Introduction to Financial Planning

CFP^CM Certification Education Program Syllabus

Module I - Introduction to Financial Planning

COURSE DESCRIPTION: This module would serve as an introduction to Financial Planning. The module would cover the six-step process which includes Financial Planning process, client interactions, time value of money applications, personal financial statements, cash flow and debt management, asset acquisition, education planning, overview of risk management investment planning and retirement planning, special circumstances, plan integration, ethics, and business aspects of Financial Planning.

Financial Planning Process

1	Establishing client- planner relationships
	a. Explain issues and concepts related to overall Financial Planning process, as appropriate to the client
	b. Explain services provided, the process of planning, documentation required, and disclosure statements
	c. Clarify client’s and CFPCM licensee’s responsibilities and complaint handling mechanisms
2	Gathering client data and determining goals and expectations
	a. Obtain information from client through interview/questionnaire about financial resources & obligations
	b. Determine client’s personal and financial goals, needs and priorities
	c. Assess client’s values, attitudes and expectations
	d. Determine client’s time horizons
	e. Determine client’s risk tolerance level
	f. Collect applicable client records and documents
3	Analyse Client Objectives, Needs and Financial Situation
	a. Analysis of relevant information
	b. Need for specialist advice
	c. Issues that require further clarification
4	Developing appropriate strategies and presenting the Financial Plan
	a. Client's risk tolerance
	b. Assessment of options
	c. Research, analysis and modelling
	d. Draft Financial Plan
	e. Presenting and reviewing the plan with the client
	f. Collaborating with the client to ensure that plan meets the goals and objectives of the client, and revising as appropriate
5	Implementing the Financial Plan
	a. Assist the client in implementing and recommendations
	b. Coordinate as necessary with other professionals, such as accountants, attorneys, real estate agents, investment advisors, stock brokers and insurance agents
6	Monitoring the Financial Plan
	a. Monitor and evaluate soundness of recommendations
	b. Review the progress of the plan with the client
	c. Discuss and evaluate changes in client’s personal circumstances, (e.g., birth/ death, age, illness, divorce, retirement)
	d. Review and evaluate changing tax law and economic circumstances
	e. Make recommendations to accommodate new or changing circumstances

General principles

7	Regulatory requirements for CFP Certificants
	a. Registration and licensing
	b. Sources of information
	c. Other relevant legislature requirements
8	Ethical and professional considerations in Financial Planning
	a. The Code of Ethics and Professional Responsibility
	b. CFP licensee’s responsibilities to the public, clients and employers
	c. Client agreements and confidentiality clauses
	d. AFP Practice Standards
9	Assessment of risk and client behaviour
	a. Client attitudes
	b. Client knowledge
	c. Client behaviour
	d. Health of client
	e. Occupation
	f. Hazardous activities
10	Cash flow planning
	a. Short term cash flow planning
	b. Cash budgeting
	c. Preparing monthly household budgets
	d. Long term cash flow planning
11	Budgeting
	a. Forecasting
	b. Cash management
	c. Emergency fund planning
	d. Debt management/ users of debt
	e. Liquidity
	f. Monitor and evaluate budgets
	g. Compliance
12	Personal use asset management
	a. Home equity
	b. Types of mortgages
	c. Buy vs. lease
	d. Refinancing
	e. Hire- purchase, etc.
	f. Consumer loans
	g. Credit cards
13	Personal Financial Statement Analysis
14	Financial Mathematics
	a. Calculate and interpret time value of money
	b. Calculation of annuities
	c. Loan repayment schedule
	d. Inflation- adjusted interest rates
15	Economic environment and indicators
	a. Inflation/ deflation
	b. Interest rates/yield curves
	c. Equity investment and real return
	d. Government monitory and fiscal policy
	e. The impact of business cycles
	f. Key Indicators – lagging, concurrent and leading
	g. Financial institutions
16	Forms of business ownership/ entity relationships
	a. Sole proprietorships
	b. Partnerships
	c. Limited liability companies
	d. Trusts
	e. Foundations/ exempt organizations
	f. Professional associations/ corporations
	g. Cooperative societies
	h. Others
17	Ways of taking title to property (sole, joint, community, etc.)
	a. Characteristics
	b. Implications
18	Legal aspects of Financial Planning
	a. Contracts
	b. Negotiable instruments
	c. Torts
	d. Professional liability
	e. Fiduciary responsibility
	f. Agency law
	g. Consumer protection
	h. Investor protection