Elaborate CFP Course Contents-long

8/4/2019 Elaborate CFP Course Contents-long

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Syllabus & ReferencesFor

CFP Certification Program

MODULE: 1

COURSE TITLE: Introduction to Financial Planning

COURSE DESCRIPTION:

This module would serve as an introduction to financial planning. The module would coverthe six-step process which includes financial planning process, client interactions, time valueof money applications, personal financial statements, cash flow and debt management,asset acquisition, education planning, overview of risk management investment planningand retirement planning, special circumstances, plan integration, ethics, and businessaspects of financial planning.

LEARNING OBJECTIVES:

At the end of this module, a student should be able to:

1. To implement the financial planning process, while following the CFP BoardsFinancial Planning Practise Standards and Code of Ethics and ProfessionalResponsibility.

2. Understand the economic, social, political, and technological environment and beable to determine how financial plans should accommodate those environments.

3. Understand the potential goals a client may have, help them enunciate their goalsand evaluate strategies to help clients achieve their goals.

4. Understand basic investment topics (including investment types, risk and return,diversification, passive versus active management) and specific investment

strategies necessary to allow clients a mechanism to achieve realistic goals.5. To structure and choose the optimal business format for the delivery of financial

planning services for services for specific for specific target client markets.

DETAILED CLASS OUTLINE:

Financial Planning Process

1. Establishing client- planner relationshipsa. Explain issues and concepts related to overall financial planning process, as

appropriate to the clientb. Explain services provided, the process of planning, documentation required,

and disclosure statementsc. Clarify clients and CFP licensees responsibilities and complaint handling

mechanisms2. Gathering client data and determining goals and expectations

a. Obtain information from client through interview/questionnaire about financialresources & obligations

b. Determine clients personal and financial goals, needs and prioritiesc. Assess clients values, attitudes and expectationsd. Determine clients time horizonse. Determine clients risk tolerance level

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f. Collect applicable client records and documents3. Analyse Client Objectives, Needs and Financial Situation

a. Analysis of relevant informationb. Need for specialist advicec. Issues that require further clarification

4. Developing appropriate strategies and presenting the financial plan

a. Client's risk toleranceb. Assessment of optionsc. Research, analysis and modellingd. Draft financial plane. Presenting and reviewing the plan with the clientf. Collaborating with the client to ensure that plan meets the goals and

objectives of the client, and revising as appropriate5. Implementing the financial plan

a. Assist the client in implementing and recommendationsb. Coordinate as necessary with other professionals, such as accountants,

attorneys, real estate agents, investment advisors, stock brokers andinsurance agents

6. Monitoring the financial plana. Monitor and evaluate soundness of recommendationsb. Review the progress of the plan with the clientc. Discuss and evaluate changes in clients personal circumstances, (e.g., birth/

death, age, illness, divorce, retirement)d. Review and evaluate changing tax law and economic circumstancese. Make recommendations to accommodate new or changing circumstances

General principles

7. Regulatory requirements for CFP certificantsa. Registration and licensingb. Sources of informationc. Other relevant legislature requirements

8. Ethical and professional considerations in financial planninga. The Code of Ethics and Professional Responsibilityb. CFP licensees responsibilities to the public, clients and employersc. Client agreements and confidentiality clausesd. AFP Practice Standards

9. Assessment of risk and client behavioura. Client attitudesb. Client knowledgec. Client behaviourd. Health of cliente. Occupationf. Hazardous activities

10. Cash flow planninga. Short term cash flow planning

b. Cash budgetingc. Preparing monthly household budgetsd. Long term cash flow planning

11. Budgetinga. Forecastingb. Cash managementc. Emergency fund planningd. Debt management/ users of debte. Liquidity

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f. Monitor and evaluate budgetsg. Compliance

12. Personal use asset managementa. Home equityb. Types of mortgagesc. Buy vs. lease

d. Refinancinge. Hire- purchase, etc.f. Consumer loansg. Credit cards

13. Personal Financial Statement Analysis14. Financial Mathematics

a. Calculate and interpret time value of moneyb. Calculation of annuitiesc. Loan repayment scheduled. Inflation- adjusted interest rates

15. Economic environment and indicatorsa. Inflation/ deflationb. Interest rates/yield curvesc. Equity investment and real returnd. Government monitory and fiscal policye. The impact of business cyclesf. Key Indicators lagging, concurrent and leadingg. Financial institutions

16. Forms of business ownership/ entity relationshipsa. Sole proprietorshipsb. Partnershipsc. Limited liability companiesd. Trustse. Foundations/ exempt organizationsf. Professional associations/ corporationsg. Cooperative societiesh. Others

17. Ways of taking title to property (sole, joint, community, etc.)a. Characteristicsb. Implications

18. Legal aspects of financial planninga. Contractsb. Negotiable instrumentsc. Tortsd. Professional liabilitye. Fiduciary responsibilityf. Agency lawg. Consumer protectionh. Investor protection

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PROPOSED REFERENCES:

Professionally Based Books (Compulsory-Any one book)

S.No.

Title Author Publisher PriceUS$

1 Personal Finance #1 Jack R. Kapoor,Les R. Dlabay,

Robert J. Hughes

McGraw-Hill HigherEducation

99.75

2 Financial Planning PracticeStandards

CFP Board CFP Board

3 Introduction to FinancialPlanning DFP1

Financial PlanningAssociation ofAustralia Ltd.

Financial PlanningAssociation ofAustralia Ltd.

