Friday, 1 June 2012
Thursday, 31 May 2012
Certified Financial Planner (CFP)
Find out how a CFP charter can empower you
Why do you need to have this certificate?
The most important and primary reason for anyone to do a CFP certification is for better career options and more employment options. A CFP degree communicates your expertise in the financial planning stream instantly. The certification has got a global recognition.
Which institute/body conducts the test?
Financial Planning Standards Board India (FPSB) is a Public - Private Enterprise and a Professional Standards Setting body. FPSB India is the principal licensing body that awards CFP Certification in India. FPSB Limited, US has entered into licensing and affiliation agreements with 23 nations. India is one of them.
How can you register for this test?
You will have to register through the FPSB website for the course. You also need to register on the NSE website and obtain a NCFM number which would have to be put on the registration form at FPSB. You need to pay the fee and submit the following documents
Signed student Registration Form
DD if opted
Qualification Documents (Minimum Qualification Certificate as required)
Photograph
Marriage Certificate or Pan Card Copy/Passport Copy in case of change of name after marriage
FPSB verifies the documents and activates the account.
What is the test pattern?
A candidate can take the examination for Exam 1-4 in any sequence but Exam 5 can only be attempted once the candidate has successfully cleared the Exams 1-4.
The first examination attempt can be taken only after expiry of mandatory 60 days lock in period that starts from the date of registration of the candidate with the FPSB, India.
The first examination attempt can be taken only after expiry of mandatory 60 days lock in period that starts from the date of registration of the candidate with the FPSB, India.
What is the study material all about?
The study material covers topics like Risk Analysis & Insurance Planning, Retirement Planning & Employees Benefits, Investment Planning, and Tax Planning & Estate Planning. These topics are tested through four different exam modules. At every module there are 20 percent questions based on introduction to Financial Planning. The fifth exam tests you on advanced financial planning.
What should you look out for?
You should look out for exam 5. This tests you on case studies depicting real life scenario of individual Financial Planning situations. FPSB India uploads on their website probable case studies, out of which any two are asked in the examination. The exam tests a person on the basis of his ability to analyze client specific situations.
How is the test pattern?
The test pattern for exams 1-4:
You will have to answer a multiple choice objective type examination which is administered on-line by NSE. All questions have a question body with 4 alternative options. You need to select one. There is no negative marking.
The test pattern for exams 5:
There will be two case studies in test 5. Questions will be asked on the cases. Each question will carry pre-specified marks for each correct answer.
What do you need to do to clear the test?
You need approximately 2-3 months for clearing one exam. In all you would need about fifteen to eighteen months to become a CFP.
Where are the tests conducted?
These tests are conducted daily at 30 NSE centers from Monday to Saturday.
Some key facts about the Exam
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No of questions
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75 questions of 1, 2 and 4 marks for tests 1-4 and 15 questions of 2,3,4 and 5 marks in test 5
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Maximum Marks
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140 for 1-4 and 50 for 5
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Duration
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120 minutes for tests 1-4 and 240 minutes for test 5
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Certificate Validity
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1 year. The certificate needs to be renewed every year.
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Passing Score
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60% or greater for test 1-4 and 50% or greater for test 5.
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Test Fees
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Rs 2000/- for tests 1-4 and Rs 5000/- for test 5.
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Website URL
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http://www.fpsb.co.in
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Difficulty Level
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Requires some hard work and application
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Certified Financial Analyst (CFA)
Find out about the much coveted CFA charter
What can this charter achieve for you?
CFA charter is recognized globally.
Many multinational banks, funds and institutions prefer CFAs for investment and research functions.
It is known for being a rigorous and extensive course.
Which institute/body conducts the test?
The CFA institute conducts the test. The institute is a global, not for profit organization. It’s an association of investment professionals from around the world. The CFA institute was earlier known as AIMR.
How can you register for this test?
You can register for the test through the CFA website. You need to be a graduate to be able to register. No other physical document is required. You can appear for Level-I exam in December and June. You can however take the Level-II and -III exam in June only.
What is the study material all about?
CFA has three levels. Level-I focus on basics of financial products, ethics, and quantitative mathematics. Level-II is all about application of quantitative mathematics, valuation of financial products. Level-III focuses on portfolio management and behavioral finance.
What should you look out for?
The institute recommends at least 300 hours of study for every level. It is very important to clear the ethics subject as the institute values it highly. There is no fixed passing percentage. Cut off is decided by the institute every year. You need to pass all three levels and have relevant experience of a minimum four years to earn the charter of a Chartered Financial Analyst.
What is the test pattern?
Level-I consists of two sets of 120 multiple choice questions to be answered in 3 hours each. Both the sets have to be taken on the same day.
Level-II comprises two sets. Each set has ten case studies with six multiple choice questions each.
Level-III too has two sets. First set consists of ten case studies with six multiple choice questions each. Second set is an essay type questions.
What do you need to do to clear the test?
