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Investments are the bedrock of a financially secure and independent future. The right investments can help you achieve your financial goals and create a corpus for your retirement effectively. However, there is a range of investment options and avenues to choose from that can confuse most investors.
Hence, we need a professional who understands the investment landscape and is qualified to help us achieve our financial goals. This is the role of a Certified Financial Planner (CFP). Today, we will talk about CFPs and the roles they can play in helping you manage your finances optimally.
It is important to note that while life insurance should not be solely treated as an investment, it does come under financial planning. Therefore, as a CFP, your role and responsibility of explaining the importance of life insurance to your clients and the security it provides to their families can play a crucial role in helping people choose the right life insurance plan for their needs.
Who is a Certified Financial Planner?
A Certified Financial Planner (CFP) is a professional with certification from the Certified Financial Planner Board of Standards, Inc. A CFP advises individuals on managing their finances and investments and creating a financial plan for their future. They work in areas including investment planning, estate planning, tax* planning, insurance, and personal cash flows.
Tax* planning is also important if one has to buy a life insurance policy and make the premium payments to keep the coverage active. As a CFP, you understand how to claim tax deductions and exemptions on life insurance. While the life coverage itself should be an important highlight of a life insurance policy, the tax deductions and exemptions should be looked into as well so that one can benefit from savings on their life insurance plan. Many people also use life insurance for investment purposes; when advising such clients, you should understand their overall tax liability and how you can best help them with your knowledge.
How to Become a Certified Financial Planner in India?
A CFP certification is offered by the Financial Planning Standards Board (FPSB). The syllabus helps create finance professionals skilled in one or more of the following fields – financial planning, tax* planning, risk analysis, insurance planning, etc. The certification exam is conducted a year thrice. This is a globally-recognized certification with two pathways – Regular and Challenge depending on the applicant’s eligibility.
CFP Eligibility
The eligibility criteria are different for the two pathways:
Regular Pathway
Cleared Class 10/12 exams and enrolled in a Bachelor’s degree program
Must clear NSE exams 1-4
Challenge Pathway
A Chartered Accountant (Intermediate level), CFA (US), Company Secretary, LLB, ICWA, CAIIB, M Phil, PhD, Associate of Life Insurance, Actuary (India), Civil Service, etc.
Applicants are also required to opt for one of these tracks:
Investment Planning
Retirement and Tax* Planning
Risk and Estate Planning
Financial Planning
Three Routes for Completing CFP India
Candidates can opt for one of these three routes for completing the educational qualifications for completing CFP India:
Self-paced
This route is ideal for applicants who are comfortable studying at their own pace and learning on their own. They can register on the FPSB portal and access the study material. You can start preparing for the exam.
Instructor-led
This route is ideal for applicants who prefer an instructor for regulated learning. Applicants get access to study materials and an instructor who can offer offline or online classes. The usual duration of the instructor-led route is 8-12 weeks.
Prior-learning
Applicants with certain qualifications or work experience can be exempt from the course requirements and qualify for the prior-learning route. This can exempt them from some or all CFP exams.
CFP Syllabus
The CFP Syllabus includes:
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CFP Benefits in India
Here are the benefits of completing CFP certification in India:
Global recognition
An opportunity to establish a career in financial services
Dynamic opportunities to work
A stamp of competency
Apart from the above benefits, being a CFP in India also gives you a deeper understanding of the life insurance industry, the different policies and how they work to secure your clients and their families. As we know, life insurance is an essential part of financial planning and making the most of your knowledge to help someone choose the right life insurance plan can benefit them and also help you learn more about the intricate details of life insurance.
Why Do Investors Need a CFP?
Investors looking for a certified financial advisor tend to opt for CFP professionals due to the trustworthiness they offer. CFPs are the most experienced and knowledgeable financial advisors. They follow a strict code of ethics and standards with high levels of control. They are one of the few financial planners that offer a basket of services in financial management.
For example, if you are looking at retirement investment to create a corpus for your golden years, then a CFP can help you buy a retirement plan based on your unique needs. Tata AIA Life Insurance Company offers a range of plans to help you with your retirement investment.
Conclusion
If you are a finance professional looking to make your mark in the global financial markets, then a CFP certification can help you get an edge over your peers. Depending on your qualification and experience, you can choose the pathway and route to clear the exam and become a CFP. On the other hand, if you are an investor looking for financial advice, choosing a CFP can help you get one of the best advisory services in the country.
L&C/Advt/2023/Apr/1296
