduce his insurance expenses and at the same time enable him to cover all the risks. Insurance is the most misunderstood concept. It is looked upon as a tax saving or an investment tool. Insurance is an economic tool to transfer the risk. Taking Life Cover more than needed is a waste of precious resource and underinsurance could put the family of deceased to hardship. Further it needs to be assessed if insurance is required for property & other valuables and professional negligence. Financial planning teaches you “How to plan for your client’s insurance requirement”.
7. Financial Planning will enable you to make appropriate investment decisions for your client. If your client looses his sleep over investment decisions, there has been a misinterpretation of your client’s risk taking ability. Financial Planning lays a strong emphasis on appropriate risk profiling. It involves both quantitative and qualitative analysis for before zeroing on a customers risk profile.
8. One single solutions to all your clients is a disaster. Financial Planning equips you in providing different solutions to different client based on his need. Have you been trying to sell Mutual Funds or Insurance products to all your client’s – be it someone who is young and just started his career or middle aged person who has worked for ample years or a person who is retired?Well if so, you must have had low sales conversion and dissatisfied clients. There is a need to shift focus from product sales to a solution provider. You need to understand the financial goals of the client and work towards achievement of the same through a financial plan.
9. Enables you to face the challenge of ever demanding clients. Client’s today have ready access to information on financial products & services via various sources – media, television, internet & print. The awareness level of investors is increasing with respect to the working and benefits of the various products & services available in the market.
Therefore it is becoming increasingly difficult to practice on “only commission” model. Financial planning widens your scope of services and enhances your knowledge and skill set enabling you to switch to a “commission + fee” or “pure fee” model.
In this model, financial planning becomes the core of advisory services and products become the means to achieve the plan.
10. Increase your clientele – how many of your clients have recommended your service to their friends and family? If a client recommends you to others, it speaks of your quality of advice and the relationship you share with your clients. But if they don’t, you need to do a bit of self introspection and figure out where are you lacking? trategy of the fund matches the investor needs. Other parameters like expense ratio, turnover ratio and standard deviation also needs to be considered. Requirements for CFPCM Certification There are two ways to obtain CFPCM Certification:
1.Regular Way
2.Challenge Status for professionals
Both require candidates to fulfill certain criteria for acquiring CFPCM Certification. Requirements for Regular way
1.Education: Candidate must be atleast a 12th Std Pass/Equivalent. The candidate should undergo the training program with FPSB India’s approved Education Providers. Education criterion demonstrates to the public that the candidate has acquired the necessary knowledge to become a Financial Planner.
2.Examination: The candidate has to pass the CFPCM certification exam i.e. he has to clear all the five papers viz. Risk Management & Insurance Planning, Retirement Planning & Employee Benefits, Investment Planning , Tax Planning & Estate Planning and Advanced Financial Planning. By passing the CFPCM Certification Examination, the candidate demonstrates to the public that he/she has the required level of competency to practice Financial Planning.
3.Experience: The experience criterion builds confidence in public that the candidate understands the counseling nature of personal financial planning. The candidate has to complete 3 years of work experience either pre or post Certification exam in case he/she is a graduate. In case of non graduates the criteria is six years of work experience.
4.Ethics: On completion of the education, examination and experience requirements, the candidate has to sign declaration for adherence to FPSB India’s Code of Ethics & Rules of Professional Conduct. know more Requirements for Challenge Status Students who are already professionals for example Chartered Accountants, MBAs, ICWA, etc and are interested in acquiring the CFPCM certification can do so in a shorter span. FPSB India recognizes that these professionals already have some of the skill sets that are required in a Financial Planner.
Hence, it has introduced the “Challenge Status Program” which enables professionals (both in terms of education as well as experience) to acquire the CFPCM Certification in a more time efficient manner. 1.Education: A candidate must be a CA, CFA (US), ICWA, CAIIB, CS, LLB, PhD, M.Phil, PG, Licentiate/ Associate/ Fellowship of Life Insurance, Actuary, FFSI & FLMI from LOMA, Civil Service Examinations by UPSC.
2.Examination: The candidate has to clear only Paper 5 i.e. the Advanced Financial Planning paper.
3.Experience: The candidate should have work experience of 3 years in Financial Services Industry prior to the CFPCM Certification Exam. In case the candidate is working in a Non- Financial Industry the work experience should be 5 years prior CFPCM certification exam.
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