4 Fundamentals of FinancialPlanning

David M. (Ed.) M.Cordell

American College 101.50

5 Practicing Financial Planningfor Professionals #2

Sid Mittra,Jeffrey Kirkman,George Seifert

Mittra Kirkman &Associates

69.95

6 Personal Financial Planning:Theory and Practice

Michael A. Dalton,Randal Cangelosi,

Randall Guttery,Scott A. Wasserman,James F. Dalton

Dalton Publishing,LLC

93.00

7 Introduction to FinancialPlanning (for CFP 1)

R. Robert Rackley InsuranceAchievement,Incorporated

Primarily Consumer Based Books (Optional)

S.No.


1 Personal Financial Planning #3 LawrenceJ.J. Gitman,

Michael D.Joehnk

South-Western 114.9

52 Personal Finance Jeff Madura Addison Wesley 114.00

3 Personal Finance - Workbook Arthur Keown Pearson 36.00

4 Ernst and Young's PersonalFinancial Planning Guide: TakeControl of Your Future andUnlock the Door to FinancialSecurity #4

Ernst & Young, RobertJ. Garner, Robert B.Coplan, Barbara J.Raasch, Ratner

Wiley, John & Sons,Incorporated

4
http://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Jack+R.+Kapoorhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Les+R.+Dlabayhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Robert+J.+Hugheshttp://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=BQv16dq1l8&isbn=0943590701&itm=7http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=BQv16dq1l8&isbn=0943590701&itm=7http://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=David+M.+(Ed.)+M.+Cordellhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=David+M.+(Ed.)+M.+Cordellhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Sid+Mittrahttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Jeffrey+Kirkmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=George+Seiferthttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+A.+Daltonhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Randal+Cangelosihttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Randall+Gutteryhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Scott+A.+Wassermanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=James+F.+Daltonhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=R.+Robert+Rackleyhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Lawrence+J.+J.+Gitmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Lawrence+J.+J.+Gitmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Lawrence+J.+J.+Gitmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Lawrence+J.+J.+Gitmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Lawrence+J.+J.+Gitmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+D.+Joehnkhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+D.+Joehnkhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+D.+Joehnkhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+D.+Joehnkhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Arthur+Keownhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Jack+R.+Kapoorhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Les+R.+Dlabayhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Robert+J.+Hugheshttp://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=BQv16dq1l8&isbn=0943590701&itm=7http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=BQv16dq1l8&isbn=0943590701&itm=7http://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=David+M.+(Ed.)+M.+Cordellhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=David+M.+(Ed.)+M.+Cordellhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Sid+Mittrahttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Jeffrey+Kirkmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=George+Seiferthttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+A.+Daltonhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Randal+Cangelosihttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Randall+Gutteryhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Scott+A.+Wassermanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=James+F.+Daltonhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=R.+Robert+Rackleyhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Lawrence+J.+J.+Gitmanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Michael+D.+Joehnkhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Arthur+Keown


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Additional Reading/s (Optional)

S.No.

Journal/s

1 Journal of Financial Planning

2 Journal of Financial Services Professionals3 Journal of Financial Counseling and Planning

S.No.

Magazine/s

1 Financial Planning2 Financial Services Review

PREVIEW:

#1 Personal Finance ( Jack R. Kapoor, Les R. Dlabay, Robert J. Hughes) :- providescomprehensive coverage of personal financial planning in the areas of money management,career planning, taxes, consumer credit, housing and other consumer decisions, legal

protection, insurance, investments, retirement planning, and estate planning.CONTENTS

1. Introduction2. Personal Career Strategies3. Money Mgt. Strategies4. Tax5. Banking Services6. Intro to Consumer Credit7. Choosing Credit8. Consumer Strategies & Transportation Costs9. Housing10. Home and Auto Insurance11. Health Care & Disability

12. Life Insurance13. Fundamentals Of Investing14.Stocks15.Bonds16. Mutual Funds17. Real Estate & others18. Retirement19.Estate

#2 Practicing Financial Planning for Professionals (Sid Mittra) ;- Discusses theimpact of retirement, and how to successfully prepare for it, Devotes an entire chapter totax planning and sophisticated tax strategies, Explores key concepts and strategies ofinvestment planning, including asset allocation, Covers risk management strategies of

insurance planning, including life, disability, health, and long term care , Explains principlesof estate planning and examines advanced estate planning strategies , Explores the keyaspects associated with divorce and death , Underscores time value of money and creativeuse of calculators in financial planning , Presents universally acclaimed methods of practicemanagement , Discusses the impact of September 11 (2001) disaster on the investment.

#3 Personal Financial Planning (LawrenceJ.J. Gitman, Michael D.Joehnk) :- Newedition of a time-tested text first published in 1978, for use in a first college course on thesubject as well as by individuals developing their own financial plans. Addresses the basics

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of planning and of managing assets, and includes coverage of credit, insurance,investments, and retirement and estate planning.

