cfp syllabus 2010

8/3/2019 CFP Syllabus 2010

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CFPCM,CERTIFIEDFINANCIALPLANNER

CMand arecertificationmarksownedoutsidetheU.S.byFinancial

PlanningStandardsBoardLtd.InstituteofFinancialPlanningisthemarkslicensingauthorityfortheCFPmarksin

theUnitedKingdom,throughagreementwithFPSB.

Page1

CERTIFIEDFINANCIALPLANNERCM

Certification

AssessmentCriteriaandStandards

1.Introduction

TheawardoftheCERTIFIEDFINANCIALPLANNERCM

certificationisdependentupondemonstrationof

knowledgeandskilltoadefinedinternationalstandard.

Thelearningcompetences(cognitiveorthinkingcompetences)requiredare:

Comprehension Interpreting,summarisingorcomputinggiveninformation Application Usinginformationtocarryoutafunction Analysis Separatinginformationintopartsuntiltherelationshipsbetweenthemareclearin

identifyingproblems

Synthesis Combininginformationtoproducesolutions Evaluation Decisionmakingorjudgementbasedoncriteriaorrationale

TheCFP

CM

Certification

is

based

on

apractical

assessment

of

applied

skills.

The

application

skills

are

assessedundertheCFPCertificationsyllabusandarelargelyconcernedwiththeapplicationof

knowledgecompetencestowrittencommunication,i.e.theabilitytopresentacomplexargumentand

complexsupportingdatatoaclientinacoherentandclearmanner. However,nonverbalandverbal

communicationskillswillnormallyberequiredwhenobtainingdata,orwhenexplainingawritten

communication.

Theseskillsareimpliedandsoarenotexplicitlyassessed. Theskilllevels(psychomotorcompetences)

requiredare:

Precision Skillsperformedwithaccuracy Articulation Tasksperformedinsequenceandwithconsistency Naturalisation Skillsareperformedeasily,automaticallyandwithoutreferencetoasource


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2.InternationalStandards

MinimumStandards

for

aComprehensive

Financial

Plan

FinancialPlanningisaprofessionalserviceforclientswhoneedobjectiveassistanceinorganisingtheir

personalorcorporatefinancialaffairstomorereadilyachievetheirgoals.

TheFinancialPlanningprocessincludessixsteps:

Collectingandassessingallrelevantpersonalandfinancialdata Identifyingfinancialobjectivesandproblems Processingandanalysinginformation Producingafinancialplan,theimplementationofwhichshouldmakethemosteffectiveuseofa

client's

resources

towards

the

achievement

of

his

objectives,

and

identifying

alternative

solutions

Implementingtheplan Reviewingprogressandmodifyingtheplanasnecessarytotakeaccountofchanged

circumstances

Comprehensive Financial Planningwill include thebasicareasof Financial Planning alongwithother

areasofconcerntotheclient. Thebasicareasinclude:

FinancialStatementanalysis InvestmentPlanning TaxPlanning RiskManagementandInsurance RetirementPlanning EstatePlanning

Otherareasofconcernmayinclude:

CashManagement EducationFunding EmployeeBenefits CharitablePlanning BusinessPlanning


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2.1StandardsforaComprehensivePersonalFinancialPlan

A

comprehensive

personal

financial

plan

should

contain

analysis

of

all

relevant

factors

relating

to

the

clientandshouldincorporatethesixcomponentsmentionedabove. Whileorderandstyleof

presentationmayvarydependingupontheclient'sindividualcircumstancesandneeds,theplanshould

include,butnotbelimitedto,thefollowing15elements:

ClientData ClientGoalsandObjectives IdentificationofIssuesandProblems Assumptions BalanceSheet/NetWorth CashFlowManagement IncomeTax RiskManagementandInsurance Investments RetirementPlanningandotherspecialneeds EstatePlanning Recommendations Implementation Periodicreviewsandplanupdates Compliancerequirementsofcomprehensivefinancialplans

2.2ElementsofaComprehensivePersonalFinancialPlan

2.2.1ClientData

Theclientdatacollectionformstoincluderelevantpersonalandfamilydataforpartiescoveredunder

theplan.

Thedatacollectionrecordsshouldbecompletedandkeptonfile. Theseshouldinclude,butnotbe

limitedto,name,address,birthdateandotherrelevantdatasuchasnamesandaddressesofother

specialistadvisersincludingaccountantsandsolicitors,namesofnextofkin,detailsofpowerof

attorney,andwhetherWillshavebeenmadeout. Allapplicableareasshouldbecompleted. Areason

thedatarecordsthatarenotrelevantshouldbeclearlymarkedN/A.

2.2.2ClientGoalsandObjectivesTheplannershouldprovideastatementoftheclient'sstatedgoalsandobjectives, indicatingpriorities

andincludingatimeframewhereapplicable.


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The statementwill form thebasic framework for thedevelopmentof the financialplan. The client's

goalsandobjectivesshouldbeexpressedinspecificandpreciselanguage.

2.2.3Identification

of

Issues

and

Problems

Theplannerlistspersonalandfinancialissuesandproblemswhichmayaffecttheclient,suchasmajor

illness,educationcosts,taxesetc. Whiletheclientmaybeawareofmany ifnotallofthe issues,the

plannermaydiscoverotherareasthatareorcoulddevelopintoaproblem.

These issues and problems,when combinedwith the client's goals andobjectiveswill complete the

frameworkanddirectionforthefinancialplan.

2.2.4.Assumptions

The planner should identify and state material assumptions used in the preparation of the plan.

Assumptionsshould include,butnotbe limitedto, inflation, investmentgrowthrate,earningsgrowth

rate,mortality,etc.

