CFP Board Financial Planning Competency Handbook

Certified Financial Planner Board of Standards, Inc., is a nonprofit organization acting in the public interest by fostering professional standards in personal financial planning. The CFP Board sets and enforces the standards for CFP® certification, the recognized standard of excellence for personal financial planning. Individuals who successfully complete the CFP Board's initial and ongoing certification requirements—including requirements related to education, examination, experience, and ethics—are awarded the right to use the CFP® certification marks. CFP® certification identifies financial planners who are true professionals in one of the fastest growing and exciting careers today, allowing the public to find professionals qualified to provide competent and ethical financial planning services delivered with a fiduciary standard of care, putting the client's best interests first. They are located in Washington, D.C.

Part One

Chapter 1 Theory and Practice

Connections Diagram

Chapter Introduction

Student-Centered Learning Objectives based upon CFP Board Principal Topics

In Class

Professional Practice Capabilities

In Practice

Part Two Personal Financial Planner

Chapter 2 Financial Planning Process (John E. Grable, Ph.D., CFP® & Ronald A. Sages, MBA, CFP®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class⁷

V. Professional Practice Capabilities

VI. In Practice

Prospective Client

Kariga

Chapter 3 Financial Statements (Thomas Warschauer, Ph.D., CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Patricia

Chapter 4 Cash Flow Management (Martie Gillen, Ph.D. & Michael Gutter, Ph.D.)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. Practice Vignettes

Thomas

Joseph

Chapter 5 Financing Strategies (Kenneth Wynn, Martie Gillen, Ph.D., Michael Gutter, Ph.D. & Jorge Ruiz Menjivar)

I. Connections Diagram

II. Introduction

III. Learning Objective

IV. In Class

V. Professional Practice Capabilities

VI. Practice Vignettes

Clarence and Robin

Stanley and Simone

Chapter 6 Function, Purpose, and Regulation of Financial Institutions (John E. Grable, Ph.D., CFP^® & Sonya L. Britt, Ph.D., CFP^®)

Connections Diagram

Introduction

Learning Objectives

In Class

Professional Practice Capabilities

In Practice

Rebecca

Janie

Chapter 7 Education Planning Michael Gutter, Ph.D. & Martie Gillen, Ph.D.)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Jack and Luisa

Margaret

Marcus and Stacey

Chapter 8 Financial Planning for Special Circumstances (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Susan and Ed

Tom and Gayle

Chapter 9 Economic Concepts (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Pema

Chapter 10 Time Value of Money (Jorge Ruiz-Menjivar, Martie Gillen, Ph.D., Michael Gutter, Ph.D. & Kenneth Wynn)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. Practice Vignettes

Pablo and Whitney

Alba and Douglas

David

Chapter 11 Financial Services Regulations and Requirements (John E. Grable, Ph.D., CFP® & Sonya L. Britt, Ph.D., CFP®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Shaylea

Bill

Chapter 12 Business Law (Thomas Warschauer, Ph.D., CFP^{® &} Don L. Harrington, J.D.)

Connections Diagram

Introduction

Learning Objectives

In Class

Professional Practice Capabilities

In Practice

John

Chapter 13 Consumer Protection Laws (John E. Grable, Ph.D., CFP® & Sonya L. Britt, Ph.D., CFP®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Sarah

Wilma

Chapter 14 Principles of Risk and Insurance (Dave Yeske, DBA, CFP®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Marilyn and Jonathan

Skyla and Brent

Nancy

Chapter 15 Analysis and Evaluation of Risk Exposures (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Marie and George

Franklin

Chapter 16 Health Insurance and Health Care Cost Management (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Jacob

Arethra

Chapter 17 Disability Income Insurance (individual) (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Patricia

William

Chapter 18 Long-Term Care Insurance (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Madeline

Emma and Donald

Chapter 19 Life Insurance (individual) (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Miriam

Georgette and Willem

Chapter 20 Income Taxation of Life Insurance (Martin C. Seay, Ph.D. & Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

V. Professional Practice Capabilities

VI. In Practice

Juan and Maria

Penny

Chapter 21 Business Uses of Life Insurance (John Gilliam, Ph.D.)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. Business Uses of Life Insurance: In Class

Business Transfer and Key Person Protection

Non-Qualified Benefits

V. Professional Practice Capabilities

Business Transfer

Non-Qualified Benefits

VI. Business Uses of Life Insurance: In Practice

Rebecca

Zhang and Li

Rafael and Angela

Dan, Cindy, and Sean

Jim

Chapter 22 Insurance Needs Analysis (Thomas Warschauer, Ph.D., CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Marie and Steve

Chapter 23 Insurance Policy and Company Selection (Thomas Warschauer, Ph.D., CFP^® & Andrew Head, MA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Stuart and Liza

Chapter 24 Annuities (John Gilliam, PhD & Andrew Head, MA, CFP^®)

