Financial Planning Process
and Job Knowledge Requirements:
Topics and Level of Competence
The following topics are effective for the CFP
Examination administered by Financial Planners Standards Council
effective June 2001. The CFP Exam is administered nationally;
accordingly, examination questions will be based on content
applicable across Canada. At the same time there are a number
of knowledge areas which both have unique provincial characteristics,
such as Family Law, and which are considered to be knowledge
areas in which a Certified Financial Planner must
perform competently. Questions may be asked with respect to
such provincially-based areas. These questions will be formulated
on the basis of general principles applicable across the country,
and will not require that knowledge unique to a specific province
be demonstrated.
To see all the requirements of CFP certification, visit Path to CFP.
LEVELS OF COMPETENCE
Candidates are expected to have a more extensive
knowledge of some topics than of others. One of three "levels
of competence" is specified for each topic. These competence
levels provide guidance on the depth of knowledge that candidates
are expected to possess. Effective June 2001 the levels of
competence which candidates for the CFP Exam will be required
to demonstrate are defined as follows.
Level 3 - Mastery
Candidates are required to:
attain an in-depth understanding of concepts
and principles
develop a sound conceptual and comprehensive
technical knowledge of procedures
become proficient in the application of knowledge
to practice
become proficient users of reference documents
and sources for further study
On examinations, candidates should be prepared
to demonstrate mastery of both the conceptual and technical
aspects of a topic, including specific detail. Skills developed
and examined at this level are comprehension, application,
analysis, synthesis, and evaluation.
Level 2 - Comprehension
Candidates are required to:
attain an understanding of concepts, principles
and procedures
develop a working knowledge of procedures
identify common reference documents and sources
for further study
On examinations, candidates should be prepared
to demonstrate understanding of the conceptual aspects of
a topic, and to apply technical skills. Skills developed and
examined at this level are comprehension and application.
Level 1 - Background Knowledge
Candidates are required to:
identify common reference documents and sources
acquire a general knowledge of broad topic areas
On examinations, candidates should be prepared
to demonstrate their general knowledge of a topic. They will
not be required to answer in-depth questions. Skills developed
and examined at this level are recall and general knowledge.
ANALYSIS OF FINANCIAL INFORMATION (SYLLABUS
SECTION 11)
A financial planner has a wide variety of techniques
and formulae available to analyze financial information on
behalf of the client. The methods of financial analysis that the candidate is responsible for on the CFP Examination are set out in Section 11. Refer to Appendix
A for the formulae that will be published with the CFP Examination
and Sample Examination.
Financial calculators may be used in applying
any of the examinable formulae found in Appendix A. Candidates
may not use calculators that have the capacity to store text.
SECTION A.
FINANCIAL PLANNING PROCESS (Sections 1 - 6)
1.
Establishing client-planner engagement
Level
A
Explain
issues and concepts related to overall financial planning
process, as appropriate
3.0
B
Explain
services provided, the process of planning, documentation
3.0
C
Clarify
client's responsibilities
3.0
D
Clarify
CFP professional responsibilities
1. Disclosure (compensation and conflict of interest)
3.0
E
Engagement
letter - uses and requirements
3.0
2.
Gathering client data and determining goals and expectations
Level
A
Obtain information
through interview/questionnaire about financial resources
and obligations
3.0
B
Determine client's
personal and financial goals, needs and priorities
3.0
C
Determine client's
values, attitudes and expectations
3.0
3.
Clarifying the client's present financial status and identifying
problem areas and opportunities
Level
A
Current financial
status (e.g. cash flow, net worth, tax projections)
Develop and prepare
a client-specific financial plan to meet client goals
and objectives, commensurate with client's values, temperament,
and risk tolerance.
Provide projections and recommendations.
3.0
B
Present
and review the plan with the client
3.0
C
Collaborate with
client to ensure plan meets goals and objectives, revise
as appropriate
3.0
5.
Implementing the financial plan
Level
A
Assist
the client in implementing the recommendations
3.0
B
Coordinate
as necessary with other professionals, such as accountants,
lawyers, real estate agents, investment advisors, investment
fund sales representatives, and insurance agents/brokers
3.0
6.
Monitoring the financial plan
Level
A
Monitor
and evaluate soundness of recommendations
3.0
B
Review
the progress of the plan with the client
3.0
C
Discuss
and evaluate changes in client's personal circumstances,
(e.g. birth/death, age, illness, divorce, retirement)
3.0
D
Review
and evaluate changing tax laws and economic circumstances
3.0
E
Make
recommendations to accommodate new or changing circumstances
CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.
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