2.2.5.BalanceSheet/NetWorth

Theplan shouldhaveapresentationandanalysis to include,butnotbe limited to,a schedule listing

assetsandliabilitieswithacalculationofnetworthanditemisedschedulesofliabilitiesandassetstobe

includedasappropriate.

Footnotesshould

be

included

as

appropriate.

2.2.6.CashFlowManagement

Theplan shouldhave statements and analysis to include,butnot be limited to, a statement of the

client'ssourcesandusesoffundsforthecurrentyearandforallrelevantyears.

The planner should indicate net cash flow (positive and negative) as well as a separate income

statementwhereappropriate.

Sourcesofincomewouldincludeearnedincome,investmentincome,saleproceeds,giftsetc.

Usesofincomewouldincludelivingexpenses,debtservice,acquisitionofassets,taxespaidetc.

2.2.7.Taxation

Theplannershouldprovideataxstatementandanalysisto include,butnotbe limitedto,the income

andothertaxesforallrelevantyearscoveredbytheplan.

Computations should show the nature of the income and deductions in sufficient detail to permit

calculation of tax liability. The analysis should identify themarginal tax rate for each year and any


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specialsituationswhichaffect theclient's tax liability. Theclientshouldbe informed (by footnotes if

necessary) in the plan, of any taxes which have not been addressed. Income tax analysis and

recommendationson taxeffective investments shouldbe,whereappropriate, referred to theclient's

accountantor

tax

specialist/adviser.

2.2.8.RiskManagementandInsurance

Theplannershouldprovideananalysisoftheclient's financialexposurerelativetomortality (survivor

incomeandcapitalneedsanalysis)andmorbidity(impactofpoorhealth)asappropriate.

Theplannershouldprovidealistingandanalysisofcurrentpoliciesandproblemstoinclude,butnotbe

limitedto,life,disability,andmedicalinsurances.

2.2.9.

Investments

The planner should provide a breakdown of existing asset allocation and analysis or discussion of

liquidity,diversificationand investmentriskexposureoftheportfolioand includethesuitabilityofthe

investmentsinrelationshiptotheclient'sneeds,goalsandobjectives.

The financial plan should include, but not be limited to, risk tolerance, risk analysis of investments,

suitability,liquidityandassetallocation.

2.2.10.RetirementPlanningandOtherSpecialNeeds

Theplanner

should

provide

analysis

of

capital

needed

at

some

future

time

to

provide

for

financial

independence,retirementeducationorotherspecialneeds.

Theanalysisshould includeaprojectionofresourcesexpectedtobeavailabletomeetthoseneedsat

that time. Inflation, growth of assets and State and company benefits should be consideredwhere

applicable. Specialsectionsmayrequireseparateheadingsinthefinancialplan. Forexample,pension

benefitsmayrequireananalysisoftypesavailable,pretaxcontributionsneeded,taxtreatmentofplans

andinvestmentofpensionfundassets.

2.2.11.EstatePlanning

Thereshould

be

adiscussion

on

the

relevance

of

Wills,

trusts

and

the

various

powers

of

attorney.

Theplannershould,whereappropriate, include reference to theclient's solicitor foradviceonestate

matters.Theremaybeaneedto identifyassetstobe included intheclient'sestateandananalysisof

the control (title, trusteeship, power of attorney etc) disposition (transfer of ownership byWill to

individuals,beneficiariesor toa trust)and taxation (InheritanceTaxand income taxconsequences to

thebeneficiaries). Evidenceshouldbedocumentedthattheclient:

HaskeptWillsupdatedandthesewillbeappropriatetoestaterequirementsafterthefinancialplanisimplementedorhasarrangedtohavehisorhersolicitorsdrawupnewWills.


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2.2.12.

Recommendations

The planner should provide clearly identified and stated written recommendations relating to the

client'sgoalsandobjectivesaswellasfinancialissuesandproblems.

The plan should include a determination of the actions necessary to compensate for any shortfalls.

Recommendationsshouldnotbeconveyedbyimplicationorinference,andmaybegenericorspecific.

2.2.13.Implementation

The planner should provide a list of action points required to implement the recommendations,

indicatingresponsible

parties,

action

required

and

timing.

This

should

follow

the

client's

agreement

to

therecommendationsmade.

2.2.14.PeriodicReviewsandPlanUpdates

The plan should include a note of intended periodic reviews and updates of the client's plan and

implementationstrategy.

Theplanner'spolicymustbe stated. Forexample, isa reviewmadeat the requestof the client, six

monthlyorannually? Doesthereviewonlyconsiderinvestmentassetsorotheractions.

2.2.15.Compliance

Requirements

of

Comprehensive

Financial

Plans

Allplansmustmeetlegalcompliancerequirementsasatthedatethefinancialplanwasprepared.

[ForthepurposesofCFPCMCertificationCaseStudyentry,theserequirementsmaybeomitted]

2.3GeneralCommentsontheComprehensiveFinancialPlan

The planner is responsible for the above elements of a comprehensive financial plan, from data

gathering through toanalysis andpresentation to the client. Thoseelementsof theplanwhich the

plannerdoes

not

personally

perform

remain

the

responsibility

of

the

planner

to

co

ordinate

and

these

shouldbeindicatedintheplan.

The implications of the involvement of other familymembers and/or business partners in the plan

shouldbeconsidered.

When technical areas suchas legal, insuranceetc,arenotpersonallyperformedby theplanner, the

financial plan should include reference to the extent towhich these areas havebeenorwillbe co

ordinatedbytheplanner.


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Analysisofeachelementoftheplanshouldconsistofareviewofrelevantfacts,aconsiderationofthe

advantagesand/ordisadvantagesofthecurrentsituationandadeterminationofwhat, ifany,further

actionisrequired. Theplanshouldincludeasummarystatementprovidingtheplanner'scommentson

theanalysis

and

his

or

her

recommendations

where

appropriate

for

each

element

of

the

plan,

plus

a

statementoftheplanner'sclientreviewpolicy.


