CFP Exam Information and Guideline
Certified Financial Planner (CFP Level 1)
Below are complete topics detail with latest syllabus and course outline, that will help you good knowledge about exam objectives and topics that you have to prepare. These contents are covered in questions and answers pool of exam.
The CFP® certification examination is a key requirement for achieving CFP® certification. By passing the exam, you demonstrate that you've attained the knowledge and competency necessary to provide comprehensive personal financial planning advice to your clients. CFP Board is here to guide you with the support, tools and resources you need for a successful exam experience.
To develop CFP® exam content that reflects the current practice of financial planning, CFP Board conducts regular Job Analyses to identify the important tasks performed by planners and assess the knowledge and skills needed to perform these tasks. This process is conducted by CFP® professionals and led by testing experts to assure the exam remains current, reliable, valid and legally defensible.
CFP Board works with volunteer CFP® professionals to develop the exam. These volunteers include Subject Matter Experts (SMEs) who serve as item writers and reviewers, as well as members of the Council on Examinations, which is made up of SMEs with considerable experience with the CFP® exam who provide final review and approval of all exam questions.
The criterion for passing the CFP® exam is established through a process known as Standard Setting, during which CFP® professionals determine the minimal competency level required to pass the exam. CFP Board does not predetermine the pass rate for the exam or have an established percentage of questions that must be answered correctly to pass.
The following Principal Topics are based on the results of CFP Boards 2015 Job Task Analysis. The Principal
Topics serve as a curricular framework and also represent subject topics that CFP Board accepts for continuing
education credit, effective January 2016. Each exam question will be linked to one of the following topics, in the
approximate percentages indicated following the general headings.
8 PRINCIPAL KNOWLEDGE TOPIC CATEGORIES:
A. Professional Conduct and Regulation (7%)
B. General Principles of Financial Planning (17%)
C. Education Planning (6%)
D. Risk Management and Insurance Planning (12%)
E. Investment Planning (17%)
F. Tax Planning (12%)
G. Retirement Savings and Income Planning (17%)
H. Estate Planning (12%)
A. PROFESSIONAL CONDUCT
AND REGULATION (7%)
A.1 CFP Boards Code of Ethics and Professional
Responsibility and Rules of Conduct
A.2 CFP Boards Financial Planning Practice Standards
A.3 CFP Boards Disciplinary Rules and Procedures
A.4 Function, purpose, and regulation of financial
institutions
A.5 Financial services regulations and requirements
A.6 Consumer protection laws
A.7 Fiduciary
B. GENERAL PRINCIPLES OF
FINANCIAL PLANNING (17%)
B.8 Financial planning process
B.9 Financial statements
B.10 Cash flow management
B.11 Financing strategies
B.12 Economic concepts
B.13 Time value of money concepts and calculations
B.14 Client and planner attitudes, values, biases and
behavioral finance
B.15 Principles of communication and counseling
B.16 Debt management
C. EDUCATION PLANNING (6%)
C.17 Education needs analysis
C.18 Education savings vehicles
C.19 Financial aid
C.20 Gift/income tax strategies
C.21 Education financing
D. RISK MANAGEMENT AND
INSURANCE PLANNING (12%)
D.22 Principles of risk and insurance
D.23 Analysis and evaluation of risk exposures
D.24 Health insurance and health care cost management (individual)
D.25 Disability income insurance (individual)
D.26 Long-term care insurance (individual)
D.27 Annuities
D.28 Life insurance (individual)
D.29 Business uses of insurance
D.30 Insurance needs analysis
D.31 Insurance policy and company selection
D.32 Property and casualty insurance
E. INVESTMENT PLANNING (17%)
E.33 Characteristics, uses and taxation of investment vehicles
E.34 Types of investment risk
E.35 Quantitative investment concepts
E.36 Measures of investment returns
E.37 Asset allocation and portfolio diversification
E.38 Bond and stock valuation concepts
E.39 Portfolio development and analysis
E.40 Investment strategies
E.41 Alternative investments
F. TAX PLANNING (12%)
F.42 Fundamental tax law
F.43 Income tax fundamentals and calculations
F.44 Characteristics and income taxation of business entities
F.45 Income taxation of trusts and estates
F.46 Alternative minimum tax (AMT)
F.47 Tax reduction/management techniques
F.48 Tax consequences of property transactions
F.49 Passive activity and at-risk rules
F.50 Tax implications of special circumstances
F.51 Charitable/philanthropic contributions and deductions
G. RETIREMENT SAVINGS AND
INCOME PLANNING (17%)
G.52 Retirement needs analysis
G.53 Social Security and Medicare
G.54 Medicaid
G.55 Types of retirement plans
G.56 Qualified plan rules and options
G.57 Other tax-advantaged retirement plans
G.58 Regulatory considerations
G.59 Key factors affecting plan selection for businesses
G.60 Distribution rules and taxation
G.61 Retirement income and distribution strategies
G.62 Business succession planning
H. ESTATE PLANNING (12%)
H.63 Characteristics and consequences of property titling
H.64 Strategies to transfer property
H.65 Estate planning documents