CONTENTS

1. Foundations of Financial Planning

2. Understanding the Financial Planning Process

3. Measuring Your Financial Standing4. Planning Your Financial Future

5. Managing Your Taxes

6. Managing Basic Assets

7. Managing Your Savings and Other Liquid Assets

8. Making Housing and Other Major Acquisitions

9. Managing Credit

10. Borrowing on Open Account

11. Using Consumer Loans

12. Managing Insurance Needs

13. Insuring Your Life

14. Insuring Your Health

15. Protecting Your Property

16. Managing Investments

17. Investing in Stocks and Bonds

18. Making Securities Investments

19. Investing in Mutual Funds, Real Estate, and Derivative Securities

20. Retirement and Estate Planning

21. Meeting Retirement Goals

22. Preserving Your Estate

#4 Ernst & Youngs Personal Financial Planning Guide: This practical andcomprehensive book covers all the basics of financial planning: setting goals, buildingwealth, protecting finances, and passing it all to one's family. It also approaches financialplanning from a unique "life event" perspective, offering easy-to-implement tacticsespecially designed to meet financial goals associated with such events as getting married,raising a family, starting a business, and divorcing. 70 charts, tables, worksheets. As iscommon with financial planners, this one, written by staff at one of the Big Six accountingfirms, covers such things as determining net worth, setting up and following a budget,accumulating assets (most importantly by developing the savings habit), and stocks, bonds,mutual funds, and cash equivalents. It explains investment risk and return; home buying andselling; the various types of insurance (life, home, health, car, and disability); the financialconsequences of marriage, prenuptial agreements, and divorce; paying for college; andestate planning. The work is unique in a couple of areas: it covers starting a businessespecially thoroughly and bases planning on a "life event" perspective-gearing the planningto the goal. Unfortunately, in common with other financial planners, it virtually ignoressingles.

*****

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MODULE: 2

COURSE TITLE: Risk Analysis and Insurance Planning

COURSE DESCRIPTION:

This module would cover the knowledge requirements relating to insurance and riskmanagement for a CFP certification. It introduces students to risk management andinsurance decisions in personal financial planning. Planning for clients exposures tomortality, health, disability, property, liability, and long term care risk is emphasized.



1. Understand the role of the financial planner in the personal risk managementprocess.2. Implement insurance into a comprehensive, integrated financial plan.3. Identify and explain features of private and public insurance available to meeteach identified need.4. Integrate the tax implications into insurance decisions.5. Evaluate client insurance and risk management needs.

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Risk Management

1. Introduction to Risk Managementa. Meaning of risk

b. Basic categories of riskc. Types of pure riskd. Property riske. Liability riskf. Methods of handling risk

2. Insurance and Riska. Basic characteristics of insurance pooling of losses, risk transfer,indemnificationb. Requirements of insurable risksc. Difference between insurance and gambling or hedgingd. Benefits and costs of insurance to societye. Advantages and disadvantages of insurance in handling risks

3. Risk Management Process

a. Meaning and objective of risk managementb. Steps in personal risk managementc. Risk control and risk financingd. Insurance market dynamics and the underwriting cyclee. Loss forecasting using probability and regression analysis, loss distributions, law

of large numbers

Insurance Concepts

4. Legal principles in insurancea. Indemnityb. Insurable Interestc. Subrogation

d. Utmost good Faith (representation, concealment, and warranty)5. The Insurance contract

a. Requirements of an insurance contractb. Distinct legal characteristics of an insurance contractc. Basic parts of an insurance contractd. Meaning of insurede. Endorsements/ridersf. Common types of deductiblesg. Co-insurance nature, purpose and problemsh. Other-insurance provisions

6. Legal Liabilitya. Intentional Tortsb. Absolute Liability

c. Law of Negligenced. Special tort liability problemse. Civil justice system

Insurance Policies and Strategies

7. Identification of life, medical, householders, auto and other property and liability riskexposures

a. Gathering data on current insurances

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b. Identifying clients insurance needs life, disability and medical, property,liability, etc.

c. Analysis of current insurances8. Personal property and liability insurance

a. Householders insuranceb. Motor vehicles insurance

c. Motor vehicles insurance and societyd. Other liability insurancee. Personal umbrella policyf. Overseas and travel insurance

9. Life insurance needs analysisa. Human life approachb. Needs approachc. Capital needs analysis approach

10. Life insurance policy analysisa. Types of life insurance policiesb. Life insurance policy provisionsc. Life insurance policy ridersd. Types, benefits and risks of life insurance (including use of policy provisions and

riders)11. Life Insurance policy selection

a. Determining the cost of life insuranceb. Cost comparison methodc. Return on savings componentd. Taxation of life insurancee. Factors to consider while buying life insurance

12. Annuitiesa. Difference between annuity and life insuranceb. Types of annuitiesc. Taxation of individual annuitiesd. Individual Retirement Accounts (IRAs) in the international context

13. Medical insurancea. Medical expensesb. Types of coveragec. Determination of appropriate coveraged. Long term care insurancee. Personal accident / Disability-income insurancef. Special life insurance benefitsg. Factors to consider while buying medical insurance

14. Insurance of business riska. Key person insuranceb. Business assets and liabilities insurance

15. Implementing and reviewing clients insurancea. Advisor as first-line underwriterb. Completing application formsc. Frequency of review

d. Establishing and implementing changese. Handling claims and complaintsf. Ongoing review

Environment of an Insurance Advisor

16. Government regulation of insurancea. Insurance Regulatory and Development Authority (IRDA)b. The Insurance Act

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c. Laws regarding insurance companies in Indiad. Agents and brokerse. Agency law and procedures for becoming an agentf. Doctrines of waiver and estoppel

g. Functions of an agent, personal development and behavioural aspectsh. Code of professional ethics and advertisements

17. Insurance Pricinga. Objective of rate makingb. Definitions in rate makingc. Basis of rating in Indian contextd. Rate making in property and liability insurancee. Concept of tariff and market agreementf. Rate making in life insurance

18. Insurance Companiesa. Types of insurersb. Rate makingc. Underwritingd. Productione. Claim settlement

f. Reinsuranceg. Investmentsh. Financial reservesi. Selecting insurance companies


Professionally Based Books (Compulsory - one book amongst 1 to 4 plus one

amongst 5 & 6)

S.No.