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3.AssessmentSyllabus

N.B.Candidatesarerequiredtosubmitacasestudybasedfinancialplanforassessment. Thefinancialplanwillbeassessedagainstthefollowingcompetencestatementsandtheaccompanyingperformancestandardsforeachcompetencestatements.The standardsmarkedwithMareMANDATORY. Eachandeverymandatory standardmustallbe

passedtopassthecertificationassessmentoverall.

PartA GeneralCompetences

1:Presentation

1.1 M Doesthereportorplanhaveastructurewhichislogicalandformaplanofaction?

1.2 Wastheuseoflanguageappropriatetotheclientinthecircumstances?

1.3 M Didthelanguageusedcommunicateideasclearlytoathirdparty?

1.4 Istheplanlogicallycollated?

1.5 Istheplaneasytoreadandfollow?

1.6 Istheplanboundorotherwisefastenedtogetherasadocument?

2:Clientneedsandobjectives

2.1M

Were

clients

needs,

objectives,

aspirations

or

concerns

established

and

recorded?

2.2 M Weretheobjectivesquantifiedandqualified(i.e.what,howmuch,whenetc.)?

2.3Wereadditionalneedsorissuesandproblems/potentialproblemsconsideredinrespectof

theseobjectivesandaconclusionreached?

3:Identificationofissuesandproblems3.1 M Wereappropriatepotentialproblemsqualified,quantifiedandclearlystatedfortherecord?

3.2Hasdiscussionandjustificationofrecommendationsbeenmadeforthreespecificfinancial

planningissues?

3.3Isthereclearreferencetoandjustificationfortheexclusionofanyotherfinancialplanning

issues?

4:Clientdata4.1 Hasclientsattitudetopersonalandbusinessriskmanagementbeenidentified?

4.2 M Hasclientsinvestmentriskattitudebeenidentifiedforeachobjective?

4.3 Doesclientdataincludesufficienthardfacttoadviseoneachobjectiveidentified?

4.4 Istheclientdatacollatedandunderstandablebyathirdpartywithinthereport?


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5:Assumptions

5.1 MWereassumptionsregardinginvestmentgrowth,priceinflationandearningsinflation

discussed?5.2 M Wereotherrelevantworkingassumptionsstatedanddiscussed?

5.3 M Werethevariousassumptionsmadeadequatefortheadvicerequired?

5.4 M Werealltheassumptionsstatedbytheadviserreasoned?

5.5 Weretheassumptionsstatedbytheadviserreasonable?

6:Abalancesheet/networthstatementhasbeenproduced?6.1 M Wasastatementofnetworthproduced?

6.2 M Doesitincludeallrelevantassetsandistheownershipbasisidentifiedaccurately?

6.3

Does

it

include

all

relevant

debt

and

is

this

apportioned

accurately?

6.4 Isitclearwhetherthisrelatestolifetimeordeathorboth(theremaybemorethanone).

7:IncomeTaxCalculation7.1 M Wasananalysisproducedforeachclient?

7.2 Isitcleartowhichtimeperioditrelates?

7.3 M Isittechnicallyaccurate?

7.4 Hasthetaxpositionbeenreviewedresultingincommentstotheclients?

8:Income

and

expenditure/cash

flow

8.1 M Wasananalysisofincomeandexpenditureproduced?

8.2 M Isthetimeperiodtowhichitrelates,clearlyidentified?

8.3 Doesitidentifygrossandnetincome?

8.4 Doesitapportionincomebetweenrecipientswherenecessary?

8.5 M Doesitcorrectlyidentifyshortfallorsurplusofincomeoverexpenditure?

8.6Is there reference toand/ordiscussionofnet cash flow (spendable income) in relation to

jointincomeand/oreachclient(wheremorethanone).

8.7 Doesitincludeallrelevantassetsandareirregularcapitalreceiptsseparatelyidentified?

8.8 Arecashflow/spendableincomeobjectivesestablishedinlinewiththeclientswishes?

8.9 M

Isit

clear

whether

the

clients

aspirations

can

be

achieved

within

current

and/or

future

cash

flowconstraintsorifnotcanthesolutionbetrimmed/adjustedorprioritisedtofitcashflow

constraints?

8.10 Hasliquidityand/oracashreservebeenconsidered?


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9:Recommendations,ImplementationandReview

9.1 MArerecommendationsmadeforeachoftheproblems/concerns, identifiedandeachofthe

goals/objectivesidentified?

9.2 M Arethereclearexplanationsofhowtheproposedsolutionsolvestheproblem?

9.3 MArerequiredactions,timing,partiesandresponsibilitiesstatedorlisted(subjecttoclients

prioragreement)?

9.4 M Hasaclearactionplanbeenagreedwiththeclients?

9.5 MIs the solution generally suitable for the client and no evidence of unsuitable advice

demonstrated?

9.6 Arereviewperiods,updatesandactionsstated?

9.7 M Arereviewcontents,responsibilitiesandpartiesclearlyidentified?

9.8Isitclearhowareviewwillbeinitiated(e.g.atclientrequestorbyFinancialPlannerannually

orhalfyearly)?

9.9 M Dothesolutionsmatchtheclientsagreedinvestmentriskattitude(whererelevant)?

9.10Istheownershipandmethodofarrangingpolicies/assetsclearlyexplained(i.e.underwriting

process,whotakesactiontoimplementthisprocess)?


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PartB TechnicalCompetences

Please

note,

candidates

will

be

assessed

on

three

of

these

technical

competences.