You need to put in 2-3 months to be able to clear level-I. Level-II is tougher and requires about six months of preparation. Level-III too needs about six to seven months of preparation.
Where are the tests conducted?
In India, they are conducted in four cities: Mumbai, Delhi, Chennai and Kolkata. These centers are not fixed and change from year to year.
Some key facts about the Exam
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No of questions
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Level-I: 240
Level-II: 20 case studies
Level-III: 10 case studies and essay questions
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Maximum Marks
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360 points
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Duration
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Six hours for all levels
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Certificate Validity
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There is no expiry
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Passing Score
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There is percentile system
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Test Fees
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Level-I: $ 1,035
Level-II: $ 630
Level-III: $630
You get a discount if you pay the fees earlier
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Website URL
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https://www.cfainstitute.org
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Difficulty Level
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Tough
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NISM: Mutual Fund Distributors Certification Examination
Find out about the one certification you cannot do without if you want to sell mutual funds in India
Why do you need to have this certificate?
You require this certificate to be able to sell and distribute mutual funds in India.
Which institute/body conducts the test?
The mutual fund test is conducted by National Institute of Securities Markets (NISM). NISM has been established by SEBI.
How can you register for this test?
You can register for this test through NSE, BSE or MCX-SX. Their websites require you to create an account for registration. You would have to upload your photograph to register.
What is the study material all about?
The study material basically seeks to create a common minimum knowledge about mutual funds. The institute sends you a 365 page book once you register for the test. Soft copy of the book can be downloaded from the institute’s website. The language of the book is simple and easy to understand.
The website URL is www.nism.ac.in
What should you look out for?
There is negative marking in the exam. For every wrong answer your score will be deducted by 0.25 marks.
Passing Certificate is issued only to those who have furnished/updated their Income Tax Permanent Account Number (PAN) in their registration details.
What do you need to do to clear the test?
Read through the NISM book thoroughly a few times depending on your knowledge about mutual funds. Most people familiar with mutual funds or those with a commerce/finance background would need a week’s preparation at the maximum to clear the test.
How would you benefit if you have this certificate?
You can sell and distribute mutual funds only if you have this certificate. This certificate ensures that you have adequate knowledge about the product when dealing with clients.
Where are the tests conducted?
The tests are conducted by NSE, BSE or MCX-SX for NISM. NSE conducts these at six locations on a regular basis. These locations are Mumbai, Delhi, Kolkata, Chennai, Hyderabad and Ahmedabad. It can conduct tests at other locations if there is enough demand. In Mumbai the test is conducted at Fort.
Some key facts about the Exam
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No of questions
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100
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Maximum Marks
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100
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Duration
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120 minutes
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Certificate Validity
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3 years
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Passing Score
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50% or greater
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Test Fees
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Rs 1000/-
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Website URL
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www.nism.ac.in
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Difficulty Level
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Easy to clear with some preparation
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Top Performers
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Monday, 21 May 2012
Financial Planning Lessons from Cricket World Cup Final
Cricket mania is at its best…. Cricket has over shadowed everything…. Other sports, movies, & issues like corruption. No one was bothered about the state elections or finding whereabouts of Shah Rukh Khan. All were glued to the idiot box with a bucket of popcorns. So I will also not break the continuity and will not bore you with a heavy topic, instead would try to connect cricket with the financial world.
Short Term Performance: Zaheer Khan gave too many runs in last overs & Sehwag got out for a duck, but that doesn’t mean they are not good players. So, we can’t judge them by single match performance. Similarly you should not judge investments on their short term performance. Give them a suitable time and their justified cycle.
Inspiration: This cup was for Sachin. Thousands of eyes got wet (including mine) when Virat said “he has carried Indian cricket for 23 years, and now it was their turn”. Sachin was not able to contribute much in the final but he was the backbone. In life also and particularly in Financial life we all should have inspirations. Our financial decisions will make or mar the lives of our dependent, so next time if you are still lazy to put yourfinancial plan in place, just look at your family and draw that necessary inspiration.
Attitude: We all know how last year went for Yuvraj. Out of the team and people started talking about his pot belly, party animal nature etc. But after World Cup win, Yuvi said in an interview to TOI, that “if next time I am out of form, do not blame my lifestyle”…. That’s a winner’s attitude. When you have a point to prove, prove it and point it to the world. In Yuvi language – Let “balla” do the talking. In your financial life other people will not forget or forgive your bad decisions. Do not fight with a pig as it is the pig that enjoys a mud fight, but you get dirty in the bargain. Best way is to reenergize and stick to the basics. Once you are successful, show it to the world as after a criticism session you deserve an applause too.
2nd April, 2011 was the day when we got what we desired for so long. Our generation has grown seeing the video footage of Kapil Paaji, dressed like a gentlemen, lifting the cup and then the champagne raining from the balcony of the Lord’s. Now Dhoni has given us one more such memory and this is special as we have seen this team growing from bottom to the top. These “men in blue” really showed that with a strategy in place (Viru said that this Team was already working on the World Cup since last one year but we know they were planning from at least 4 years), and discipline you can change the fortunes.
