CFP (Certified Financial Planner)

Certified Financial Planner^CM Certification is an internationally accepted Financial Planning qualification. The qualification is recognized in more than 20 countries across the world. In India, the Certification is granted by Financial Planning Standards Board (FPSB India).

The qualification gears candidates to provide comprehensive financial advisory services to individuals. It covers insurance, retirement planning, investment, taxation and estate planning. For those looking for a career in the financial services sector, CFP^CM Certification provides a definite edge over other candidates. One’s expertise and credibility as a qualified professional is instantly communicated if he/she has a CFP^CMCertification. The services of CFP^CM Certificants are sought by Banks, Asset Management Companies, Insurance Companies, Equity Broking Houses and Financial Planning firms.

There are currently over 1,00,000 CFP^CM Certificants worldwide and around 450 + CFPs in India. As per industry estimates, the requirement for financial advisors will be approximately 50000 in the coming years.

Who Should take this course?

The financial market is rapidly changing. With new investment opportunities and schemes being launched, it is becoming increasingly neccessary to have the requisite skills in financial planning. If you have an aptitude for numbers and financial reasoning, then this course is for you.

There are about 8000+ Stocks, 1000+ Mutual Fund Schemes; Equity, Debt, Commodities and Real Estate; Investment, Insurance, Taxation and Estate planning. If you have a skill in financial planning, you can help your client sift through these ever increasing and complex choices. You can grow wealth for your clients and for yourself by building expertise in the financial planning process.

Program Modules

Module 1: Introduction to Financial Planning

What is overall comprehensive Financial Planning , The place, role & importance of each module in this process, Holistic approach & code of ethics, Personal/Intra personal communication skills required.

Module 2: Risk Analysis and Insurance Planning

Different kinds of risks & how to manage them, How does insurance works, Doctrines of insurance, How the cost of insurance is determined, Rating practices in general insurance, How to plan the insurance –Life stage wise? Case study

Module 3: Retirement Planning & Employee Benefits

Need for Retirement Planning, How to determine the retirement corpus & planning for it’s achievement, Statutory retirement benefits offered by the Govt. / Pvt. Employees, Mathematical calculation of Gratuity / EDLI / Leave Encashment / EPS 1995 / EPF/PPF, Tax treatment of the above, Group Insurance schemes, OASIS

Module 4: Investment Planning

Different classes of assets and their characteristics, Liquid Assets & Fixed Interest Earning Securities, Equity/Mutual Funds, Asset Allocation, Concept of Risk and Returns, Derivatives

Module 5: Tax Planning & Estate Planning

Tax Avoidance / Tax Evasion / Tax Planning, Ways & Means of Taxation Planning, Use of Taxation Planning in Management Decision Making Process, Taxation Laws & Rules applicable to Individuals / HUF / Firms / Companies Co. Op. Soc. Etc.

Module 6: Advanced Financial Planning

How to make a Full Financial Plan of an Individual

Investment Considerations in a Bear Market

The idea of investing is to make your money grow, but there are times when the stock market doesn’t want cooperate. Regular market fluctuations are common and expected, but extended periods of decline can strike fear in even seasoned investors. These bear markets can last months or even years. So, what should you do when faced with a bear market?

Examine Your Investment Objective

The first thing anyone should do before making changes to their portfolio is to think about what the purpose of the investment is. Is it money for retirement? College savings? A down payment on a house? Each of these investment goals have to be treated differently, and you need take into account what the money is going to be used for before you can decide if any changes need to be made.

The investment objective is important because it primarily deals with a specific time horizon. If you’re 35 years old and saving for retirement, you know that your money has a few decades left to grow. On the other hand, if you’re 35 and preparing to send your child off to college in 8 years, that is a completely different scenario.

Consider Your Risk Tolerance

Most people make changes to their investments because of losses. When you begin to see your account drop in value, it’s only natural to want to stop this from happening. Unfortunately, this type of behavior is reactionary, and it can often do more harm than good.

If the idea of seeing a loss on your statement has you feeling uneasy and ready to make changes, then chances are you’re taking on more risk than you should be. You should be allocating your investments in a way that minimizes risk, maximizes returns, and allows you to sleep at night regardless of what the market is doing. If you’re losing sleep because of a few bad days in the market, it’s time to reconsider how much risk you’re willing to take.

