JOIN USMake a jump for the cream
Getting a Certified Financial Planner (CFP) certification may just be as good as getting the key to a kingdom in financial planning, but with the commoditisation of asset management business being underway, margins being squeezed and every one on the same platform, how do you set yourself apart?
Planning — that changes the whole relationship. Once you receive a CFP certificate, you are viewed in a different light. You are no longer the guy calling clients about the latest bond or the hottest stock tip. You no longer have to convince clients to get the best deal that’s hit the biggest breakpoint in one fund family.
A CFP certification allows you to accompany the client to his/her attorney to make sure assets are protected now and for the future generations. They not only help create financial portfolios across diversified segments but also help avoid probate, estate taxes and help preserve the family inheritance.
What is CFP?
CFP is the highest certification conferred by the Financial Standard Board of India, rated as the gold standard in financial planning by Wall street Journal. CM certification is a mark of excellence granted to individuals who meet the stringent standards of education, examination, experience and ethics.
It is the most prestigious and internationally-accepted financial planning qualification recognised and respected by the global financial community. The CFPCM certification wins trust and presents opportunities worldwide — this certification is valid in 23 countries in the world.
How to register for the programme
Professionals, graduates and undergraduates can take this programme through regular classes with an authorised education provider listed with FPSB India. Online sessions and private tuitions will make it too difficult to cross the finishing line .
Pathway to CFP certification
There are two ways to get a CFP certification — one is the ‘regular pathway’ and the other is the ‘challenger pathway’. Details about both (eligibility criteria and registration amount) can be obtained from www.fpsbindia.org
Module-wise break up
There are six modules to cover under CFP. The first module is a waiver. But candidates must write the exams for the remaining five modules at an NSE authorised test centre only. If the candidate clears all the modules and meets the eligibility criteria, he/she is then awarded a CFP certification .
On clearing every module, the candidate gets an Associate Certification Planning both from NSE and FPSB.
The different modules are:
*Introduction to Financial Planning
*Risk Analysis and Insurance Planning
*Insurance Advisors and Retirement Planning
*Investment Mapping
*Tax Planning and Estate Planning
*Advanced Financial Planning
High net-worth individuals
A high net-worth individual (HNI) is one whose investment potential is above 5 crores per annum. HNI’s usually invest in real estate, equity markets, mutual funds, insurance, gold, FDs, etc. A CFP assists HNI’s in managing each of these segments to help create a balanced portfolio. A CFP must also be articulate, transparent, set goals before investments and must put the client’s interest ahead of his/her own interest.
The number of HNI’s in India doubled from 84,000 in 2009 to 1,50,000 ( and counting) in 2011, but we have not seen a proportionate rise in the number of CFP’s. India is home to about 1,500 CFP certified professionals.
Given an incremental capital output ratio of four, India can hope to sustain its growth rate of 8 per cent with a domestic savings rate of 32 per cent. Going forward we will see more participation in equity markets from the public, thereby strengthening the cause for having financial goals and plans for every individual.
Time for change
The “No risk, no gain” conservative planning schemes have long gone and given way to newer exciting financial plans. Youngsters are more adventurous with their finances and are ready to take the risk — they are looking for their savings to have the ‘rupee-multiplier’ effect. These are great positive signs to capitalise on.
The value of a CFP certification is now priceless, with FPSB charter members beginning to give preference to CFP’s over CA’s.
Pranav Chandra, currently working as a Relationship Manager with ICICI Bank, is pursuing a CFP certificate. He says, “Preparing for CFP certification has helped me plan my client’s portfolio better.”
Neeti Trivedi, founder of Money Compass, a financial planning firm echoes that thought too. “CFP certification has helped me build my confidence and engagement points with the client.” She gave up her job with ICICI bank and Infosys to pursue her entrepreneurial dream and is a firm believer in flying solo.
(The author is the Divisional Head at IIJT)