1 Fundamentals of Insurance forFinancial Planning (3rd Edition)

Burton T. Beam,Jr.,Barbara S. Poole,David L.Bickelhaupt,Robert M. Crowe

American College

2 Risk Management and Etti G. Baranoff, Wiley, John & Sons, 93.75

10
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Insurance Esther ZipporaBaranoff

Incorporated

3 Principles of Risk Managementand Insurance

George E. E. Rejda Pearson Education 123.00

4 Risk Management #1 EmmettJ. Vaughan,With Theresa Vaughan

Wiley, John & Sons,Incorporated

91.75

5 Insurance in India: ChangingPolicies and EmergingOpportunities

P. S. Palande,R. S. Shah,M. L. Lunawat

SAGE Publications

6 Insurance in India Rutra Narain Jha Bharat BookBureau(International)


S.No.


1 Tools and Techniques of LifeInsurance Planning

Stephan R. R.Leimberg,RobertJ.

Doyle

NationalUnderwriter

Company

60.00

Additional Reading/s (Optional

S.No.

Journal/s

1 IRDA Journal

S.No.

Magazine/s

1 Risk & Insurance

S.N

o.

Website/s

1 www.irdaindia.org2 www.bimaonline.com

PREVIEW:

#1 Risk management (EmmettJ. Vaughan, With Theresa Vaughan) :- Designed tobe used in either a first course, or a capstone course in risk management. Topics include:the history of modern risk management; risk management decisions; policy and objectives;methodologies, tools, and techniques; measuring property loss, indirect loss, criminal lossand legal liability exposures; usefulness of quantitative analysis; general considerations ofrisk control; practical considerations in insurance buying, types and taxation of captiveinsurers; and risk financing.

*****

MODULE: 3

11
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dq1l8&ath=M.+L.+Lunawathttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Rutra+Narain+Jhahttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Stephan+R.+R.+Leimberghttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Stephan+R.+R.+Leimberghttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Robert+J.+Doylehttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Robert+J.+Doylehttp://www.irda.org/http://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Emmett+J.+Vaughanhttp://search.barnesandnoble.com/textbooks/booksearch/results.asp?userid=BQv16dq1l8&ath=Theresa+Vaughan


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COURSE TITLE: Retirement Planning and Employee Benefits

COURSE DESCRIPTION:

This module would cover the knowledge requirements relating to retirement planning andemployee benefits for a CFP professional. The emphasis is on the process of wealth creationand the retirement planning and strategies for clients.



1. Understand the importance of retirement planning for the pre-retirementaccumulation period and the actual retirement when the funds are used.2. Demonstrate the ability to provide a client with an evaluation ofretirement needs.3. Determine legal and tax requirements for a retirement plan to beconsidered qualified for income tax purposes.4. Explain types of defined contribution and defined benefits qualified plans.

5. Compare personal savings plans used in the retirement planning process.


Introduction to Retirement Planning

1. Issues in retirement planninga. Importance of retirement planningb. Life expectancy and career stabilityc. Pre-retirement counseling

2. Wealth creationa. Wealth accumulation and erosion

b. Early retirement, living longer than expected, delaying retirementc. Effect of inflation

Retirement Benefits

3. Types of plansa. Defined benefit plansb. Defined contribution plansc. Defined benefits v/s defined contribution plans, employers and employees

perspectivesd. Trends and reasons for transitione. Portability of plans

4. Defined benefit plans

a. Gratuity and the Payment of Gratuity Act, 1972b. Leave Salaryc. Retrenchment compensation and the Industrial Disputes Act, 1947d. Voluntary Retirement Schemee. Nature of defined benefit, tax issues in defined benefit plans, age/service

requirements, applicability of plans to clients5. Defined contribution plans

a. Statutory provident fund, Provident Fund Act, 1925

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b. Recognized provident fund, Employee Provident Fund and Miscellaneous ProvisionsAct, 1952, Employees Provident Fund Organization, features, mode of operationand investment norms

c. Unrecognized provident fundd. Employees Pension Scheme, 1995, features, funding of schemee. Employees Deposit Linked Insurance Scheme, 1976, features, funding of scheme

f. Public Provident Fund, featuresg. Nature of defined contribution, tax issues in defined contribution plans, withdrawalnorms, applicability of plans to clients

6. Superannuation and other retirement plansa. Trust funds fiduciary responsibilitiesb. Approved superannuation fundsc. Employer pension plans and applicability to clientd. Private fund managers, investment normse. Pension plans from mutual funds and insurance companiesf. Social security benefits civil servants, defense personnel and war widows,

agricultural workers, destitutes, disaster affected people, etc.g. Retirement plans for self-employedh. Profit sharing plans

7. Group Life and Health Insurancea. Group insurance contracts and characteristicsb. Basic underwriting principles and eligibility requirements of group plansc. Group life insurance plansd. Group medical insurance plans and managed caree. Group disability-income plansf. Workers compensation

Retirement Planning and Strategies

8. Retirement needs analysisa. Determination of financial objectives at retirementb. Estimating retirement expenses

c. Calculation of retirement funds available to meet objectivesd. Calculation of additional funds needed to meet objectives

9. Retirement income streamsa. Employer pension schemeb. Commuted and uncommuted pension, tax treatment, advice on commutationc. Immediate and deferred annuitiesd. Other income streams and their tax treatment fixed deposits, rental income,

schemes from Indian Savings Organization, monthly income plans10. Post-retirement counseling

a. Investment risk and constraintsb. Investment portfolio evaluation, restructuring of investments or debtc. Risk tolerance and attitude to equitiesd. Clients health, interests and hobbies, home, vacations, gifting

Pension sector reforms

11. Need for reformsa. Demographic trendsb. Coverage of population, organized and unorganized sectors, employment trendsc. Un-funded pension liabilitiesd. Deficiencies in existing schemes

12. Reform proposals

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a. Project OASIS and its recommendationsb. World Banks recommendations, multi-pillar reforms, Chilean modelc. Pensions Authorityd. The role of the state developmental state (East Asia), welfare state (Europe and

North America), minimalist state (Europe and North America)


Professionally Based Books (Compulsory - any one book)

S.No.


