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Syllabus

MODULE V: Financial Plan Construction

COURSE DESCRIPTION: This module builds upon the foundations in financial planning and the knowledge requirements inModules 2 to 5 to enable the CFP professional to construct a comprehensive financial plan for a client. Miscellaneous topics arealso covered in this module.

LEARNING OBJECTIVES: At the end of this module, a student should be able to:

1.  Determining the client’s financial status by analyzing and evaluating the client's information. 2.  Developing and preparing a client-specific financial plan tailored to meet the goals and objectives of client,

commensurate with client’s value, temperament, and risk tolerance. 3.  Implement and monitor the financial plan.

Financial Planning Process

1.  Establishing client- planner relationships – 5 per cent weighta.  Explain issues and concepts related to overall financial planning process, as appropriate to the clientb.  Explain services provided, the process of planning, documentation requiredc.

 

Clarify client’s and certificant’s responsibilities2.

 

Gathering client data and determining goals and expectations  – 5 per cent weighta.  Obtain information from client through interview/ questionnaire about financial resources and obligationsb.  Determine client’s personal and financial goals, needs and prioritiesc.   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.  Determining the client’s financial status by analyzing and evalua ting the client's information - 25 per centweight

 A.  Generala.  Current financial status (e.g., assets, liabilities, cash flow, debt management)b.  Capital needsc.   Attitudes and expectationsd.  Risk tolerancee.  Risk managementf.  Risk exposure

B.  General Needsa.

 

Emergency fundsb.

  Children’s education c.

 

Children’s marriage d.  Buying real assets like home, car, durables, etc.e.  Future lifestyle needs

C.  Special needsa.  Divorce / remarriage considerationsb.  Charitable planningc.   Adult dependent needsd.  Disabled child needse.  Education needsf.  Terminal illness planningg.  Entrepreneurial needs planning

D.  Risk managementa.  Life insurance needs and current coverageb.  Disability insurance needs and current coveragec.  Medical insurance needs and current coveraged.  Long – term care insurance needs and current coveragee.  Homeowners insurance needs and current coveragef. 

 Auto insurance needs and current coverage

 

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g.  Commercial insurance needs and current coverageh.  Other liability insurance needs and current coverage (e.g., umbrella, professional, errors and omissions,

directors and officers)E.  Retirement

a.  Current retirement plan tax exposuresb.  Current retirement plansc.

 

Retirement strategiesF.  Employee benefits

a. 

 Available employee benefitsb.  Current participation in employee benefits

G.  Investmentsa.  Current investmentsb.  Current investment strategies and policies

H.  Taxationa.  Tax returnsb.  Current Tax strategiesc.  Tax compliance status (e.g., estimated tax )d.  Current tax liabilities

I.  Estate planninga.  Estate planning documentsb.  Estate planning strategies

4.  Analyze Client Objectives, Needs and Financial Situation  – 10 per cent weighta.   Analysis of relevant informationb.  Need for specialist advicec.  Issues that require further clarification

5.  Developing and presenting the financial plan  – 25 per cent weight A.  Developing and preparing a client-specific financial plan tailored to meet the goals and objectives of client,

commensurate with client’s value, temperament, and risk tolerance, covering: 1)

 

Financial positiona.  Current statementb.

 

Projected statementc.

 

Projected statement with recommendations2)  Cash flow

a.  Projectionsb.  Recommendationsc.  Projections with recommendations

3)  Capital needs at retirementa.  Projectionsb.  Recommendationsc.  Projections with recommendations

4)  Capital needs projections at deatha.  Recommendationsb.  Projections with recommendations

5)  Capital needs: disabilitya.  Recommendationsb.  Projections with recommendations

6)  Capital needs: General needsa.  Recommendationsb.

 

Projections with recommendations7)

 

Capital needs: special needsa.

 

Recommendationsb.  Projections with recommendations

8)  Income taxa.  Projectionsb.  Recommendationsc.  Projections with strategy recommendations

9)  Employee benefitsa.  Projections

 

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10)   Asset allocationa.  Statementb.  Strategy recommendationsc.  Statement with recommendations

11)  Investmenta.  Recommendationsb.

 

Policy statementc.  Policy statement with recommendations

12) 

Riska.   Assessmentb.  Recommendations

13)  List of prioritized action itemsa.  Presenting and reviewing the plan with the clientb.  Collaborating with the client to ensure that plan meets the goals and objectives of the client, and revising as

appropriate6.  Implementing the financial plan  – 10 per cent weight

a.   Assist the client in implementing and recommendationsb.  Coordinate as necessary with other professionals, such as accountants, attorneys, real estate agents,

investment advisors, stock brokers and insurance agents7.  Monitoring the financial plan – 10 per cent weight

a.  Monitor and evaluate soundness of recommendationsb.  Review the progress of the plan with the clientc.  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 circumstancese.  Make recommendations to accommodate new or changing circumstances

Miscellaneous Topics – 10 per cent weight

8.  Internet Resourcesa.

 

Internet usage and applicationb.

 

Transactions over the netc.  Issues of securityd.  Financial Planning using the Internet

9.  Foreign exchange issues for individualsa.  Foreign Exchange Management Act (FEMA)b.  Currency risk management

10.  Financial planning for special needs and clientsa.  Individual life cycleb.  Financial Planning for unmarried clients, single parents, widows/widowers, etc.c.  Financial Planning for returning Non Resident Indiansd.  Other special needs and options (e.g., divorce, bankruptcy)

Note: Please carry this document along with the Admit & Identity Card.

 Accessories permitted in the Examination Hall : - Candidates are permitted to use their calculators – scientific / financial and excel sheet (in their respective laptop). Candidates are expected to use only blue or black ballpoint pen, and if required, may usecolour pencils for any graphical depiction (Sketch pens or ink pen should be avoided). The candidates may also bring in their geometric tools like compass, scale, etc. It may be however noted that no exchange of accessories will be permitted during theexamination. In case any candidate is using laptop to work on MS-Excel, he / she shall not use / access any other program/s / data from the machine.

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