BFSI Compass : Studying finances

CERTIFIED PERSONAL FINANCIAL ADVISOR CERTIFICATION FOR FINANCIAL PLANNING

The Certified Personal Financial Advisor (CPFA) is a certification conducted by the National Institute of Securities Markets (NISM), established by Securities and Exchange Board of India (SEBI) along with Financial Planning Corporation (India) Pvt. Ltd (FPCIL) to create a common minimum knowledge benchmark for people involved in financial advisory services business in India. FPCIL undertakes education activities in the financial planning segment.

This certification aims to enhance the quality of financial advisory and related services in the financial services industry. On successful completion of the examination, the advisor should:

- Know the basics of financial advisory, steps in the advisory process, making and implementation of financial plan. - 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. - Get oriented to the income tax, wealth tax and legalities of estate planning in personal finance, and regulatory aspects underlying advisory. - 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.

NISM NISM has established six distinct schools to cater the educational needs of various constituencies such as investor, issuers, intermediaries, regulatory staff, policy makers, academia and future professionals of securities markets.

FPCIL Financial Planning Corporation (India) Pvt. Ltd (FPCIL) undertakes education activities in the financial planning segment. FPCIL aims to create new horizons based on collective and shared vision along with all the stakeholders.

Assessment structure The examination consists of 60 questions each of 1 mark and 20 questions each of 2 marks, and should be completed in two hours. The questions are of multiple choice type, each question has a set of four alternative choices. The passing score is 60 per cent. There is no negative marking.

Who will benefit from CPFA Certification? CPFA examination is for professionals who offer personal finance and investment solutions to individuals.

CPFA (Certified Personal Financial Advisor) examination will be highly beneficial to: - Individual financial advisors - Employees of organisations 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. - Students aspiring for a career in personal financial planning and wealth management.

The primary objective of this certification examination is to create a minimum knowledge benchmark for professionals engaged in helping individuals manage their personal finance and investments. The examination covers:

1) 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.

2) Making a personal financial plan: Know the basics of financial advisory, steps in the advisory process, making and implementation of financial plan.

3) 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.

4) Tax and legal aspects: Get oriented to income tax, wealth tax and legalities of estate planning in personal finance, and regulatory aspects underlying advisory.

CPFA for independent financial advisors Independent Financial Advisors are an important and growing segment of professionals who contribute to the overall financial markets. The CPFA examination is a great opportunity for IFAs to be certified by a Neutral and Authoritative body established by SEBI.

Becoming a Certified Personal Financial Advisor (CPFA) has many advantages:

1) Benchmark knowledge: You will raise your knowledge level about financial planning and advisory to industry benchmark. 2) Gain trust: Clients will trust you much more with certification from a neutral body established by SEBI. 3) Competitive advantage: Gain an edge over peers in the industry. 4) Supplementary fees: Apart from commissions, being a certified advisor could generate additional advisory fees. CPFA equips you to move up the value chain, from just selling financial products to holistically planning and managing your client's investments over a long term.