Who is a Certified Financial Planner and How to be one?

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February 4, 2021
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Table of Contents

Introduction

A Certified Financial Planner (CFP) is a professional who helps you make financially prudent decisions. They have professional qualifications that certify them as someone who can manage your assets well. CFP can also be a good option for you if you are a finance enthusiast keen to explore careers in finance. Finances are an important determinant of how you live your life today. Good finances and financial planning are the keys to unlocking a financially secure future. Managing finances are necessary to be able to fulfill personal goals as well as family responsibilities. But, this is not always possible to do for everyone. They might not have the time or the right qualifications to work in this role. This is where a CFP comes in. A CFP is one of the most desired jobs for people committed to a lifetime of ethical financial planning. CFPs meet basic and ongoing educational, experience, and professional progress requirements. They pass an exam that assesses their competency and follows a code of ethics. They also pledge to provide financial planning in the best interests of clients and with ethical standards. The four parameters of excellence you have to pass to get a Certified Financial Planner qualification are:

  • Education
  • Exam
  • Experience
  • Ethics
certified financial planner

In India, the CFP is a globally recognized certification provided by the Financial Planning Standards Board (FPSB). This move was also taken to ease a structured learning program for financial advisors and aspirants for CFP in the country. In India, as of April 2019, the USA FPSB manages the CFP Certification.

What is the value of the Certified Financial Planner?

A CFP benefits three broad domains:

Consumers

The CFP works with individuals and families for financial planning and easy solutions through various stages of life. For example- They help a family to plan their finances for the next 5 years. With this written blueprint for savings, investments etc. the family feels more secure with their finances. In fact, with a CFP helping them, families have reported feeling more trustful. As a CFP, you will have the scope to manage the finances of many families. You will also help them achieve their financial goals, which is a fulfilling job!

Practitioners

CFPs have reported an increase in their salaries and faster promotions. They have also reported a growth in their client base and more job satisfaction. If you work in finance, a CFP qualification will enhance your career prospects. It will also pay you well and you will succeed easily!

Firms

Firms that have employed qualified Certified Financial Planners have found that it has numerous benefits! Starting with fewer client complaints to higher client retention rates, a number of firms have reported that employing CFP professionals has a positive impact on client satisfaction within the firm. Quite a few financial services or asset management firms have expressed interest in recruiting a higher number of CFP qualified professionals, given the increased benefits they provide to the company! If you work for a firm, gaining the CFP qualification will make you an asset to the company and increase your chances of building a great career for yourself!

What do you need to become a CFP?

As a CFP, you will have to develop financial plans for your clients. Most CFPs also have varied specializations. So, you should think about whether you have the necessary background and skill set to excel in this career. For enhancing your financial skill, you can post your doubts on websites like Chegg India where a subject matter expert will help you in solving them. After becoming a CFP, you can sign up on Chegg as a Finance Subject Matter Expert. This way, you can help others with their queries and also earn a good amount of cash working part-time. Besides, for being a successful CFP you must learn certain soft-skills along with your hard skills. You must be efficient in finding new clients and businesses and retaining them. A loyal client base is crucial for building a strong and fruitful career as a CFP. To maintain a client base and expanding it, you should provide good services to your existing clients so that you get client referrals. These are also an important source of new business as a CFP. Along with that, your sales and analytical abilities should also be strong so as to solve problems and offer the best services to your clients!

Steps to become a Certified Financial Planner in India

There are two pathways to becoming a CFP in India: Challenge and Regular The eligibility criteria for the two pathways are different. A Regular candidate must be a 10th or 12th pass at the time of application. While a Challenge candidate must be a CA / Intermediate level, CFA (US), CAIIB, CS, LLB, PhD, M.Phil, PG or ICWA. They can also be Licentiate/Associate/ Fellowship of Life Insurance, Actuary(India), FFSI & FLMI from LOMA, Civil Service Exam by UPSC. To fulfill the eligibility for a CFP qualification, you will have to opt for one of the four tracks given below:

  1. Investment Planning
  2. Retirement and Tax Planning
  3. Risk and Estate Planning
  4. Financial Planning

The FPSB Investment Planning Specialist Certification is currently offered by the FPSB. The other three courses will be rolled out soon.

For completing the education qualifications for Certified Financial Planning, you can choose any of the three available routes:

Self-Paced Education Route

If you are comfortable studying at your own pace and prefer learning on your own, then the self-paced study option is the right one for you. You can register on the FPSB portal to access your study materials for becoming a CFP. This will include textbook content, PPTs, quizzes, and practice tests. You can use this material to prepare for the certification by yourself. It is a great choice for self-study.

Instructor Led Education Route

If you prefer an instructor teaching you for more routine and regulated learning, this is a good option for you. Once you register with the FPSB and get access to your study materials, you will get an instructor who can either provide online or offline classes. The average duration of the course would be 8-12 weeks. It also depends depending upon the course material and frequency of classes. This is an excellent opportunity provided by the FPSB for those who learn better under the guidance of an instructor to study for the CFP.

Recognition of Prior-Learning Route

If you have professional experience or qualifications that can exempt you from the CFP course requirements, then you can check if you are eligible for the Recognition of Prior-Learning Route. If the board approves your application, you may get an exemption for some or all the CFP Exams. Currently, the registrations for the Investment  Planning Specialist Exam will open in August 2020. The dates will be announced shortly. The exams are not difficult to clear if you are willing to put in the required number of hours. Also, the job is rewarding after you get certified. Once you qualify, you need to meet the FPSB ethics and experience needs and pass the CFP exam. You will also have to pay an annual certification fee. Once you pass the exam and meet all the requirements set by the FPSB India, you will receive your certification. The certification recognizes you as a CFP and you can also use it to start your career in the financial planning domain.

Final Thoughts

CFP is an excellent career option for finance job aspirants in India. Having a CFP increases your chances of getting hired at wealth and asset management firms and banks. You can even run your own financial planning firm! The average salary of a CFP is around 3.5 Lakhs per annum, with increments and bonuses based on performance and other perks. If you are zealous about finance and would like to help people plan their finances, this is a bright career choice for you.  As a CFP, your job will be to analyze financial reports to estimate worth and work in insurance and retirement planning. You will also help in employee benefits, income tax planning, and managing assets. If you can network well and can put in effort towards your qualification, studying for the CFP exam is an excellent and prudent career choice!

You can become a Chegg Subject Matter Expert for Finance or Accountancy- earn and learn at the same time.

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