I.  Connection Diagram

II. Introduction

Frequency of Contributions

Distribution Alternatives

Distribution Options

Investment Options

Taxation of Annuities

During Accumulation

During Distribution

Fees and Charges in Annuities

The Pension Protection Act of 2006

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Ann

Daniel and Naomi

Dafari and Bahati

Chapter 25 Characteristics, uses and taxation of investment vehicles (Swarn Chatterjee, Ph.D. & Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Rebecca

Mike

Chapter 26 Types of Investment Risk (Thomas Warschauer, Ph.D., CFP^®)

I.  Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Rosemary and James

Chapter 27 Quantitative Investments Concepts (Thomas Warschauer, Ph.D., CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Rodolfo and Henrietta

Chapter 28 Measures of Investment Returns (Thomas Warschauer, Ph.D., CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Robert and Mary

Chapter 29 Bond and Stock Valuation Concepts (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Georgette

Tobe and Steve

Chapter 30 Portfolio Development and Analysis (Thomas Warschauer, Ph.D., CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Robert and April

Chapter 31 Investment Strategies (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

George

Kenneth

Chapter 32 Asset Allocation and Portfolio Diversification (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Harry

Missy

Chapter 33 Income Tax Law Fundamentals (Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

John and Susan

Jose and Alexandra

Gloria

Chapter 34 Tax Compliance (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Horatio

Harlan

Chapter 35 Income Tax Fundamentals and Calculations (Lance Palmer, Ph.D., CFP®, CPA)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Rose

Chapter 36 Characteristics and Income Taxation of Business Entities (Webster Hewitt, CPA, CFP^{® &} Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Antwan

Peter

Homer

Chapter 37 Income Taxation of Trusts and Estates (Martin C. Seay, Ph.D. & Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

John

Steve and Martha

Chapter 38 Basis (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Rich

Lucy and Norah

Chapter 39 Tax Consequences of the Disposition of Property (Lance Palmer, Ph.D., CPA, CFP^{® &} Martin C. Seay, Ph.D.)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Paula

Francisco

Chapter 40 Alternative Minimum Tax (AMT) (Webster Hewitt, CPA, CFP^® & Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities:

VI. In Practice

Martin

Mandy

Mary

Chapter 41 Tax Reduction and Management Techniques (Lance Palmer, Ph.D., CPA, CFP^®)

Connections Diagram

Introduction

Learning Objectives

In Class

Professional Practice Capabilities:

In Practice

Bartolo and Marissa

Frank and Jan

Chapter 42 Passive Activity and At-risk Rules (Lance Palmer, Ph.D., CFP®, CPA)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Javier

Chapter 43 Tax Implications of Special Circumstances (Lance Palmer, Ph.D., CPA, CFP®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Jack and Deborah

Donald and Victoria

Chapter 44 Charitable Contributions and Deductions (Webster Hewitt, CPA, CFP^® & Lance Palmer, Ph.D., CPA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities:

VI. In Practice

Rick

Adrian

Montgomery

Chapter 45 Retirement Needs Analysis (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives.

IV. In Class

V. Levels of Practice Capability

VI. In Practice

Golden and Norwin

Mary Jane

Chapter 46 Social Security (Old Age, Survivor, and Disability Insurance, OASDI) (Thomas Warschauer, Ph.D., CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

John and Mary

Chapter 47 Types of Retirement Plans (John E. Grable, Ph.D., CFP®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Small Business Owner

Kristy’s Client

Chapter 48 Qualified Plan Rules and Options (Sharon A. Burns, Ph.D., CPA (Inactive))

Connections Diagram

Introduction

Learning Objectives

In Class

Professional Practice Capabilities

In Practice

JP and Max

Emma

Chapter 49 Other Tax Advantaged Plans (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

JP and Tammy

Rachel

Chapter 50 Regulatory Considerations (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Jim

Georgeann

Chapter 51 Key Factors Affecting Plan Selection for Business (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives.

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Eugene and Edumund

Charlita

Chapter 52 Investment Considerations for Retirement Plans (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class¹

V. Professional Practice Capabilities

VI. In Practice

Louise and Jonathan

Acme Giant Rubber Band Company

Chapter 53 Distribution Rules, Alternatives and Taxation (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

LaTasha

Charles

Chapter 54 Characteristics and Consequences of Property Titling (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Shelley and Mark

Margie

Chapter 55 Methods of Property Transfer at Death (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Mary and Rosa

Tim

Chapter 56 Estate Planning Documents (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Angie and Ralph

Jaques

Chapter 57 Gifting Strategies (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class ³

V. Professional Practice Capabilities

VI. In Practice

The Smiths and the Jones

Pat and Sam

Mary and Rosa

Chapter 58 Gift Tax Compliance and Tax Calculation (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Stephen and Susan

William

Oliver and Sharon

Chapter 59 Incapacity Planning (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Kyle

Jenny and Jeff

Susan

Chapter 60 Estate tax compliance and tax calculation (Elissa Buie, MBA, CFP^®)

