CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS, INC. TOPIC LIST FOR CFP@CERTIFICATION EXAMINATION The following topics, based on the 2004 Job Analysis Study, are the basis for the CFPmCertificationExaminations. Each exam question will be linked to one of the following topics, in the approximate percentages indicated following the general headings. Questions will pertain to all levels in Bloom's taxonomy with an emphasis on the higher cognitive levels. Questions often will be asked in the context of the financial planning process and presented in an integrative format. In addition to being used for the CFP" Certification Examination, this list indicates topic coverage requirements to fulfill the pre-certification educational requirement. Continuing education (CE) programs and materials that address these topics will be eligible for CFP Board CE credit. (References to sections (3) in this list refer to sections of the Internal Revenue Code) First Test Date: November 2006 GENERAL PRINCIPLES OF C) Principle 3 - Competence B. Secured vs. unsecured debt d) Principle 4 - Fairness C. Buy vs. leaselrent FINANCIAL PLANNING ( 11 %) e) Principle 5 - Confidentiality D. Mortgage financing 1. Financial planning process f) Principle 6 - Professionalism 1) Conventional vs. adjustable- A. Purpose, benefits, and components g) Principle 7 - Diligence rate mortgage (ARM) B. Steps 6) Rules 2) Home equity loan and line 1) Establishing client-planner B) Disciplinary Rules and Procedures of credit relationships 3) Refinancing cost-benefit 2) Gathering client data and 3. CFP Board's Financial Planning analysis determining goals and Practice Standards 4) Reverse mortgage expectations A) Purpose and applicability 3) Determining the client's B) Content of each series (use most 7. Function, purpose, and regulation financial status by analyzing current Practice Standards, as posted of financial institutions and evaluating general financial on CFP Board's Web site at A. Banks status, special needs, insurance and www.CFP.net) B. Credit unions risk management, investments, C. Enforcement through Disciplinary C. Brokerage companies taxation, employee benefits, Rules and Procedures D. Insurance companies retirement, andlor estate planning E. Mutual fund companies 4) Developing and presenting the 4. Financial statements F. Trust companies financial plan A. Personal 5) Implementing the financial plan 1) Statement of financial position 8. Education planning 6) Monitoring the financial plan 2) Statement of cash flow A. Funding C. Responsibilities B. Business 1) Needs analysis 1) Financial planner 1) Balance sheet 2) Tax crediWadjustmenW 2) Client 2) Income statement deductions 3) Other advisors 3) Statement of cash flows 3) Funding strategies 4) Pro forma statements 4) Ownership of assets 2. CFP Board's Code of Ethics and 5) Vehicles Professional Responsibility and 5. Cash flow management a) Qualified tuition Disciplinary Rules and Procedures A. Budgeting programs (5529 plans) A. Code ofEthics and Professional B. Emergency fund planning b) Coverdell Education Responsibility C. Debt management ratios Savings Accounts 1) Preamble and applicability 1) Consumer debt C) Uniform Transfers to 2) Composition and scope 2) Housing costs Minors Act (UTMA) and 3) Compliance 3) Total debt Uniform Gifts to Minors 4) Terminology D. Savings strategies Act (UGMA) accounts 5) Principles d) Savings bonds a) Principle 1 - Integrity 6. Financing strategies B. Financial aid b) Principle 2 - Objectivity A. Long-term vs. short-term debt Copyright O 2005 by Certified Financial Planner Board of Standards Inc. All rights resewed. CertlRed Financial Planner Board of Standards Inc. owns these certification marks In the US.. whlrh It awards to individuals who succeufully complete CFP Board's initid and ongoitq certification requirements 9. Financial planning for special D. Response to risk C. Elimination period circumstances 1) Risk control D. Benefit amount A. Divorce a) Risk avoidance E. Provisions B. Disability b) Risk diversification F. Taxation of premiums and benefits C. Terminal illness C) Risk reduction