Candidates

should

read the information at the start of the case studyfor guidance on which of the technical areas toaddress. Insomecases,thetechnicalareaswillbespecified,inothers,candidatescanselectfromalist.1:Personalriskmanagement/insurance1.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

1.2Hastheclientsfinancialexposuretomortalityrisk(riskofdeath)andmorbidityrisk(riskof

illhealthorinjury)beendiscussed?

1.3Haveexistingriskmanagementstrategiesorinsurancepoliciesbeenanalysedandtakeninto

account(includingsocialsecurity,pensionsoremployeebenefits)?

1.4

Havethesolutionsbeenexplained,e.g.intermsofproviding:

acapitalsumtorepaydebt; acapitalsumforaspecificpurpose; acapitalsumtoproduceanincomebyinvestment; areplacementregularincomestreambyinsurance?

1.5Arethesolutionsclearlyexplainedtotheclientstatingwhyrecommendedandhowitsolves

theproblem?

1.6 Havetaxationconsiderationsofsolutionsbeentakenintoaccount?

1.7Have appropriate qualifications, caveats and implications been stated (e.g., taxation,

underwriting,legalorgenericcontractlimitations)?

1.8 Aretheproposedsolutionsaffordablewithinparametersagreedwiththeclient?

1.9 Dothesolutionsmatchtheclientsagreedinvestmentriskattitude(whererelevant)?

1.10Istheownershipandmethodofarrangingpolicies/assetsclearlyexplained(i.e.underwriting

process,whotakesactiontoimplementthisprocess)?

1.11 Havesocialsecuritybenefitsbeentakenintoaccountwhereapplicable?

1.12 M Doeachoftheproposedsolutionsmeettheclientsagreedobjectivesasfullyaspossible?

1.13 M Arethesolutionsgenerallytechnicallyaccurate?

2:Investments2.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

2.2

Haveexisting

portfolio

parameters

been

clearly

established

and

stated

(i.e.

which

assets

are

tobeincluded/excluded,istheportfoliojointorindividual)?

2.3 Arerealisablecapitalassetstakenintoaccountwherenecessary?

2.4Ifajointportfolioisbeingrecommended,haveagreedindividualownershiplimitationsbeen

addressedandstated?

2.5

Withintheclientsexistingagreedportfolio,havetheassetsbeenanalysedbytaxation,

vehicle(i.e.producttype),ownership,underlyingassets/fund,incomeproducedandthen

comparedagainstthedesiredmodelportfolioparametersagreedwiththeclient?

2.6Hasconsiderationbeengiventocomparingtheclientsagreedrisktoleranceagainstthe

existingportfolioandgapsidentified?


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2.7

Hasconsiderationbeengivento:

systematicandnonsystematicrisk(theriskwithinmarketoreconomy);

absoluterisk(theriskofariseorfallinvalue); comparativerisk(theriskofariseorfallcomparedagainstinflationoranotherasset)?

2.8

Hasconsiderationbeengiventodiversificationtoreducetheriskassociatedwithasset

concentration:

withinmarket/sectors

withinassettypes

2.9 Hasallowancebeenmadeforliquidity(bothcurrentrequirementandfuturerequirements)?

2.10 Haveallassumptionsandtimescalesbeenidentifiedandexplained?

2.11Arealltheassumptionsreasoned,reasonableandtakeaccountofvariationsinreturnsof

differentassetclasses(i.e.outorunderperformance)?

2.12

Has

account

been

taken

of

both

current

and

future

income

requirements?

2.13 Hasasset/productownershipbeenstatedandjustified?

2.14Haveanyrelevantimplications,limitationsorlegal/taxationconditionsbeenstatedand

explainedtotheclient?

2.15 MDoestherecommendedportfolioclearlymeettheclientsagreedobjectivesandneedsas

fullyaspossible?


3:PersonalRetirementPlanning(includingBusinessOwners)3.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

3.2

Has

an

analysis

been

carried

out

of

income

and

capital

required

to

achieve

current

or

future

objectivesandneedsandthetimescale(s)applicable?

3.3 Haveexistingoranticipatedassetsorcapitalbeentakenintoaccount?

3.4Hasreferencebeenmadetospecificobjectives(e.g.pensionfunding,longtermcarecosts)

andindividualsolutionsdesignedandintegratedtomeetthesevariousobjectives?

3.5 Haveassumptionsbeenstatedandaretheyreasonedandreasonable?

3.6 Havesocialsecuritybenefitsandcontributionsbeentakenintoaccount?

3.7 Havetaxationconsiderationsbeentakenintoaccount?

3.8 Aresolutionsconsistentwiththeclientsagreedinvestmentattitude?

3.9Canthecapitalorexpendituresfromincomerequiredbeaffordedbasedontheclients

agreed

cashflow/expenditure

pattern?

3.10 Haveappropriatemortalityandmorbidityrisksbeentakenintoaccountandquantified?

3.11 Havesolutionsbeenrecommendedtotheseriskswhererequired?

3.12Haveanyrelevant implications, limitationsor legal/taxationconditions/consequencesbeen

statedandexplained?

3.13 MDothesolutionsrecommendedclearlymeettheclientsagreedneedsandobjectivesasfully

aspossible?



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4:EstatePlanning4.1 M Havetheclientsestateplanningneedsandobjectivesbeenclearlyquantified/qualified?

4.2

Hasconsideration

been

given

to

the

most

appropriate

method(s)

of

achieving

the

clients

wishes,e.g.

Useofwills Useoftrusts Useof powersofattorney Useofgifts?

4.3Havetaxationconsiderationsbeentaken intoaccountforboththeclientandthe intended

beneficiaries?

4.4 Haveappropriate/relevantimplicationsorlimitationsbeendrawntotheclientsattention?

4.5Haveanyknockoneffectsonotherareasoffinancialplanningbeendrawntotheclients

attentionandexplained(e.g.longtermcare/depletionofestatevalue)?