1 Pension Planning Everett T. Allen,Jerry S. Rosenbloom

McGraw-HillProfessionalPublishing

2 Tools and Techniques ofEmployee Benefit andRetirement Planning

Stephen Leimberg NationalUnderwriterCompany

70.75

3 Planning for Retirement Needs David A. A. Littell,

Kenn Beam Tacchino

American College

4 Employee Benefits Burton T. T. Beam, John McFadden

Dearborn Trade

5 Social Insurance And EconomicSecurity

Rejda Prentice Hall


S.No.


1 All about Medicare 200X Joseph F. Stenken NationalUnderwriterCompany

22.75

2 Social Security Manual 200X Joseph F. Stenken NationalUnderwriterCompany

30.75

Additional Reading/s (Optional

S.No.

Website/s

1 www.irdaindia.org

2 www.bimaonline.com

*****

14
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MODULE: 4

COURSE TITLE: Investment Planning

COURSE DESCRIPTION:

This module includes introduction to Investment Planning, Investment vehicles, investmentstrategies, Regulation of an investment advisor, Application to clients, etc.



1. Understand the importance of investment planning in the financial planningprocess, ethical issues for advisors, regulation of advisors.

2. Understand the choice of investment products in terms of their risk-returncharacteristics.

3. Evaluate investment choices in the context of client's financial planning needs.4. Understand how client investment portfolios are created, monitored and rebalanced

based on their objectives and needs.5. Recommend a portfolio of investment products.


Introduction to Investment Planning

1. How investment planning is different from selling investment products2. Investment risk

A. Definition of riskB. Types of risk

Market risk

Reinvestment risk Interest rate risk

Purchasing power risk

Liquidity risk

Political risk

Exchange rate risk3. Measuring risk

A. Standard deviationB. Beta

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4. Managing riskA. Diversification

Diversifiable and un-diversifiable risk

Product diversification

Time diversificationB. Hedging

5. ReturnsA. Relationship between risk and returnB. Compounding

Types of returns

CAGR

Total returns

Risk-adjusted returns

Post-tax returnsa. Tax on capital gainsb. Tax on income

Holding period return

Yield to maturity6. Investment portfolio

A. Risk and return on a portfolioB. Measuring portfolio riskC. Effect of diversification on portfolio risk and return

Investment vehicles

Concept, structure, returns measurement (income and/or capital gains), tradability, liquidityand legal issues of the following investment vehicles. The objective is to provide an essentialunderstanding of the products from a risk-return perspective, so that proper productrecommendations can be made.

7. Small savings8. Fixed income instruments

A. Securities

Government securities

Corporate SecuritiesB. Deposits

Bank deposits

Corporate deposits9. Insurance-based investments10. Mutual funds

A. The concept and role of mutual fundsB. Fund structures and constituentsC. Legal and regulatory environmentD. The prospectus/offer document

E. Fund distribution and sales practicesF. Accounting, taxation and valuation normsG. Investor servicesH. Investment managementI. Measuring and evaluating mutual fund performance

11. Equity shares12. Derivatives

A. Essential featuresB. Application to investment portfolios

13. Real estate

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A. Forms of real estate investmentB. Financing real estateC. Costs of buying and maintaining

14. Other investmentsA. BullionB. Collectibles

C. Precious metals

Investment strategies

15. Active and passive strategiesA. Market timingB. Securities selectionC. Maturity selectionD. Buy/hold

16. Asset allocationA. Strategic and tactical asset allocationB. Fixed and flexible allocationC. Rebalancing strategies

D. Formulae based monitoring and revision of portfolios

Regulation of an investment advisor

17. The regulatory functions, rules and codes of conduct pertaining to plannersA. Banks: RBIB. Mutual funds and collective investment schemes: SEBIC. Equity shares: SEBID. Derivatives: SEBIE. Grievance mechanisms

Application to clients

18. Matching investment vehicles to needs of clientsA. Asset allocation and portfolio rebalancing according to client needsB. Case studies

Single persons

Young couples

Mature couples with grown children

Empty nesters

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Professionally Based Books (Compulsory - Book 1 or 2 plus one amongst 2 to 7)

S.No.


1 Investments: An Introductionwith Investment AnalysisSoftware #1

Herbert B. Mayo South-WesternSPD (India)

33.95(Speci

alprice)

2 Investment Analysis andPortfolio Management

Prasanna Chandra Tata McGraw Hill 6.20

3 Essentials of Investments #2 Zvi Bodie, Alex Kane,Alan J. Marcus

McGraw-Hill HigherEducation

98.77

4 Fundamentals of Investing #3 LawrenceJ.J. Gitman,Michael D. Joehnk

Benjamin-CummingsPublishingCompany

108.00

5 Fundamentals of Investmentsfor Financial Planning

Robert S. S. Graber,Walter J. Woerheide

American College, 54.00*

6 Investments Edgar Norton,Frank K. Reilly

Harcourt BraceCollege Publishers

129.95

7 Investment Analysis andPortfolio Management #4

Frank K. Reilly,Keith C. Brown

South-Western 127.95

Primarily Consumer Based Books

S.No.