Connections Diagram

Introduction

Learning Objectives

In Class

Professional Practice Capabilities

In Practice

Todd

Chapter 61 Sources for Estate Liquidity (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class¹

V. Professional Practice Capabilities

VI. In Practice

Anne and George

Robin and Allison

William

Chapter 62 Powers of Appointment (Sharon A. Burns, Ph.D., CPA (Inactive))

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Mabel

Meghan

Chapter 63 Types, Features and Taxation of Trusts (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Barat and Bavani

Latesha and Juan

Chapter 64 Qualified Interest Trusts (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Rosemary and Stormy

Padma and Sam

Bill and Sharon

Chapter 65 Charitable Transfers (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Tom and Jody

Susan and Samantha

Chapter 66 Use of Life Insurance in Estate Planning (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Jimmy and Amy

John

Barney and Jim

Chapter 67 Marital Deduction (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Bill and Beatrix

Tom and Jason

Kevin

Chapter 68 Deferral and Minimization of Estate Tax (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

The Hishidas

Amy

Chapter 69 Intra-Family and Other Business Transfer Techniques (Elissa Buie, MBA, CFP®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. Bloom’s Taxonomy

V. Professional Practice Capabilities

VI. Vignettes

Ann

Donald

Sherrell

Chapter 70 Generation Skipping Transfer Tax (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

James

Forrest and Amanda

Chapter 71 Fiduciaries (Martie Gillen, Ph.D.)

Connections Diagram

Introduction

Primary learning objective:

In Class

Professional Practice Capabilities:

In Practice

Susan

Chapter 72 Income in Respect of a Decedent (IRD) (Elissa Buie, MBA, CFP®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. Bloom’s Taxonomy

V. Professional Practice Capabilities

VI. Vignettes

Sarafina

Jazzy and Biyanka

Jerry

Chapter 73 Postmortem Estate Planning Techniques (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV.  Bloom’s Taxonomy

V. Professional Practice Capabilities

VI. Vignettes

Paul

Lau Chun

Chapter 74 Estate Planning for Non-Traditional Relationships (Elissa Buie, MBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Outcomes

IV. Bloom’s Taxonomy

V. Professional Practice Capabilities

VI. Vignettes

Chris and Dave

Katie

Chapter 75 Client and Planner Attitudes, Values, Biases and Behavioral Characteristics and the Impact on Financial Planning (Dave Yeske, DBA, CFP^®)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class⁴

V. Professional Practice Capabilities

VI. In Practice

Myra

Myra’s Learning Style

Chapter 76: Principles of Communication and Counseling (John E. Grable, Ph.D., CFP® & Kristy L. Archuleta, Ph.D., LMFT)

I. Connections Diagram

II. Introduction

III. Learning Objectives

IV. In Class

V. Professional Practice Capabilities

VI. In Practice

Haley

Mr. and Mrs. Jones

Chapter 77 Standards of Professional Conduct (Jorge Ruiz-Menjivar & Martie Gillen, Ph.D.)

Connections Diagram

Introduction

Learning Objectives

In Class

Professional Practice Capabilities

In Practice

Brent

Chapter 78 Establishing and Defining the Client-Planner Relationship (Elissa Buie, CFP^® & Dave Yeske, DBA, CFP^®)

Introduction

Seek first to understand

Then to be understood

Techniques

In Practice

Chapter 79 Gathering Information Necessary to Fulfill the Engagement

In Practice

Elsa

Pat and Tony

Chapter 80 Analyzing and Evaluating the Client’s Current Financial Status (Thomas Warschauer, Ph.D., CFP^®, Vickie Hampton, Ph.D., CFP^®,  & Andrew Head, MA, CFP^®)

Definition

Purpose

Techniques

In Practice

The Insurance Agent

The Financial Advisor

The Financial Planner

Chapter 81 Developing the Recommendation(s) (John E. Grable, Ph.D., CFP^® & Lance Palmer, Ph.D., CPA)

Defining a Recommendation

The Process of Recommendation Development

Systematic Approach

Evaluating Recommendations

Formalizing Recommendations

In Practice

Teddy

Chapter 83 Implementing the Financial Planning Recommendations (Deena Katz, Ph.D., CFP^® & Vickie Hampton, Ph.D., CFP^®)

Definition

In Practice

Purpose

Techniques

In Practice

Chapter 84 Monitoring the Recommendation(s) (Thomas Warschauer, Ph.D., CFP^® & Sharon A. Burns, Ph.D., CPA (Inactive))

Purpose

Definition

Techniques

In Practice

Chapter 85 Moving Forward (Lance Palmer, Ph.D., CPA, CFP^® & Charles R. Chaffin, Ed.D)

Development of a Profession

Career Path

Demographics

Age

Gender

Income, Wealth and Employment

Education

Ethnicity/Race

Research in Financial Planning

Focus on Planning