4.6 Hasthepotentialneedtorefertotheclientsspecialist legaland/ortaxationadvisersbeenstatedandexplained?

4.7Hasthemostappropriateownershipofassetstoachievetheclientsobjectivesbeenstated

andexplained?

4.8Is thereevidence that theclient is recommended todrawupnewWillsoramendexisting

Willsortrustsorwillmaintainuptodatelegaldocumentstoachievetheobjectives?

4.9 MDotherecommendationsclearlymeettheclientsagreedobjectivesandneedsasfullyas

possible?


5:Educationalfunding5.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

5.2Hasananalysisbeencarriedoutofincomeandcapitalrequiredtoachievecurrentorfuture

objectivesandneedsandthetimescale(s)applicable?


5.4

Has reference been made to obstacles of achieving the clients specific objective (e.g.

pension funding, longtermcarecosts)and individual solutionsdesignedand integratedto

meetthesevariousobjectives?


5.6 Havesocialsecuritybenefitsandcontributionsbeentakenintoaccount?


5.8 Aresolutionsconsistentwiththeclientsagreedinvestmentattitude?

5.9Canthecapitalorexpendituresfromincomerequiredbeaffordedbasedontheclients

agreedcashflow/expenditurepattern?




statedandexplained?


aspossible?


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6:Special

Needs

(e.g.

long

term

care/structured

settlements)

6.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

6.2

Has reference been made to obstacles of achieving the clients specific objective (e.g.

pension funding, longtermcarecosts)and individualsolutionsdesignedand integratedto

meetthesevariousobjectives?



6.5Have social security benefits and contributions been taken into account (e.g. attendance

allowance)?


6.7

Aresolutions

consistent

with

the

clients

agreed

investment

attitude?

6.8Can the capital or expenditures from income required be afforded based on the clients

agreedcashflow/expenditurepattern?




statedandexplained(e.g.preservationofestatevalue)?


aspossible?


7:TaxationandNationalInsurance7.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

7.2 Istherereferencetoanddiscussionofeachclientstaxationposition?

7.3 Aretaxesreferredtotheonlyrelevanttaxeswithothertaxesnotrelevant?

7.4

Doesreferencetotaxesinclude(whereappropriate):

Incometaxes(e.g.CorporationTax/IncomeTax) Capitaltaxes(e.g.CGT/IHT) Advaloremtax/duty(e.g.,VAT/StampDuty) NationalInsuranceContributionsLocal

taxation

(e.g.

Council

Tax/Rates)

7.5Is there sufficient detail to compute/has computation been done to produce an

approximatedtaxliabilityforeachrelevanttax?

7.6 Istaxationcommentgenerallytechnicallyaccurate?

7.7Does it clearly identify the highest marginal rate(s) of taxation applicable to each year

coveredbytheplan?

7.8Have all relevant allowances, exemptions, reliefs or other allowable deductions been

identifiedandtakenintoaccount?

7.9 Haveanyrelevantimplications(e.g.AgeAllowancereduction)beenidentifiedand


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discussed?

7.10

Havetaxefficientinvestmentsand/orothertaxmitigationactionsbeendrawntotheclients

attention(possiblyinothersectionsofthereportprovidingtheclientsattentionisdrawnto

theappropriatesection)?

7.11Is referencemade toanappropriate specialistadviser, ifneeded,withaclearexplanation

givenastowhythisisrequired?

7.12 MDo the recommendationsclearlymeet the clientsagreedobjectivesandneedsas fullyas

possible?


8:DebtManagement8.1 M Hastheclientsproblem/requirementbeenclearlydefined,agreedandstated?

8.2 Haveanycrisispoints/timescalesbeenidentified,agreedandstated?

8.3 Havetheclientsassetsandliabilitiesbeenquantified,qualifiedandanalysed?

8.4 Hastheclientsincomeandexpenditurebeenquantified,qualifiedandanalysed?

8.5 Hasthedebtservicingabilityandhistorybeenanalysedandassessed?

8.6 Haverelevantlegal,taxationandcostconstraintsbeentakenintoaccount?

8.7 Whererelevant,hastheclientbeenadvisedofother/specialistsourcesofadvice?

8.8 Hasrenegotiationorrefinancingofdebtonimprovedtermsbeenconsidered?

8.9 Haveappropriatemortalityandmorbidityrisksbeenanalysedandcommentedupon?

8.10Haveappropriateandtechnicallyaccuraterecommendationsbeenmade includingrelevant

legal,taxationandownershipimplications?

8.11 M Arerecommendationsclearlystated,justifiedanddotheymeettheclientsobjectives/needsasfullyaspossible?


9:BusinessSuccessionPlanning

9.1 MHave the clients succession planning options and objectives been clearly and accurately

stated?

9.2Hastheneed to refertobusiness legaldocumentsbeenconsidered,statedandexplained,

e.g.,PartnershipAgreementorCompanyMemorandumandArticlesofAssociation?

9.3

Has considerationbeengiven to themostappropriatemethod(s)ofachieving the clients

wishes,e.g.

Useofwills Useoftrusts Useofpowersofattorney Useofgifts Sharepurchaseagreements

9.4 Hasfundingofsharepurchasebeenconsidered(whererelevant)?

9.5Havetaxationconsiderationsbeentaken intoaccountforboththeclientandthe intended

beneficiaries/purchaser?

9.6 Aretimescalesofsuccessionplanningobjectivesdiscussed(e.g. lackoftrainedchildtotake


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overthebusiness)?

9.7 Haveappropriate/relevantimplicationsorlimitationsbeendrawntotheclientsattention?

9.8

Hasbusiness

valuation

been

explored

and

the

implications,

complexities

and

potential

solutionsexplained?