1 Introduction to Investments #5 Haim Levy South-Western 117.95

2 International Finance:Management, Markets andInstitutions #6

James Calvin Baker Prentice HallProfessional

TechnicalReference

92.00

3 Investments: Analysis and Charles P. Jones Wiley, John & Sons, 119.7

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Management #7 Incorporated 5

4 Portfolio Selection: EfficientDiversification of Investments

Harry M. Markowitz BlackwellPublishers

66.95

Additional Reading/s (Optional)

S.No. Journal/s

1 The Wall Street Journal

S.No.

Magazine/s

1 Investors Business Daily

2 Barrons

PREVIEW:

#1 Investments: An Introduction with Investment Analysis Software(Herbert B. Mayo) :--Covering the same topics found in more advanced-level texts,

Investments incorporates minimal math and is much more student-friendly, resulting in anincreased excitement for and understanding of the basic investment course material. It isthe text of choice for the College of Financial Planning. It includes a strong focus on theindividual financial planner and features a "Financial Advisors Investment Case" at the endof each chapter. These short cases illustrate how text material applies to real investmentdecisions. Financial calculators are introduced and utilized throughout the text withexplanations employing both interest tables and the calculator. It is also ideal for non-majorscourses. This weighty textbook covers the environment of investment and offers detaileddiscussion on common stock, fixed-income securities, derivatives, and portfoliomanagement. Specific chapters discuss topics like the creation of assets, security markets,taxes, risk, dividends, bonds, government securities, futures, foreign securities, non-financialassets, and portfolio planning. Numerous examples and illustrations underscore key points.A companion CD-ROM contains tools for financial, statistical, derivation, valuation, pricing,

rating, and other calculations. Annotation c. Book News, Inc., Portland, OR

#2 Essentials of Investments (Zvi Bodie, Alex Kane, Alan J. Marcus):- The marketleader, Essentials Of Investments,4/E is an undergraduate textbook on investment analysis.

The authors have eliminated unnecessary mathematical detail and concentrated on theintuition and insights that will be useful to practitioners throughout their careers as newideas and challenges emerge from the financial marketplace. ESSENTIALS maintains thetheme of asset allocation (authors discuss asset pricing and trading then apply thesetheories to portfolio planning in real-world securities markets that are governed byrisk/return relationships). ESSENTIALS also continue to develop modern topics. The majorobjective in this revision is to maintain the current level in content and coverage, but workon improving the text's accessibility by enhancing presentation and design. A text thattreats markets, portfolio theory, securities, options and futures, and investment

management within a framework holding that most securities are usually pricedappropriately. It is consistent with the Chartered Financial Analyst curriculum, and overviewsof the investment process and strategies are modeled after the ICFA outline. This secondedition eliminates the formal analysis of utility functions. Appendices offer mathematicaltables and sample pages from sources of financial and economic information.

#3 Fundamentals of Investing (LawrenceJ.J. Gitman, Michael D.Joehnk):-Renowned for its writing style, trademark example method, and learning goals, Gitman and

Joehnk's classic investment text is now in its Seventh Edition. Addressing the growing

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demand to learn how to manage personal investments and finances, the authors haveturned the spotlight on individual rather than institutional investors. Their strong real-wordfocus includes superior coverage of mutual funds, international investments, and investmentdecision techniques. The new edition makes use of the Internet through exercises and crossreferences to Internet resources. An accompanying CD-ROM offers hands-on practice inanalyzing companies for investment purposes. All these distinctive features ensure that

Fundamentals of Investing will continue to define the market for years to come. A book/disktext for students in a first course in investments, focusing on both individual securities andon portfolios, and describing techniques for implementing investment goals in light of risk-return tradeoffs. Learning aids include summaries; discussion questions; case problems;margin definitions; boxes on real-life investing situations; and STOCK-TRAK simulations. Theaccompanying disk contains software for performing calculations, keyed to the text. Thissixth edition includes investor interviews and expanded material on subjects such asglobalization and mortgage-backed securities.

#4 Investment Analysis and Portfolio Management (Frank K. Reilly,Keith C. Brown):- Penned by a widely respected author team, this investments text takesan empirical approach to explaining current, real-world practice. Providing the mostcomprehensive coverage available, the text emphasizes investment alternatives and

teaches students how to analyze these choices and manage their portfolio. Like the editionsbefore it, the sixth edition includes excellent coverage of portfolio theory, capital markettheory, security analysis, and international investments.

#5 Introduction to Investments (Haim Levy) :-This text focuses on the comparison ofefficient and inefficient markets from the viewpoint of an experienced portfolio manager.

This approach covers not only the fundamentals of portfolio management - financial,securities markets, and investment management techniques, including financial engineering- but also how these techniques are applied by professional investors. It is unsurpassed in itsability to bridge between theory and application by using articles from the financial media aswell as real-world mini-cases to illustrate concepts. A strong problem-solving approach issupported through many solved sample problems and practice boxes throughout the text,and through strong end-of-chapter problems and cases which use real world information and

data to give students the opportunity to apply what they've learned to solving realproblems. New edition of a text devoted to the three main issues involved in investmentanalysis in the capital markets, i.e. security selectivity (security valuation models), portfoliodiversification (the portfolio composition of the selected securities), and dynamic assetsallocation of stocks, bonds, and cash. Twenty-five chapters discuss the investmentenvironment, return and risk, expanding the portfolio universe, efficient markets andportfolio performance, security analysis, and options, futures, and financial engineering.Annotation c. Book News, Inc., Portland, OR (booknew.com)