Let me take you to the Financial Planning learnings from this World Cup Final win:
Setting Goals: After losing match Sangakkara said “I think if you need to win against India you have to score 350”. Well what he said is life. “You need to plan and plan extra for what you have not planned”. Although I am sure that Dhoni that day would have challenged 350 too, with the form the team was in but in our life we must make afinancial plan to achieve our goals.
Asset allocation and Diversification: Sreesanth played poorly but his performance did not impact India as much, as others contributed well. A player is like an asset and you need to pick a right combination. Diversification benefits if one asset is out of form or flavor.
Short Term Performance: Zaheer Khan gave too many runs in last overs & Sehwag got out for a duck, but that doesn’t mean they are not good players. So, we can’t judge them by single match performance. Similarly you should not judge investments on their short term performance. Give them a suitable time and their justified cycle.
Beware of Mis-selling: There was some sort of cheating in the toss as Michael Vaughan said on his twitter “Sangakkarra has stuffed Dhoni… He shouted tail in the 1st toss and lost it …You can hear it in on air,” Sometime even before you start investing people will cheat you, mis-sell you. The way is to beware of the cheats and take a corrective action. You simply can’t fold your hands and surrender your financial life to the sharks. You need Fight till you have a plan which you are confident that your financial goals would be achieved.
Role of a Coach: You would be lucky if you saw Gary Kirsten laughing. The man is so miserly at even giving a smile. Gary Kristen was not playing but we know he was the “Krishna” of this world cup Mahabharata. The rule in financial planning is that, someone needs to decide and take action. And one can only decide if he has the full knowledge. If you feel you do not have the proper insight or know-how of this financial world get a Coach. And he is your Financial Planner. By the way, Financial Planner also may have a frowning face and bad sense of humor but I know they feel happy when they see their client is enjoying his financial life.
Predicting patterns: People try to predict future too much by looking at past. Before match started media started its DARAO kind of coverage–Host nation never won world cup… If Sachin makes a ton India will lose…. After losing toss – team batting first won 80% of the finals …. After Sri Lankan inning – no one ever won world cup chasing 274… blah blah. Similarly people try to find patterns in equity markets. If history would have repeated every time, what is the thrill in life than? Learn from History but do try to make it a Science and start taking it as a basis of your decisions.
Inspiration: This cup was for Sachin. Thousands of eyes got wet (including mine) when Virat said “he has carried Indian cricket for 23 years, and now it was their turn”. Sachin was not able to contribute much in the final but he was the backbone. In life also and particularly in Financial life we all should have inspirations. Our financial decisions will make or mar the lives of our dependent, so next time if you are still lazy to put yourfinancial plan in place, just look at your family and draw that necessary inspiration.
Eyes on goal not on the score board: The start was bad for the Indian innings, but Virat, Gambhir and Dhoni had eyes set on the goals. They were not looking at score board after every ball they were just playing to win it. In our life too, we may win or lose in short run, but confronting it on constant basis is a futile exercise. When you sit with your financial planner, the goals are drawn and strategy is in place, chasing markets is a waste of time. These should be non-events and believe in your Financial Coach, that he would provide the extra cushions, in case you need them.
Take Responsibility: More than the World Cup Win, Dhoni’s respect as a man has gone manifold just because of one brave decision and that was to promote him up in the batting order and face the Lankans. Just imagine the pressure he was in when he came in to bat in front of the 6.5 crore pair of eyes watching him. Thriller…. Dhoni is the captain of Indian team & you are captain of your family – so take responsibility. You are the asset creator and manager of your family – understand this. On the field or off the field take wise decisions. Some of them are hard, like paying for a Term Insurance, despite knowing that you are young to die and will not get anything once the policy matures. Or when a friend boasts that he made a killing in the commodities but you are sticking to same boring once in a month SIPs. Being Dhoni is very tough but it’s worth when you get a World Cup.
And now the last one but I feel it to be the most important:
Attitude: We all know how last year went for Yuvraj. Out of the team and people started talking about his pot belly, party animal nature etc. But after World Cup win, Yuvi said in an interview to TOI, that “if next time I am out of form, do not blame my lifestyle”…. That’s a winner’s attitude. When you have a point to prove, prove it and point it to the world. In Yuvi language – Let “balla” do the talking. In your financial life other people will not forget or forgive your bad decisions. Do not fight with a pig as it is the pig that enjoys a mud fight, but you get dirty in the bargain. Best way is to reenergize and stick to the basics. Once you are successful, show it to the world as after a criticism session you deserve an applause too.
They say “learn a good thing from your religion” so we should also learn from cricket as “Cricket is not less than a religion in India”.
Would you like to add few more finance related learnings from cricket?? 
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