9.9Haveanyknockoneffectsonotherareasoffinancialplanningbeendrawntotheclients

attentionandexplained?

9.10Hasthepotentialneedtorefertotheclientsspecialist legaland/ortaxationadvisersbeen

statedandexplained?

9.11 M Aresolutionsrecommendedgenerallytechnicallyaccurate?


aspossible?

10:AcquisitionorDisposalofaBusiness

10.1 MHave

needs

and

objectives

been

stated

and

quantified/qualified

and

agreed

where

appropriate?

10.2Has the client been advised to consultwith other relevant advisers (legal, tax, pension,

etc.)?

10.3Has the acquisition or disposal method been discussed, implications stated and a

recommendationstated?

10.4Haveallassumptionsandtimescalesbeen identifiedandexplained (i.e.whenconsidering

disposingorbuyingabusiness)?

10.5Hastheclientbeenappraisedoftheneedforvariousguarantees/undertakings/warranties

andconfidentiality?

10.6Where relevant, has the client been advised of theneed for a businessplan, cash flow

forecast,operating

budget

and

profit

growth

forecast?

10.7Have theclientsassetsbeenanalysedandassessedregarding financinganacquisitionor

proceedsofadisposal?

10.8 Havetherelevantlegalstructuresbeendiscussedandagreed?

10.9Havetherelevantlegal/taxationconstraintsbeendiscussed/agreed(e.g.employmentlaw/

socialsecuritylaw/companylaw)?

10.10 Havetheemployeerelationsimplicationsbeenconsidered?

10.11 Haverelevanttaxmitigationoptionsbeenidentified,discussedandagreed/recommended?

10.12

Havetherelevantoptionsforfinancing(saleorpurchase),consideration(saleprice/value)

and payment (timing and amounts) been identified, considered and agreement

reached/recommendationmade(whereappropriate)?

10.13 MDo

the

solutions

recommended

clearly

meet

the

clients

needs

and

objectives

as

fully

as

possible?

10.14 M Arethesolutionsrecommendedgenerallytechnicallyaccurate?

11:BusinessRiskManagement/Insurance11.1 M Haveneedsandobjectivesbeenstatedandquantified/qualified?

11.2Haveexisting riskmanagement strategiesor insurancepoliciesbeenanalysedand taken

intoaccount(includingsocialsecurityorpensions)?

11.3 Havethesolutionsbeenexplained,e.g.intermsofproviding:


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4.CFPCM

CertificationKnowledgeSyllabus

CFP Certification candidates must provide evidence that they have met the knowledge and

understandingrequirementssetout intheKnowledgeSyllabus (below). At leastthreeyearsrelevant

financialplanningexperiencemustbedemonstratedinadditiontotheknowledgerequirement.

FinancialPlanningisamultidisciplinaryprofession. Thereforeanyprofessionalqualificationrelevantto

personaland/orbusinessFinancialPlanningwillnormallybeconsideredasevidenceofmeetingallor

partof theCFPCertificationKnowledgeSyllabus requirements. However, the followingqualifications

aredeemed sufficient (*as long as specific examination subjects arepassed), tomeet theknowledgerequirementsinconjunctionwiththeCFPCertification:

Tobe

eligible

to

embark

on

the

process

of

becoming

aCFP

practitioner

there

are

three

compulsory

criteriawhichmustbemet:

Aminimumofthreeyearsexperienceoffinancialservices AnFSSCAppropriateExaminationforAdvisingonPackagedProducts Anexaminationpassineachofthefollowingareas:

Taxation

FinancialPlanning

AdvancedTechnicalArea

Forfurtherdetails,pleaseseetheIFPwebsite:

http://www.financialplanning.org.uk/planners/cfp_entry_requirements.cfm

4.1The

Financial

Planning

Process

4.1.1 Candidatesshouldknow,understandandbeabletoapplytheFinancialPlanningprocessandhowitdiffersfromthefinancialadvisoryprocess.

TheFinancial

Planningprocess:

gatheringdata establishingclientobjectives processingandanalysinginformation recommendingacomprehensiveplan implementationoftheplan reviewingtheplan

Thefinancialadvisoryprocess:

gatheringdata establishingclientobjectives processingandanalysinginformation


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recommendingasolution implementingthesolution

4.1.2

Candidates

should

know,understand

and

be

able

toapply:

theskillsrequiredtogatherandrecorddata theskillsrequiredtoagreeandrecordclientneeds,objectivesandpriorities thedifferencebetweenobjectives,goalsandneeds theneedforgoodwritten,verbalandnonverbalcommunication theneedtoquantifyandqualifydata theneedtoestablishattitudinaldata,especiallyregardinginvestment,morbidityandmortality

risks

theneedtolinkriskattitudetotimeandpurpose

4.1.3Candidates

should

knowandunderstandtheimportanceofandbeabletoapply:

experience legalknowledge taxationknowledge productknowledge professionalcontacts interpersonalskills tosynthesiseasolutiontomeetaclientsagreedneeds,prioritiesandaspirationsasfullyas

possible

4.1.4Candidates

should

know,understandandbeabletoapplytheFinancialPlanningprocessto

differenttypesofclient:

individuals soletraders/partnerships companiesandothercorporatebodies trustfundsandothercollectiveentities

4.2PersonalFinancialPlanning

4.2.2Candidates

should know, understand, and be able to apply the following to the level of

performingrelativelystraightforwardcomputationsbasedongivendata:IncomeTax

residenceanddomicilestatus schedules rates reliefs allowances paymentdates


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taxableincometypes nontaxableincometypes benefitsinkind earnedandunearnedincome taxationdeductedatsource taxcredits

NationalInsurance

contractedinliabilityforemployerandemployee contractedoutliabilityforemployerandemployee selfemployedliability benefitsinkind voluntarycontributions