#6 International Finance: Management, Markets and Institutions(James Calvin Baker):- This comprehensive book provides concise coverage ofinternational finance as it relates to multinational corporations. It covers the latest methodsfor financial management of international corporations doing business across borders

throughout the world. Presenting the financial management from the perspective of thechief financial officer of a multinational corporation, this book examines the sources of fundsavailable to MNCs and analyzes the markets for financial instruments used to finance orhedge the risks of the MNC. It also covers the cultural variables of international businesswhich can affect the international finance function, the global environment of businessfinance and foreign investment and operations. An essential reference for any professionalor individual who wishes a deeper understanding of the financial management of themodern multinational corporation. A text for undergraduate and beginning MBA students oncurrent methods for financial management of international firms. Discussion deals withmanagement of finance function from the viewpoint of the chief financial officer of the

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multinational corporation (MNC). Sources of funds to finance MNCs are examined, andmarkets for financial instruments used to finance the MNC or to hedge its various risks areanalyzed. Major concepts, analytical methods, and applications are incorporated. Specialemphasis is placed on the role of the chief financial officer (CFO), with several mini-casesexamining CFOs and financial institutions' executives in real-life situations. This text isshorter than most in international business finance, making it easier to complete in one

semester.

#7 Investments: Analysis and Management (Charles P.Jones) ;- This bestsellerteaches readers not only how to identify successful investment opportunities, but how toanticipate and deal with investment problems and controversies. Jones carefully andgradually develops key concepts, while covering all the necessary background material.Only essential formulas are included. It's one of the most readable, comprehensibleinvestments texts available! This textbook shows how to access and evaluate investmentinformation, analyze investment opportunities, and make savvy decisions when investing. Itemphasizes the skills needed to recognize investment opportunities, make good investmentdecisions, and deal with problems when they arise. Chapters outline background informationand investment concepts, and discuss fixed-income securities, common stocks, securityanalysis, derivative securities, modern investment securities, modern investment theory,

and investment management. Jones teaches at North Carolina State University.

*****

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MODULE: 5

COURSE TITLE : Tax & Estate Planning

COURSE DESCRIPTION:

This module would cover the knowledge requirements relating to tax planning and estateplanning for a CFP professional.



1. Evaluate the appropriateness of tax strategies for individual family situations.

2. Integrate tax planning into the six step financial planning process.3. To understand the universal nature of estate planning needs.4. To recognize the high level of ignorance regarding estate planning among thegeneral population as well as students.5. To comprehend the fundamental objective of greater efficiency in wealthtransfer.


Tax Planning Considerations

1. Ethical considerations in tax planninga. Privileged communicationsb. Dangers of tax evasion

2. Tax compliance mattersa. Filing tax returns and documentationb. Advance tax

The audit processRefund of income tax

Judicial review3. Taxation terminology

a. Inclusionsb. Exclusionsc. Deductions

Tax Computations

4. Tax calculations and special rulesa. Gross incomeb. Adjusted gross incomec. Itemized deductions

Taxable incomed. Tax liabilitye. Clubbing of Income

5. Tax characteristics of business formsa. Sole proprietorship

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b. General partnershipc. Limited liability companiesd. Trustse. Foundations/exempt organizationsf. Professional associations/corporationsg. Co-operative Societies

h. Others6. Non Resident Indians (NRIs)a. Residential status of individualsb. Types of accounts for non-residentsc. Investment opportunities for non-residentsd. Tax implication for non-residents

7. Heads of incomea. Salariesb. Income from other sourcesc. Capital gainsd. Business/ professione. House propertyf. Interest on government securities

8. Capital Gains tax rulesa. Determination of gain or lossb. Characterization of gain or lossc. Netting rulesd. Indexation benefitse. Capital loss limitations

Tax Planning Strategies

9. Tax reliefa. Exemptionsb. Deductionsc. Rebates

10. Non taxable transactions (e.g., gifts, estate)

11. Tax management techniquesa. Deferral and accelerationb. Maximizations of exclusions and creditsc. Managing loss limitationsd. Capital asset transactionse. Deductible expenditures of individuals and business forms

12. Interest and penalty taxes and other chargesa. Failure to file tax return or to pay taxb. Preparer penaltiesc. Accuracy related penaltiesd. Fraud/concealment penalties

Estate Planning

13. Features of trusta. Classification of trustsb. Characteristics of selected trust provisionsc. Rule against perpetuities

14. Taxation of trustA. Income tax implications of trusts

a. Exemptionsb. Simple and complex trustsc. Distributable net income

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d. Tax implications of trustse. Recommendations and justifications of the most appropriate trustf. Tax issue on retirement plans at death

15. Property documentationa. Sale letter/ power of attorneyb. Freehold

c. Mutationd. Wille. Succession


Professionally Based Books (Compulsory - one book amongst 1 to 4 plus oneamongst 5 & 6)

S.No.


1 Financial Planners Guide toEstate Planning

Lochary & Lochary

2 Elements of Income Tax B. B. Lal Vikas Publishing

House Private,Limited

7.20

3 Estate Planning and Taxation John C.Bost Kendall/HuntPublishingCompany

64.95

4 Fundamentals of EstatePlanning

Constance J. (Ed.) J. Fontaine

American College 80.00

5 In the wonderland ofInvestment

A N Shanbhag Popular PrakashanPrivate Limited

5.10

6 Taxmans direct taxes planningand management

Vinod K Singhania 4.00


S.No.