Don’t Chase the Market

You’ve probably heard the saying “buy low and sell high” many times, and we all know that’s how you make money, but the reality is that most people do just the opposite. The average investor will happily put more and more money into the market, and take on more risk when the market and economy is strong, and pull back or stop investing at all when the markets are heading south.

This is the opposite of what you want to do. If you’re only saving and investing when the markets are doing well, and investing little or selling stocks when the markets are down, you’re buying high and selling low, which is a very ineffective way to make money.

If you have a regular investment plan through your 401(k) or individual retirement accounts, keep those investments flowing through good times and bad. Because you’re investing on a regular and frequent interval, you’re buying stocks when they are up, down, and everywhere in-between. This is called dollar-cost averaging, and it is a great way to take some of the volatility out of your portfolio and maximize your overall returns.

Rebalance Your Portfolio

When the markets experience an extended period of growth or decline, it can throw your portfolio out of its original investment mix, or asset allocation. For example, if you’ve determined that a 70% stock and 30% bond portfolio is suitable for you and the stock market has taken a bit of a dive, you might find that after just six months, your investment mix might be at 60% stocks and 40% bonds, or even a 50% mix.

Ideally, you want to maintain your portfolio so that it remains close to your target investment mix. By re-balancing to your target mix, you’re forced to sell some of the investments that have done well, and buy more of the investments that haven’t done as well. This is allowing you to buy low and sell high instead of the reverse.

Shore Up Your Short-Term Investments

Investing your short-term savings takes a different approach from investing for retirement or other long-term goals. The general idea here is not to generate as much money as possible, but instead it is more focused on safety of principal while making as much money as possible.

When the economy is struggling, it pays to have a well-funded emergency fund. A weak economy can put some uncertainty in the air in terms of job security and obtaining credit. This is where your savings can come in handy. If you have the cash on hand in the event of an emergency, you don’t have to worry about using credit cards or possibly hurt your credit score.

So, when it comes to your savings, whether an emergency fund, money for a down payment on a house or a vehicle, or just the extra spending money you like to keep on hand, you want to make sure it’s safe and working as hard as it can for you. There are a number of places to safely keep your cash, so you’ll want to explore all the different options. It’s also a good idea to make sure your money is FDIC insured so that if times get really tough and your bank goes under, you’ll be protected.

Ways to Reduce Principle Balance of Loan Amount

The principle balance of a loan is the total amount owed. When the loan is being granted, amount to be repaid and the term for repayment is determined by the lender and the borrower has to follow it in order to avoid any penalty. The principle amount keeps reducing as the loan amount is repaid every month. Cutting the principle balance further down is indeed very difficult and requires a good budget, but it's not unachievable.

For reducing the principal, the best way is to use cash at hand. If one has any kind of saving such as bonds, investments, stocks, retirement funds or others, now is the time to utilize them. Based on the amount available with the payee, one can cut back a lot on his principle amount.

Another good way is to hike up the standard payment. To do that, one has to cut down his monthly spending such as eating out, frivolous shopping, traveling and other expenses. A little change in the lifestyle for a while will reduce quite a good amount from the principle balance. While beefing up the standard payments, one has to ensure that his lender is aware in order to precisely reduce the principle balance.

It's very important to consider equity amortization. Prior to making extra payments each month, one should consult the lender about paying principle balance without resulting in equity amortization. During the early years of loan repayments, principle balance is significantly lesser and a good amount can be repaid during this time.

Whatever extra amount one is paying a month, it's not supposed to give him relief the coming month. In other words, one has to keep in mind that if he repays good enough amount this month, he still has to make a payment the next month. And missing even a single payment calls for late fee. Therefore, he should plan his payments carefully.

One can make repayments biweekly. Choosing to repay the amount twice a month will help reduce the interest paid on the loan and decrease the principle amount rapidly. Additionally, one can seek financial help from a family member which will have a huge impact on the principle balance.

Reducing the principle amount is beneficial indeed but it will also wipe out the tax benefits. So, if a person is paying low interest, it will be quite beneficial for him to hang on to paying it over the tenure suggested by the bank. This will definitely serve him better plus he can put the extra money to a better use like a retirement fund.

Note: Prior to paying off money early in the tenure, one should ensure that the repayment schedule doesn't come with any penalty regarding prepayments.