CapitalGains

Tax

(CGT)

residenceanddomicilestatus gainsandlosses indexation reliefsandallowances exemptions basisofchargeandassessment paymentdates

InheritanceTax(IHT)

residenceanddomicilestatus basisofcharge chargeablelifetimegifts potentiallyexempttransfers reliefsandallowances exemptions theNilRateBand nonchargeablelifetimegift

4.2.2 Candidates should be able to demonstrate an awareness and applicationof the taxationaspectsofthefollowing:

socialsecuritybenefitsentitlementfortheselfemployedandemployees rulesforpensionprovisionfortheemployedandemployees taxationofpensionbenefitsandsocialsecuritybenefits taxationofotheremployeebenefits,e.g.ProfitRelatedPay,ShareOptionSchemes,ProfitSharingSchemesandCafeteriaBenefits/BenefitsinKind

typesofhousepurchaseborrowingandrepaymentvehicles marriage,separation,divorceandmaintenance bringupchildren retirementandAgeAllowance


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4.2.3Candidates

should

be

able

to

demonstrate

knowledge,

understanding

and

application

of

the

taxationofthefollowingtypesofinvestmentsinFinancialPlanning:

Onshore

depositbasedinvestments governmentbonds(gilts)LocalAuthoritybonds equitiesincludingInvestmentTrusts NationalSavings CorporateBonds insurancepolicies/funds unittrusts/openendedinvestmentcompanies(OEICS) IndividualSavingsAccounts(ISAs) PermanentInterestBearingShares(PIBS) VentureCapitalTrusts EnterpriseInvestmentSchemes Property(includingroomlettings) Lloydsmembership forestry/woodlands employeeshareschemes privatecompanyinvestment commodities derivatives

Offshore rollupfunds distributorandnondistributorfunds currencyfunds offshoreinsurance,OEICandUCITfunds

4.2.4 Candidatesshouldknow,understandandbeabletoapplythefollowinglegalaspectsoftrusts:

definition certainties relationshipbetweentrusteeandbeneficiary rightsanddutiesoftrustees thefunctionofthetrustdeed creationofatrust statutoryandnonstatutorytrusts theprovisionsoftheMarriedWomensPropertyAct1882 theprovisionsoftheTrusteeAct1925 theLawofPropertyAct1925


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typesoftrust;base,discretionary,powerofappointment,lifeinterest accumulationandmaintenance,express,implied,constructive,overseas/offshore

4.2.5Candidatesshouldknow,understandandbeabletoapplythefollowinginvestmentaspects

oftrusts: theprovisionoftheTrusteeInvestmentAct1961 thepowerscontainedwithinthetrustdeed theownershipofassets apportionmentofcapitalandincome dutyofconversion theobligationtoseekinvestmentadvice

4.2.6Candidates

should

know,understandandbeabletoapplythefollowingaspectsoftaxation

aspectsoftrusts: theapplicationofIncomeTaxtotrusteesandbeneficiaries theapplicationofCapitalGainsTaxtosettlors,trusteesandbeneficiaries theapplicationofInheritanceTaxtosettlors,trusteesandbeneficiaries calculatesimpleexamplesoftaxliabilitiesforeachoftheabove,basedongivendata theabilityoftruststoregisterforVAT theneedfortrustaccountsandtaxreturns

4.2.7 Candidatesshouldknow,understandandbeabletoapplythefollowingaspectsofWillsandintestacy:

conditionsforavalidWill Intestacyrules postdeathdeedofvariation Willtrusts rightstodisdain jointtenancyandtenancyincommon provisionsoftheAdministrationofEstatesAct1925.

4.2.8

Candidates

should

know,understand

and

be

able

to

applythe

uses

of

trusts

for

tax

mitigationandwiderFinancialPlanningincluding: certaintyofintention avoidanceordeferraloftaxation usesinfamilyprotection usesinbusinessprotection usesininvestmentstrategy usesinfamilyorbusinesssuccessionplanning usesinpensionplanning


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4.2.9Candidates

should

know,understandandbeabletoapply theuseoftrusts inestablishing

andadministering: personalpensionschemes occupationalpensionschemes unittrusts charitabletrustsandeducationaltrusts taxationimplicationsofeachoftheabove

4.2.10 Candidates should know, understand and be able to apply the importance and use ofcompoundinterestindetermining:

therelativevalueofonesumtoanother,overtime theaccumulationofmoney,overtime thedepreciationofmoney,overtime

4.2.11 Candidates should know, understand and be able to apply the following aspects ofinvestmentrisk:

absoluterisk relativerisk relativeriskovertime(e.g.,inflation) riskinrelationtoobjective clientfocusedriskattitudes theprobabilityofclientshavingdifferentriskattitudesrelatedtodifferentobjectives riskandreturn(capitalandinterest)

4.2.12 Candidates should know, understand and be able to apply the following aspects ofmorbidityandmortalityrisk:

applicationtolifeandhealthinsurances underwriting lifestyle occupation thenatureoftheriskthatcanbecoveredandmanaged theimportanceoftheclientsattitude

4.2.13 Candidates should know, understand and be able to apply the following aspects ofinvestmentportfolioconstruction:

theprinciplesofmeetingclientsneedsinportfolioconstruction theprinciplesofbalanceconcentrationanddiversification


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therelevanceoftime,liquidityandtaxationinselectinginvestmentvehicles commoninvestmentterminologyandmarketpractices

4.2.14 Candidates should be able to demonstrate and apply a detailed knowledge ofUK and

overseasinvestmentvehiclesinportfolioconstruction: depositbasedinvestments bondsandotherfixedinterestsecurities(governmentandcorporate) packagedinvestmentproducts(insuranceandfriendlysocietypolicies) collectiveinvestmentvehicles(OIECS,investmenttrustsandunittrusts) equities(quotedandunquoted) physicalcommodities(includingfutures) derivatives(futuresandoptions)special

tax

incentives

schemes

(enterprise

investment

schemes

and

venture

capital

trusts,

enterprisezonesetc.)

property(commercial,residentialandholiday) Lloydsinsurancemarketmembership collectibles(antiques,worksofart,etc.) principal retirementplanningvehicles (personalandemployer sponsoredpension fundsorsimilar)

4.2.15 Candidatesshouldknow,understandandbeabletoapplytheprinciplesof: benchmarkingofperformanceobjectives performancemeasurement

4.2.16 Candidatesshouldbeabletodemonstratetheneedformonitoringandreviewofportfolioagainstclientsevolvingneeds,objectivesandpriorities.

