Be a Certified Financial Planner With CFP Certification

Certified Financial Planner (CFP) Certification is awarded by the FPSB Limited and is one of the most prestigious Financial Planning qualifications that are recognized and respected internationally by the financial community. A CFP Certification is considered a mark of excellence for individuals in terms of education, experience and work ethics and opens up many career opportunities for them in financial advisory services as well as financial services sector in general.

An aspirant in India who wants to pursue the certification may follow the Regular Pathway and register himself at Education Providers authorized by FPSB India or apply though the Challenge Status Pathway, if he has required education and experience.

4 E Criteria of CFP Certification

CFP Certification is awarded to candidates who fulfill 4 E criteria for it:

• Education: A candidate must possess knowledge necessary to become a Financial Planner. To prove this, a candidate must have completed 6-module CFP Certification Education Program through an authorized education provider and pass Exams 1-4 that are facilitated by the National Stock Exchange (NSE). This criterion is waived off for candidates who apply though the Challenge Status Pathway and already have higher qualifications and significant work experience.

• Ethics: Candidates must agree to abide by FPSB India's Code of Ethics, Practice Standards, Rules of Professional Conduct, & Disciplinary Rules & Procedures.

• Examination: Exam 5 or The CFP Certification Examination is based on Module VI that teaches Advanced Financial Planning. This exam assesses the candidate's ability to apply his knowledge to real-life Financial Planning situations.

• Experience: The candidate must complete at least three years of full-time or 6,000 hours of work experience in the field that involves Personal Financial Planning. Regular Pathway candidates may complete the experience criteria before or after appearing for Exam 5 but the Challenge Pathway candidates need to attain the relevant experience before appearing for the CFP Certification Exam.

Continuous Education (CE) Requirement

The CFP Certified Candidates have to necessarily fulfill the Continuing Education (CE) requirement, which helps them to stay updated on latest Financial Planning trends, strategies, and products that can be profitable for their clients and makes sure that the professional competence of the CFP Certificant does not erode with time.

How to Attain CFP Certification?
There are two ways to attain CFP Certification:

Regular Pathway

• A candidate must have passed Class 10th at the time of enrollment in CFP Certification Programme at one of the FPSB India's Authorized Education Providers.

• He has to clear following exams that are conducted online at NSE Examination Centers:

• The candidate must clear HSC or Class 12th and then sit for CFP Certification Examination or Exam 5, which is based on Advanced Financial Planning.

• Graduates need to complete three years of work experience in Personal Financial Planning while non-graduates need to complete five years of work experience in the same field before or after their CFP exam.

Exam 1-4 are of 2-hour duration each and fee for each exam is Rs 2,000. Exam 5 or The CFP Certification Exam is of 4-hour duration and its fee is Rs 5,000.

Challenge Status Pathway

• A candidate with higher qualifications can go for this pathway. The long list of candidates who are eligible to choose Challenge Status include those who have completed their CA or cleared Intermediate Level exams for CA; have done CFA (US), ICWA, CAIIB, CS, LLB, PhD, M.Phil, or PG in any subject; are a Licentiate, Associate, or Fellow of Life Insurance, Actuary, or FFSI & FLMI from LOMA; or have cleared Civil Service Examinations conducted by UPSC.

• Such a candidate should also have three years of experience in the Financial Services sector or five years of experience in the Non-financial Services Industry before they appear for Exam 5.

• Challenge Status candidates can directly take CFP Certification Examination or Exam 5.

Once the candidates clear the CFP Certification Exam or Exam 5, they have to sign a Declaration that says that they will adhere to FPSB India's regulations. Once they are CFP Certified, FPSB India allows them to use CFP Marks, i.e. its logo and Certification in their marketing and communication mediums.

Exam Pattern for CFP Certification Exams

For Exam 1-4

• There will be multiple-choice objective-type questions with four alternatives each in each exam.

• Each paper will carry a total of 140 marks.

• There is no negative marking.

• In each exam, 1/5th of the marks will be allotted to the module - Introduction to Financial Planning.

• Candidates will have to secure at least 60% marks to clear each exam. Those who will have 80% or more marks will be awarded Grade A, those with 70% or more but less than 80% will be awarded Grade B, while those with 60% or more but less than 70% will be awarded Grade C.

For Exam 5

• Candidates need to study well probable case studies depicting real life Financial Planning situations on FPSB India website, out of which any two will be asked in the examination. They are not allowed to carry copies of the case studies to the examination hall.

• The candidates will have to assess financial status of the clients by analyzing and evaluating his information, and comprehend and analyze client-specific situations and select best solution for the client.

• There is no negative marking in the examination.

• Candidates have to procure at least 50% marks to clear the CFP Certification Exam. Those who get 50% or more but less than 60% are awarded Grade C, those who get 60% or more but less than 75% are awarded Grade B, while those who are awarded 75% or more are awarded Grade A.

Exam Results are displayed as soon as the candidate will finish and submit examination.

One has to renew their CFP Certification through Continuous Education and submitting a renewal fees of Rs 5,000 every year.

Authorized Education Providers for CFP Certification Education Program

It is necessary that the candidates should register with Education Providers approved by FPSB India for CFP Certification Education Provider. Currently, there are only 45 Authorized Education Providers in India with more than 75 branches in different cities that offer full-time, part-time, distance mode and e-learning mode Education Programs across the country. The fees vary from Rs 10,000 to Rs 1,00,000 depending on the programs candidates choose and the course material, mode of education delivery, and classroom intervention they need.

List of Authorized Education Providers for CFP Certification Education Programs is given below:

Know more about CFP Certification, ask your queries, clear your doubts, share your CFP grades and discuss about your CFP exam experiences here.

Compiled by Ruchi Shrimali (Shiksha.com)