The effect of inflation on your financial future

Inflation is a major factor in the realm of personal finance; it’s a risk that affects investment positively or negatively. In broad terms, inflation is the general increase in prices because of a change in the money supply or the availability of goods. It is not merely a macro-economic concept, since it is relevant to the finances of individuals in four primary ways:


· Determining the real return of an investment


· Evaluating the purchasing power risk


· Interest rates for savings


· Effect on financial instruments


The real return of an investment


This concept refers to the discounted nominal interest rate (rate after inflation is discounted). In the realm of investment, this effect is referred to as inflation risk. Although this risk has a significant effect on investors, the combined risks of taxation and inflation are far more serious than inflation risk on its own. A good example is the treatment of deferred annuities, where tax is paid on annualized payments and the payments are typically fixed. Even after discounting for inflation, tax must be levied against the accumulated nominal returns (and not the discounted one – unfortunately). The real return is further eroded by the effect of inflation on the payments received.


Purchasing power risk


Inflation is also influential in this aspect of investment risk. The loss of purchasing power on investment returns is tied to the reduced purchasing power per dollar. Purchasing power risk affects the capital invested significantly. With low-yield investment instruments, the purchasing power of the principal declines rapidly.


Interest rates

In macro-economics, there is a link between inflation and interest rates; a link that filters down to the individual. One of the methods of controlling inflation is to increase prime lending rates in an attempt to discourage borrowing. High interest rates also make investing more attractive than consumption, which reduces aggregate demand in the economy.


Financial instruments


Interestingly, inflation is not always a bad thing. Certain financial instruments benefit from high inflation. Usually these are the types of investments that have intrinsic value, because such assets remain in high demand regardless of the level of inflation. Examples of such assets include art, real estate, gold and other commodities. High inflation increases the absolute returns on such investments. Notice that the opposite happens with regard to cash/income instruments like savings accounts and money market funds. When inflation is low, it is less risky to invest in cash and income options.


While many persons who are risk averse are afraid to “lose,” inflation causes real loss for the ultra-conservative investor. Portfolio diversification is not only important in managing market risk, but can also mitigate inflation risk. While limiting investment in growth options reduces market risk, increasing investment in them reduces inflation risk. It is a trade-off that emphasizes the delicate balance of diversification. Such information can only redound to the benefit of a prudent investor.

Why You Need an Emergency Fund

In life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.

Financial emergencies can come in the form of a job loss, significant medical expenses, home or auto repairs or something you’ve never dreamed of. The last thing you want to do is be forced to rely on credit cards or a loan which could simply compound the problem.

How Big Should Your Emergency Fund Be?

Most experts agree that you should keep between three and six months worth of your living expenses set aside in your emergency fund. Depending on your specific situation and whether or not you have children, carry substantial debt and types of insurance coverage will determine what amount is best for you.

The reason you want to have three to six months of expenses saved up is that the most common reason for the need of an emergency fund is due to a sudden loss of income. If you or your spouse loses a job you still have bills to pay and it may take a few months to find suitable new employment. It is best to plan for a worst-cast scenario so that the smaller emergencies such as replacing the hot water heater that just went out will be easily covered.

Start Small

If you currently don’t have an emergency fund or find it difficult to save money the key is to start small. You have to realize that accumulating one month’s worth of expenses will take some time, let alone three to six months. If you set your immediate goals to be small and manageable you will have a better chance in reaching them.

The best way to get started would probably be through your bank. Open up a new savings account if you currently don’t have one and begin to save with this first. The next step is to get into the habit of making regular deposits into this account. Whether it is weekly, bi-weekly or monthly, create a schedule and stick to it. Once you make saving automatic you won’t even have to think about it.

If you feel it is difficult to begin saving simply start with a small amount. Maybe you begin with $10 a week initially. While this won’t amount add up all that quickly the important thing is to start putting something away and to make it a habit. After a few weeks you won’t even notice that $10 missing so you can bump it up to $15 or $20 after a month or so. You will begin to get used to that money not being there and can slightly increase it again.

Where to Keep Your Emergency Fund

You should start with a savings account because it is simple to use and generally does not cost anything. The convenience factor is what is important when getting started. As your account grows you will want to find an account that can earn reasonable interest so that your money is working for you. The next best options to look into are money market accounts or certificate of deposits (CDs).

It is important to keep this emergency fund in a place that will fairly liquid so that you can get to the money quickly in the event of an emergency. You also don’t want to have this money tied into stocks or mutual funds because the volatility of the market could cause you to lose money over the short-term.