4.3RetirementPlanningforIndividualsandBusinesses

4.3.1 Candidatesshouldknow,understandandbeabletoapply: thelegalframeworkofpensionprovisionforindividualsandemployees therelationshipbetweenprivateandstatepensionprovision thetaxationframeworkofpensionprovisionforindividualsandemployees theprinciplesofcarrybackandcarryforwardofunusedpersonalpensionrelief understandtherelationshipbetween:

o retirementannuitypolicies;o personalpensionpolicies;o occupationalpensionschemes.

4.3.2 Candidatesshouldknow,understandandbeabletoapplytheuseofpensionstosoletraders,partnersandthoseinnonpensionableemployment.


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4.3.3Candidates

should

know,understandandbeabletoapply:

thelegalframeworkforoccupationalpensions thetaxationframeworkforoccupationalpensions thebasisofapprovalandexemptapproval fundingmethodsandlimits;and investmentprinciplesasappliedtopensionfunds.

4.3.4 Candidates should be aware of the relationship between UK State and private pensionprovisionandoverseasstateandprivatepensionprovision.

4.3.5 Candidatesshouldknow,understandandbeabletoapplyinrelationtooccupationalpensionschemes:

constraintsoncontribution theoptionsavailabletoearlyleavers theoptionsonretirement(normal,earlyandlate) thebenefitlimitsonretirement(normal,earlyandlate) thebenefitlimitsondeathinservice

4.3.6 Candidatesshouldhaveaworkingknowledgeofandbegenerallyabletoapply: the method of transfer and restrictions on transfers between occupational schemes,personalpensionsandretirementannuities

theprinciplesoftransfervalueanalysis regulatory requirements concerningassumptions, transfers,optoutsandnonjoiners fromoccupationalschemes

theimplicationsofthePensionAct1995 theimplicationsforpensionprovisionofdivorce thebenefit limitsandoperationofpublicor formerpublicsectorSuperannuationSchemes(e.g.,CivilService)

theimplicationsforpensionprovisionofbusinessinsolvency,saleoracquisition

4.3.7 Candidatesshouldknow,understandandbeable toapply theeligibility,benefits, funding,contributions,andinvestmentrulesrelatingto:

executivepensionplans smallselfadministeredschemes contractedout/inmoneypurchaseschemes contractedout/infinalsalaryschemes Hybridschemes(moneypurchaseorfinalsalaryunderpin)


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Mainschemeandfreestandingadditionalvoluntarycontributions fundedandunfundedunapprovedretirementbenefitschemes personalpensionandretirementannuity selfinvestedpersonalpension incomedrawdownandphasedretirement

4.3.8 Candidatesshouldknow,understandandbeabletoapplytheuseofproductsandthelegalandtaxationframeworktomeetaclientsretirementplanningrequirements.

4.4FinancialPlanningfortheBusinessOwner

4.4.1 Candidates should know, understand and be able to apply the legal framework forbusinesses:

soletrader partnership limitedpartnership cooperative unincorporatedassociation companies(privatelimited,limitedbyguaranteeandpubliclimited) theroleofthememorandumandarticlesorpartnershipdeed therightsanddutiesofdirectors/partnersandshareholders theaccountingrequirementsofsoletraders,partnershipsandlimitedcompanies theformationrequirementsofeachtypeofbusinessentity

4.4.2 Candidates should know, understand and be able to apply the taxationframework forbusinesses:

NationalInsurance VAT IncomeTax CorporationTax CapitalGainsTax

4.4.3Candidates

should

knowandunderstandthe legalandfinancial implicationsofbankruptcy

andinsolvency.

4.4.4 Candidatesshouldbeabletointerpretbusinessaccountsincluding:

balancesheet profitandlossaccount cashflowforecast operatingbudget


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4.4.5 Candidatesshouldknow,understandandbeabletoapply: theprincipalmethodsofraisingfinance thelegal,taxationandfinancingissuesrelatingtoabusinesssaleorpurchase

4.4.6 Candidatesshouldknow,understandandbeabletoapplythekey legal/taxationprinciplesandproductstobusinessriskprotectionincluding:

keypersoninsurance shareprotectioninsurance loanprotection partnershipprotection useoftrusts taxation theneedforcommercialinsurance

4.4.7 Candidatesshouldknow,understandandbeabletoapplythekeylegal/taxationprinciplesandproductstobusinesssuccessionplanning.

4.4.8 Candidates should be generally aware of the legal and taxation implications of employingpeopleincluding:

employeerights antidiscriminationlegislation employerduties

4.4.9 Candidatesshouldknow,understandandbeabletoapplytokeytaxation/legalprinciplesandproductstoemployeebenefitsandremunerationplanningincluding:

remunerationplanning pensionschemedesign benefitsinkind medical/dentalplans maternity/paternityschemes shareoptionandprofitrelatedpayschemes cafeteriabenefitplans

cfp syllabus 2010

Documents