CFP Flashcards

All 20 terms

CFP

Certified Financial Planner, a personal financial planning certification administered by CFP Board.

CFP Board

The US body that sets the education, exam, experience and ethics standards for the CFP certification.

Financial planning

Helping a person organise their finances to meet life goals across saving, protecting and investing.

The 4 E's

Education, Examination, Experience and Ethics - CFP Board's four certification components.

Financial planning process

CFP Board's step-by-step approach to advising a client, from understanding their situation to monitoring the plan.

Fiduciary duty

The obligation to act in a client's best interest when providing financial planning.

Code and Standards

CFP Board's Code of Ethics and Standards of Conduct for CFP professionals.

Risk management

Identifying and reducing financial risks, often through insurance.

Insurance planning

Choosing coverage for life, health, disability, property and liability risks.

Investment planning

Building an approach to risk, return and asset selection suited to a client's goals.

Tax planning

Arranging finances to be tax-aware across planning decisions.

Retirement planning

Accumulating savings and turning them into sustainable retirement income.

Estate planning

Arranging the transfer of a person's wealth and affairs.

Psychology of financial planning

The study of client behaviour, communication and counselling in planning.

Cash flow

The money coming in and going out over a period.

Net worth

Total assets minus total liabilities.

Time value of money

Money today is worth more than the same amount later because it can earn a return.

Capstone course

The financial plan development course required within the registered education program.

Experience requirement

6,000 hours (Standard) or 4,000 hours (Apprenticeship) of qualifying work.

CPE

Continuing Professional Education - 30 hours every 2 years (including 2 hours of Ethics) to maintain the CFP.