CFP EXAM SYLLABUS
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5 | Appendix
Financial Planning Process and Job Knowledge
Requirements: Topics and Level of Competence
SECTION B.
JOB KNOWLEDGE REQUIREMENTS (Sections 7 - 103)
B.1. GENERAL PRINCIPLES (Sections 7 - 14)
| 7. Regulatory
requirements |
| |
Level |
| A. |
Financial products
|
2.0 |
| B. |
Financial advisor
|
2.0 |
| |
|
|
| 8. CFP Ethical
and professional considerations in financial planning
|
| |
Level |
| A. |
Financial Planners
Standards Council - Code of Ethics |
3.0 |
| B. |
Representation
of related clients |
3.0 |
| C. |
Issues related
to holding oneself out as a CFP (e.g. Professional liability/fiduciary
responsibility) |
2.0 |
| 9. Economic
environment and indicators |
| |
Level |
| A. |
Inflation/deflation
|
2.0 |
| B. |
Interest rates/yield
curves |
2.0 |
| C. |
Monetary and fiscal
policy |
2.0 |
| D. |
The business cycle
|
2.0 |
| E. |
Leading, lagging,
coincident indicators |
2.0
|
| 10. Financial
institutions |
| |
Level |
| A. |
Characteristics
|
2.0 |
| B. |
Safety and regulation
1. CDIC
2. CUDIC
3. Assuris (formerly CompCorp)
4. CIPF |
2.0
2.0
2.0
2.0
2.0 |
| 11. Analysis
of financial information (refer to Appendix A for formulae
reproduced on the CFP Exam) |
| |
Level |
| A. |
Types and measures
of investment returns
1. Future value
2. Present value
3. Net present value
4. Internal rate of return (IRR)
5. Compounding periods
6. Interest rate
7. Simple annuities (ordinary and annuity due)
8. Simple interest calculation
9. Annualized return
10. Real rate of return
11. After-tax return
12. Convert nominal rate to effective rate
13. Convert effective rate to nominal rate
14. Current yield - stocks and bonds
15. Yield to maturity
16. Market value of a bond
17. Market value of a strip bond
18. Time-weighted return
19. Risk-free return
20. Standard deviation
21. Holding period return
22. Total return
|
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
2.0
2.0
2.0
2.0
3.0 |
| B. |
Financial Statement
ratio analysis
1. Current ratio
2. Quick ratio
3. Debt-to-equity ratio
4. Debt-to-total assets ratio
5. Interest coverage ("times interest earned")
6. Net profit margin
7. Gross profit margin
8. Return on common equity
9. Return on total assets
10. Earnings per common share
11. Price/Earnings ratio (P/E multiple)
12. Asset turnover
13. Inventory turnover
14. Receivable turnover
15. Working capital
16. Dividend payout
17. Market capitalization |
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0 |
| 12. General
knowledge of legal issues |
| |
Level |
| A. |
Contracts |
2.0 |
| B. |
Negotiable instruments
|
2.0 |
| C. |
Torts |
2.0 |
| D. |
Professional liability
|
2.0 |
| E. |
Fiduciary responsibility
|
2.0 |
| F. |
Agency law |
2.0 |
| G. |
Ways of taking
title to property (sole, joint tenancy, tenants in common)
1. Characteristics
2. Implications |
3.0
2.0
2.0 |
| 13. Budgeting
and cash management |
| |
Level |
| A. |
Budgeting |
3.0 |
| B. |
Cash management
|
3.0 |
| C. |
Emergency fund
planning |
3.0 |
| 14. Debt management |
| |
Level |
| A. |
General lending
criteria (collateral, capacity, character, credit history)
|
2.0 |
| B. |
Consumer credit
|
2.0 |
| C. |
Mortgages |
2.0 |
| D. |
Buy vs. lease |
2.0 |
| E. |
Refinancing |
2.0 |
| F. |
Debt consolidation
|
2.0 |
| G. |
Process of insolvency
and bankruptcy |
2.0 |
SECTION B.2. RISK MANAGEMENT (Sections 15 - 33)
SECTION B.2.a. GENERAL (Sections 15 - 17)
| 15. Principles
of risk management |
| |
Level |
| A. |
Overall definition
and process |
3.0 |
| B. |
Concept of insurable
risk |
2.0 |
| C. |
Elements of insurance
|
2.0 |
| D. |
Methods to avoid,
reduce and eliminate loss |
2.0 |
| 16. Legal aspects
of insurance contracts |
| |
Level |
| A. |
Law of agency |
2.0 |
| B. |
Tort liability
|
2.0 |
| C. |
Types of legal
liability |
2.0 |
| D. |
Preventive measures
to reduce liability |
2.0 |
| E. |
Defenses against
legal liability |
2.0 |
| F. |
|
|
| G. |
|
|
| 17. Law and
the insurance contract |
| |
Level |
| A. |
Principles of contract
law as applied to insurance |
2.0 |
| B. |
Basic components
of an insurance contract |
2.0 |
| C. |
Special legal characteristics
of insurance contracts (e.g. indemnity, adhesion, unilateral)
|
2.0 |
| D. |
Provincial regulations
|
2.0 |
| E. |
Federal regulations
|
2.0 |
SECTION B.2.b.
