Certified Personal Financial Advisor (CPFA) Examination

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Certified Personal Financial Advisor (CPFA) Examination

  1. 1. NatioNal iNstitute of securities Markets an educational initiative By seBiCERTIFIED PERSONAL FINANCIAL ADVISOR Deliver aDvice that fitS your client’S neeD It’s time to differentiate between those who just sell financial products and those who offer credible financial advice. Become a Certified Personal Financial Advisor.
  2. 2. CERTIFIED PERSONAL FINANCIAL ADVISORcertified Personalfinancial advisor (cPfa)examinationThe primary objective of this certification examinationis to create a minimum knowledge benchmark forprofessionals engaged in helping individuals managetheir personal finance and investments. The examinationcovers:• Financial Planning as an Approach: Get acquainted with financial planning as an approach to investing, insurance, retirement planning and an aid for advisors to develop long term relationships with their clients.• Making a Personal Financial Plan: Know the basics of financial advisory, steps in the advisory process, making and implementation of financial plan.• Evaluating and Recommending Financial Products: Understand how to evaluate different products, their suitability and how the recommendation of the same can impact investment risks, returns and strategies in a personal finance environment for investors and prospective investors in the market.• Tax and legal aspects: Get oriented to Income tax, Wealth tax and legalities of Estate planning in personal finance, and regulatory aspects underlying advisory.
  3. 3. cPfa examination is forprofessionals who offer personalfinance and investment solutionsto individualsThis examination will be highly beneficial to:1. Individual Financial Advisors2. Employees of organizations engaged in financial advisory services that include Stock Broking and Distribution Houses, Banks, Wealth Management Companies, Asset Management Companies, Insurance Companies, Consumer Credit Companies etc.3. Students aspiring for a career in personal financial planning and wealth management reasons every financial advisor should become a CPFA1. Gain holistic and relevant knowledge of financial planning and advisory process2. Certification from a neutral and authoritative organization. (NISM is established by SEBI)3. Leading financial services companies and institutions are supporting this certification4. May help you earn more fee-based income by providing value-added services5. Investor education and awareness about this examination will create demand for advisors who are certified
  4. 4. curriculum forcPfa examinationUnit 1: Concept of Financial PlanningIntroduces the concept, scope and need of Financial Planning and how to use it topursue Financial Advisory as a profession so that one can offer need-based solutionsand products to one’s clients. The unit helps the reader understand the processof developing, advising and implementing a suitable financial plan with a focus onanalysing client’s needs, goals and risk profile.Unit 2: Managing Investment RiskDeals with the definition of risk, types of investment risk and the different sourcesof the same. This unit also covers risk measurement and various methods ofcalculation and interpretation of results and its consequence in taking a financialdecision. This unit will help the reader in understanding different products availablein the market and their risk-return aspects, the concepts of asset allocation anddiversification, the benefits of hedging in order to manage risk while achieving theinvestment targets.Unit 3: Measuring Investment ReturnsDetails different types of returns, measuring returns, and defines the risk-returnrelationship. This unit helps the reader grasp the connotation of ability & willingnessto take risk and optimal asset allocation. It also discusses the impact of tax on returns(post-tax returns) and importance of Net Present Value (NPV) over Internal Rate ofReturn (IRR) and calculation of Compounded Annual Growth Rate (CAGR). This unitwill help the reader evaluate and compare returns from various investment options.Unit 4: Investment VehiclesIntroduces the reader to the concept of investing. Before starting to invest, oneshould be clear about the client’s possible future requirements, needs andaspirations. This unit will help in understanding these needs, aspirations, the variousoptions available to invest money, the pros and cons of these investment options.Unit 5: Investment StrategiesIntroduces the reader to the different types of investment strategies which theadvisor can adopt to meet his/her client’s investment goals. It also discusses thevarious asset classes and the importance of asset allocation while making anyinvestments.