1 Estate Planning Step By Step(Barron's Legal-Ease Series) #1

Martin M. Shenkman Barron'sEducational Series,Incorporated

14.95

2 Tools and Techniques of EstatePlanning

Stephan R. Leimberg, Jerry A.Kasner,Stephen N. Kandell,Morey S. Rosenbloom,Herbert L. Levy

Prentice Hall 86.75

3 Tax payer to Tax Saver A N Shanbhag Vision Books 5.00

PREVIEW

#1 Estate Planning Step By Step (Barron's Legal-Ease Series)Martin M. Shenkman :- This third book in Barron's Legal Ease series guides the laymanthrough all the important legal and tax aspects and financial details of estate planning.Special emphasis is placed on building in elements of flexibility to cope with unforeseenevents, and sample planning documents are provided, including power of attorney, livingwill, will signing checklist, will, emergency information checklist, and more.

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*****

MODULE: 6

COURSE TITLE : Advance Financial Planning

COURSE DESCRIPTION:

This module builds upon the foundations in financial planning and the knowledgerequirements in Modules 2 to 5 to enable the CFP professional to construct a comprehensivefinancial plan for a client. Miscellaneous topics are also covered in this module.



1. Determining the clients financial status by analyzing and evaluating the client'sinformation.2. Developing and preparing a client-specific financial plan tailored to meet the goals

and objectives of client, commensurate with clients value, temperament, and risktolerance.

3. Implement and monitor the financial plan.


Financial Planning Process

1. Establishing client- planner relationshipsa. Explain issues and concepts related to overall financial planning process, as

appropriate to the clientb. Explain services provided, the process of planning, documentation requiredc. Clarify clients and certificants responsibilities

2. Gathering client data and determining goals and expectationsa. Obtain information from client through interview/ questionnaire about

financial resources and obligationsb. Determine clients personal and financial goals, needs and prioritiesc. Assess clients values, attitudes and expectationsd. Determine clients time horizonse. Determine clients risk tolerance level

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f. Collect applicable client records and documents3. Determining the clients financial status by analyzing and evaluating the client's

informationA. General

a. Current financial status (e.g., assets, liabilities, cash flow, debtmanagement)

b. Capital needsc. Attitudes and expectationsd. Risk tolerancee. Risk managementf. Risk exposure

B. General Needsa. Emergency fundsb. Childrens educationc. Childrens marriaged. Buying real assets like home, car, durables, etc.e. Future lifestyle needs

C. Special needsa. Divorce / remarriage considerationsb. Charitable planningc. Adult dependent needsd. Disabled child needse. Education needsf. Terminal illness planningg. Entrepreneurial needs planning

D. Risk managementa. Life insurance needs and current coverageb. Disability insurance needs and current coveragec. Medical insurance needs and current coveraged. Long term care insurance needs and current coveragee. Homeowners insurance needs and current coveragef. Auto insurance needs and current coverageg. Commercial insurance needs and current coverageh. Other liability insurance needs and current coverage (e.g., umbrella,

professional, errors and omissions, directors and officers)E. Retirement

a. Current retirement plan tax exposuresb. Current retirement plansc. Retirement strategies

F. Employee benefitsa. Available employee benefitsb. Current participation in employee benefits

G. Investmentsa. Current investmentsb. Current investment strategies and policies

H. Taxation

a. Tax returnsb. Current Tax strategiesc. Tax compliance status (e.g., estimated tax )d. Current tax liabilities

I. Estate planninga. Estate planning documentsb. Estate planning strategies

4. Analyze Client Objectives, Needs and Financial Situationa. Analysis of relevant information

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b. Need for specialist advicec. Issues that require further clarification

5. Developing and presenting the financial planA. Developing and preparing a client-specific financial plan tailored to meet the goals

and objectives of client, commensurate with clients value, temperament, and risktolerance, covering:

1) Financial positiona. Current statementb. Projected statementc. Projected statement with recommendations

2) Cash flowa. Projectionsb. Recommendationsc. Projections with recommendations3) Capital needs at retirementa. Projectionsb. Recommendationsc. Projections with recommendations4) Capital needs projections at deatha. Recommendationsb. Projections with recommendations5) Capital needs: disabilitya. Recommendationsb. Projections with recommendations6) Capital needs: General needsa. Recommendationsb. Projections with recommendations7) Capital needs: special needsa. Recommendationsb. Projections with recommendations8) Income taxa. Projectionsb. Recommendationsc. Projections with strategy recommendations9) Employee benefitsa. Projections10)Asset allocationa. Statementb. Strategy recommendationsc. Statement with recommendations11)Investmenta. Recommendationsb. Policy statementc. Policy statement with recommendations12)Riska. Assessment

b. Recommendations13)List of prioritized action itemsa. Presenting and reviewing the plan with the clientb. Collaborating with the client to ensure that plan meets the goals and

objectives of the client, and revising as appropriate6. Implementing the financial plan

a. Assist the client in implementing and recommendations

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b. Coordinate as necessary with other professionals, such as accountants,attorneys, real estate agents, investment advisors, stock brokers andinsurance agents

7. Monitoring the financial plana. Monitor and evaluate soundness of recommendationsb. Review the progress of the plan with the client

c. Discuss and evaluate changes in clients personal circumstances, (e.g.,birth/ death, age, illness, divorce, retirement)d. Review and evaluate changing tax law and economic circumstancese. Make recommendations to accommodate new or changingcircumstances

Miscellaneous Topics

8. Internet Resourcesa. Internet usage and applicationb. Transactions over the netc. Issues of securityd. Financial Planning using the Internet

9. Foreign exchange issues for individualsa. Foreign Exchange Management Act (FEMA)b. Currency risk management

10. Financial planning for special needs and clientsa. Individual life cycleb. Financial Planning for unmarried clients, single parents,widows/widowers, etc.c. Financial Planning for returning Non Resident Indiansd. Other special needs and options (e.g., divorce, bankruptcy)

*****

Elaborate CFP Course Contents-long

Documents

Transcript of Elaborate CFP Course Contents-long