LIFE INSURANCE (Sections 18 - 22)
| 18. Needs analysis |
| |
Level |
| A. |
Exposure |
3.0 |
| B. |
Objectives |
3.0 |
| C. |
Data collection
|
3.0 |
| D. |
Strategies |
3.0 |
| E. |
Implementation
|
3.0 |
| 19. Types of
plans |
| |
Level |
| A. |
Term |
2.0 |
| B. |
Whole life |
2.0 |
| C. |
Universal |
2.0 |
| D. |
Joint life |
2.0 |
| E. |
Group life |
2.0 |
| 20. Features
of plans |
| |
Level |
i.
ii. |
Life insurance
policy provisions
A. Incontestable clause
B. Grace period
C. Reinstatement
D. Suicide clause
E. Ownership
F. Loan provisions
G. Non-forfeiture options
H. Settlement options
I. Dividends / interest
J. Renewability and conversion provisions
K. Beneficiary designations
L. Misstatement of age
Life insurance policy riders
M. Waiver of premium
N. Guaranteed insurability
O. Accidental death
P. Cost-of-living adjustments
Q. Family riders and other insured
R. Level term
S. Spousal term
T. Child term |
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
2.0
1.0
2.0
2.0
2.0 |
| 21. Taxation
of plans |
| |
Level |
| A. |
The Income Tax
Act definition of life insurance |
1.0 |
| B. |
Tax implications
of owning individual life insurance |
2.0 |
| C. |
Tax implications
of disposing of life insurance policies |
2.0 |
| 22. Applications |
| |
Level |
| A. |
Selecting life
companies |
2.0 |
| B. |
Key person |
2.0 |
| C. |
Using life insurance
to fund buy/sell agreements |
2.0 |
| D. |
Estate preservation
|
2.0 |
| E. |
Income replacement
|
2.0 |
| F. |
Life insurance
policy selection (term vs. permanent) |
2.0 |
| G. |
Considerations
with regard to life insurance policy replacement |
2.0 |
SECTION B.2.c.
DISABILITY INSURANCE (Sections 23 - 27)
| 23. Needs analysis |
| |
Level |
| A. |
Exposure |
3.0 |
| B. |
Objectives |
3.0 |
| C. |
Data collection
|
3.0 |
| D. |
Strategies |
3.0 |
| E. |
Implementation
|
3.0 |
| 24. Types of
Plans |
| |
Level |
| A. |
Personally owned
|
2.0 |
| B. |
Group disability
|
2.0 |
| C. |
Workers' compensation
|
2.0 |
| D. |
Canada Pension
Plan |
2.0 |
| E. |
Business overhead
|
2.0 |
| F. |
Employment Insurance
|
2.0 |
| 25. Features
of plans |
| |
Level |
| A. |
Definition of disability
|
2.0 |
| B. |
Occupation class
|
2.0 |
| C. |
Elimination period
|
2.0 |
| D. |
Benefit period
|
2.0 |
| E. |
Benefit amount
|
2.0 |
| F. |
Options and riders
|
2.0 |
| 26. Taxation
of plans |
| |
Level |
| A. |
Taxation of government
benefits |
2.0 |
| B. |
Taxation of employer-paid
plans |
2.0 |
| C. |
Taxation of personally-owned
plans |
2.0 |
| 27. Applications |
| |
Level |
| A. |
Choosing a disability
insurance company |
2.0 |
| B. |
Income replacement
|
2.0 |
| C. |
Business overhead
|
2.0 |
| D. |
Using disability
insurance to fund buy/sell agreements |
2.0 |
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