  5. 5. Unit 6: Insurance PlanningDiscusses the importance of risk management and insurance as one of the formsto manage risks. This unit will help the reader to better understand the variousconcepts under insurance such as the meaning of insurer, insured and premium tobe paid. This unit also discusses how insurance can be used as a tool to shield anindividual against potential risks like travel accidents, death, unemployment, theft,fire mishaps etc.Unit 7: Retirement PlanningAs every person has different life cycle stage, financial goals and risk profile, theretirement planning too differs from person to person. This unit deals with theretirement planning process. It also discusses the various factors which impactretirement planning such as current age, retirement age, life expectancy, investmenthorizon etc.Unit 8: Tax and Estate PlanningAddresses tax planning which is of high importance for any investment advisor.This unit discusses the significant provisions of the Indian Direct Tax Laws with theobjective of providing basic and working knowledge of the taxation aspects of estateplanning. This unit also discusses estate planning as an integral part of the financialplanning process with a focus on the Hindu Succession Act, and the concept of thePower of Attorney and Wills.Unit 9: Need for RegulationDeals with the legislative framework of the securities market. Regulation of themarket is motivated by the need to safeguard the interests of investors. This unitdiscusses the role of Ministry of Finance, RBI, SEBI, IRDA, PFRDA, Economic OffencesWing, Financial Intelligence Unit-India etc. This unit also outlines the differentstatutes and regulations of the Financial Market.every candidate will receive a comprehensiveWorkbook for Personal financial advisors coveringthe curriculum of the certification.
  6. 6. how can i become a certifiedPersonal financial advisor? Visit www.investorfirst.in/advisor and select from a list of test centres and exam dates available. The exam can be given through test centres of NSE and MCX Fill in your details, register online and get confirmation Download the study material Get a list of companies that offer training for this certification (attending training is optional) Appear for the test and get the result immediately after finishing the exam. (Submit a copy of your PAN Card at the centre) If you pass the exam, the Certificate will be delivered at the PASSED address provided while registering CP FA Once Certified, you can use “Certified Personal Financialcertified Advisor” (CPFA) as a qualification alongside your other qualificationsassessment MethodologyThe examination consists of 60 questions each of 1 mark and 20 questionseach of 2 marks, and should be completed in 2 hours. The passing score onthe examination is 60%. There is no negative marking.
  7. 7. niSM aims to lead, catalyze anddeliver educational initiatives toenhance the quality of securitiesmarkets National Institute of Securities Markets (NISM) is a public trust established by the Securities and Exchange Board of India (SEBI), the regulator for securities markets in India.NISM seeks to add to market quality through educational initiatives.It is an autonomous body governed by a Board of Governors and withstrategic guidance from an international Advisory Council.NISM’s most important mission is to build capacity among and forthe stakeholders in the securities markets through financial literacy,professional education, enhancing governance standards and fosteringpolicy research.School for certification ofintermediariesThe School for Certification of Intermediaries (SCI) at NISM is engagedin developing certification examinations for professionals employedin various segments of the Indian securities markets. Most of theseexaminations are being developed by NISM as mandated underSEBI (Certification of Associated Persons in the Securities Markets)Regulation, 2007. Financial Planning Corporation (India) Pvt. Ltd. (FPCIL) is a knowledge partner of NISM for the CPFA Examination. www.InvestorFirst.in aims to empower The certificate awarded to candidates who pass the CPFA individuals with right knowledge and tools examination will be jointly signed by NISM and FPCIL. that will help them make wise investment decisions and create long-term wealth. FPCIL was established by Financial Planning Standards Board India (FPSB India) along with BNP Paribas SA, SBI, www.InvestorFirst.in/Advisor is the section and Tata AIG Life Insurance Co. Ltd, essentially to undertake for financial advisors where you will get education activities in the Financial Planning segment. more information about CPFA examination, training material, registration etc.
  8. 8. the Six Schools of excellence at niSM School for Investor Education and Financial Literacy School for Certification of Intermediaries School for Securities Information and Research School for Regulatory Studies and Supervision School for Corporate Governance School for Securities EducationNational Institute of Securities MarketsPlot No. 82, NISM Bhavan, Sector-17 Vashi,Navi Mumbai - 400 705 | Phone: +91-22-66735100-105Fax: +91-022-66735110 | www.nism.ac.in | www.InvestorFirst.in

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