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NATIONAL INSTITUTE OF SECURITIES MARKETS

Established by the Securities and Exchange Board of India

Certified Personal Financial Advisor (CPFA) Examination


Curriculum

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Concept of Financial Planning


Need for financial advisory services
Scope of financial advisory services
Financial planning delivery process
Process of determining clients situation and goals
Importance of assessing clients investment risk profile
Importance of assessing client needs
Parameters for recommending investment strategy
Process to implement the advice with right products
Importance of monitoring & reviewing periodically

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C.

Managing Investment Risk


Types of risks
Market Risk (Systematic and Unsystematic)
Reinvestment risk
Interest rate risk
Purchasing power risk
Liquidity risk
Policy related risk
Exchange rate risk
Inflation risk
Tax Rate risk
Alpha
Measurement of risk
Standard deviation
Beta including portfolio beta
Variance, semi-variance and covariance
Coefficient of variation and correlation
Probability
Mean
Median
Mode
Risk management

III.
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B.

Measuring Investment Returns


Risk, return and investor outlook
Risk appetite and optimal portfolio allocation

B.

Certified Personal Financial Advisor (CPFA) Examination

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NATIONAL INSTITUTE OF SECURITIES MARKETS


Established by the Securities and Exchange Board of India
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Time value of money


Annuities and its types
Equated Monthly Installments (EMI)
Compounding
Net Present Value (NPV)
Inflation and tax adjusted interest rates
Holding period return
Compound Annual Growth Rate (CAGR) & Internal Rate of Return (IRR)
Time weighted return Vs. money weighted return
Real (inflation adjusted) rate of return vs. nominal return
Benchmarking and peer performance evaluation
Calculation of total returns
Calculation of risk-adjusted returns
Calculation of Sharpe ratio and applicability
Calculation of Treynor ratio and applicability
Calculation of Jensens Alpha and applicability
Types of capital gains and taxation based on fund type

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Investment Strategies
Active and passive strategies
Types of asset allocation
Strategic asset allocation
Tactical asset allocation
Fixed and flexible allocation
Rebalancing strategies
Formulae based monitoring and revision of portfolios

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Insurance Planning
Objective of risk management
Law of large numbers
Personal risk management, risk control and risk financing
Insurance of assets
Insurance of liabilities
Term insurance
Health insurance
Life insurance needs analysis
Human life approach
Needs approach
Multiple approach
Capital needs analysis approach
Types of life and health insurance products and their

I.

Certified Personal Financial Advisor (CPFA) Examination

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NATIONAL INSTITUTE OF SECURITIES MARKETS


Established by the Securities and Exchange Board of India
VI.
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B.
C.
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Retirement Planning
Retirement planning process
Types of annuities, pension plans, NPS
Shifts in asset allocation before and during retirement as part of overall retirement plan
Reverse mortgage and features of available products

VII.
A.

Tax and Estate Planning


Heads of Income
Gross total income
Adjusted gross income
Itemized deductions
Taxable income
Tax liability
Clubbing of income
Taxation for NRIs
Capital gains tax rules
Characterization of gain or loss
Netting rules
Indexation benefits
Capital loss limitations
Tax planning strategies
Wealth Tax Act and its implication for clients
Estate Planning
Valuing of an estate
Hindu and Indian Succession Act and related process

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Investment Vehicles
Small Savings Instruments
Public Provident Fund
National Saving Certificate
Kisan Vikas Patra
Post Office Monthly Income Scheme
Post office Term Deposit
Post Office Saving Accounts
Senior Citizen Saving Scheme
Government securities
Corporate deposits
Bank deposits
Mutual fund products
Equity growth funds
Income funds
Balanced funds
Liquid funds

Certified Personal Financial Advisor (CPFA) Examination

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NATIONAL INSTITUTE OF SECURITIES MARKETS


Established by the Securities and Exchange Board of India

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P.
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Index funds
ETFs
Thematic & sectoral funds
Fixed Maturity Plans
Arbitrage funds
Overseas opportunities
Short-term funds
Types and features of Equity shares
Modes of valuation
Portfolio management aspects
Value growth investing
Derivatives and commodities
Real estate
Other investments
ULIPs
Bullion
Collectibles
Precious metals
Venture Capital
Private Equity
Structured Product
Participatory Notes
Regulatory Environment and Ethical Issues
Need for regulation and investor protection
Framework of the regulatory system
Government Regulation
Self Regulation
Interface with the Judicial System
Role of Ministry of Finance (MOF)
Role of Ministry of Company Affairs (MCA)
Roles of Regulators: SEBI, RBI, IRDA, PFRDA
Securities and Exchange Board of India Act
Insurance Regulatory and Development Authority Act
Securities Contracts (Regulation) Act and Securities Contracts (Regulation) Rules
Companies Act
Contract Act
Prevention of Money Laundering Act (PMLA)
Foreign Exchange Management Act (FEMA)
Ethical issues in providing financial advice
Codes of conduct by SEBI, IRDA, professional bodies
Investor complaint redressal mechanism

Certified Personal Financial Advisor (CPFA) Examination

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