H.66 Gift and estate tax compliance and tax calculation
H.67 Sources for estate liquidity
H.68 Types, features, and taxation of trusts
H.69 Marital deduction
H.70 Intra-family and other business transfer techniques
H.71 Postmortem estate planning techniques
H.72 Estate planning for non-traditional relationships
1. ESTABLISHING AND DEFINING THE
CLIENT-PLANNER RELATIONSHIP
A. Identify the client (e.g., individual, family, business, organization)
B. Discuss the financial planning process
C. Explain scope of services offered
D. Assess and communicate ability to meet the clients needs and expectations
E. Identify and disclose conflicts of interest in client relationships
F. Discuss responsibilities of parties involved
G. Define and document the scope of the engagement
H. Provide client disclosures
1. Regulatory disclosure
2. Compensation arrangements and associated potential conflicts of interest
2. GATHERING INFORMATION NECESSARY
TO FULFILL THE ENGAGEMENT
A. Explore with the client their personal and financial needs, priorities and goals
B. Assess the clients level of knowledge, experience and risk tolerance
C. Evaluate the clients risk exposures (e.g., longevity, economic, liability, healthcare)
D. Gather relevant data including:
1. Summary of assets (e.g., cost basis information, beneficiary designations and titling)
2. Summary of liabilities (e.g., balances, terms, interest rates)
3. Summary of income and expenses
4. Estate planning documents
5. Education plan and resources
6. Retirement plan information
7. Employee benefits
8. Government benefits (e.g., Social Security, Medicare)
9. Special circumstances (e.g., legal documents and agreements, family situations)
10. Tax documents
11. Investment statements
12. Insurance policies and documents (e.g., life, health, disability, liability)
13. Closely held business documents (e.g., shareholder agreements)
14. Inheritances, windfalls, and other large lump sums
3. ANALYZING AND EVALUATING THE
CLIENTS CURRENT FINANCIAL STATUS
A. Evaluate and document the strengths and vulnerabilities of the clients current financial situation including:
1. Statement of financial position/balance sheet
2. Cash flow statement
3. Capital needs analysis (e.g., insurance, retirement, major purchases
4. Asset protection (e.g., titling, trusts, etc.)
5. Asset allocation
6. Client liquidity (e.g., emergency fund)
7. Government benefits (e.g., Social Security, Medicare)
8. Employee benefits
9. Investment strategies
10. Current, deferred and future tax liabilities
11. Estate tax liabilities
12. Tax considerations
13. Income types
14. Retirement plans and strategies (e.g., qualified plans, IRAs)
15. Accumulation planning
16. Distribution planning
17. Estate documents
18. Ownership of assets
19. Beneficiary designations
20. Gifting strategies
21. Executive compensation (e.g., deferred compensation, stock options, RSUs)
22. Succession planning and exit strategy
23. Risk management (e.g., retained risk and insurance coverage)
24. Educational financial aid
25. General sources of financing
26. Special circumstances (e.g., divorce, disabilities, family dynamics, etc.)
27. Inheritances, windfalls, and other large lump sums
28. Charitable planning
29. Aging and eldercare
30. Mental capability and capacity issues
B. Identify and use appropriate tools and techniques to conduct analyses including:
1. Financial calculator
2. Computer spreadsheet
3 Financial planning software
4. DEVELOPING THE RECOMMENDATION(S)
A. Evaluate alternatives to meet the clients goals and objectives
1. Sensitivity analysis (e.g., factors outside of client control)
B. Consult with other professionals as appropriate
C. Develop recommendations considering:
1. Client attitudes, values and beliefs
2. Behavioral finance issues (e.g., anchoring, overconfidence, recency)
3. Their interdependence
D. Document recommendations
5. COMMUNICATING THE RECOMMENDATION(S)
A. Present financial plan and provide guidance
1. Goals
2. Assumptions
3. Observations and findings
4. Alternatives
5. Recommendations
B. Obtain feedback from the client and revise the recommendations as appropriate
C. Provide documentation of plan recommendations and any additional disclosures
D. Verify client acceptance of recommendations
6. IMPLEMENTING THE RECOMMENDATION(S)
A. Create a prioritized implementation plan with timeline
B. Directly or indirectly implement the recommendations
C. Coordinate and share information, as authorized, with others
D. Define monitoring responsibilities with the client (e.g., explain what will be monitored, frequency of monitoring, communication method(s))
7. MONITORING THE RECOMMENDATION(S)
A. Discuss and evaluate changes in the clients personal circumstances (e.g., aging issues, change in employment)
B. Review the performance and progress of the plan
C. Review and evaluate changes in the legal, tax and economic environments
D. Make recommendations to accommodate changed circumstances
E. Review scope of work and redefine engagement as appropriate
F. Provide ongoing client support (e.g., guidance, education)
8. PRACTICING WITHIN PROFESSIONAL AND REGULATORY STANDARDS
A. Adhere to CFP Boards Standards of Professional Conduct
B. Manage practice risk (e.g., documentation, monitor client noncompliance with recommendations)
C. Maintain awareness of and comply with regulatory and legal guidelines