D. Non-traditional families 2) Risk financing 20. Long-term care insurance (individual) E. Job change and job loss a) Risk retention A. Eligibility F. Dependents with special needs b) Risk transfer B. Services covered G. Monetary windfalls E. Legal aspects of insurance C. Medicare limitations 1) Principle of indemnity D. Benefit period 10. Economic concepts 2) Insurable interest E. Elimination period A. Supply and demand 3) Contract requirements F. Benefit amount B. Fiscal policy 4) Contract characteristics G. Provisions C. Monetary policy 5) Policy ownership H. Taxation of premiums and benefits D. Economic indicators 6) Designation of beneficiary E. Business cycles 21. Life insurance (individual) F. Inflation, deflation, and stagflation 16. Analysis and evaluation of risk exposures A. Concepts and personal uses G. Yield curve A. Personal B. Policy types 1) Death C. Contractual provisions 11. Time value of money concepts and 2) Disability D. Dividend options calculations 3) Poor health E. Nonforfeiture options A. Present value 4) Unemployment F. Settlement options B. Future value 5) Superannuation G. Illustrations C. Ordinary annuity and annuity due B. Property H. Policy replacement D. Net present value (NPV) 1) Real I. Viatica1 and life settlements E. Internal rate of return (IRR) 2) Personal F. Uneven cash flows 3) Auto 22. Income taxation of life insurance G. Serial payments C. Liability A. Dividends 1) Negligence B. Withdrawals and loans 12. Financial services regulations and 2) Intentional torts C. Death benefits requirements 3) Strict liability D. Modified endowment contracts A. Registration and licensing D. Business-related (MEG) B. Reporting E. Transfer-for-value C. Compliance 17. Property, casualty and liability insurance F. 51035 exchanges D. State securities and insurance laws A. Individual 1) Homeowners insurance 23. Business uses of insurance 13. Business law 2) Auto insurance A. Buy-sell agreements A. Contracts 3) Umbrella liability insurance B. Key employee life insurance B. Agency B. Business C. Split-dollar life insurance C. Fiduciary liability 1) Commercial property insurance D. Business overhead expense 2) Commercial liability insurance insurance 14. Consumer protection laws a) Auto liability A. Bankruptcy b) Umbrella liability 24. lnsurance needs analysis B. Fair credit reporting laws C) Professional liability A. Life insurance C. Privacy policies d) Directors and officers liability B. Disability income insurance D. Identity theft protection e) Workers' compensation and C. Long-term care insurance employers liability D. Health insurance E. Property insurance INSURANCE PLANNING AND 18. Health insurance and health care cost F. Liability insurance management (individual) RISK MANAGEMENT (14%) A. Hospital, surgical, and physicians' 25. Insurance policy and company expense insurance selection ,. Principles of risk and insurance B. Major medical insurance and A. Purpose of coverage A. Definitions calculation of benefits B. Duration of coverage B. Concepts C. Continuance and portability C. Participating or non-participating 1) Peril D. Medicare D. Cost-benefit analysis 2) Hazard E. Taxation of premiums and benefits E. Company selection 3) Law of large numbers 1) Industry ratings 4) Adverse selection 2) Underwriting 5) Insurable risks 19. Disability income insurance (individual) 6) Self-insurance A. Definitions of disability C. Risk management process B. Benefit period Copyright O 2005 by Certified Financial Planner Board of Standards Inc. All rights reserved. Certlfied Financial Planner Board of Standards In<. owns these <ertifl<ation marks in the U.S.. thick it awards to individuals tho smcufully complete CFP Board's initial and ongoing certification requirmmh. 26. Annuities 31) Employee stock options 2) Salary continuation plans A. Types A. Basic provisions 3) Rabbi trusts B. Uses 1) Company restrictions 4) Secular trusts C. Taxation 2) Transferability C. lncome tax implications 3) Exercise price 1) Constructive receipt 4) Vesting 2) Substantial risk of forfeiture EMPLOYEE BENEFITS 5) Expiration 3) Economic benefit doctrine 6) Cashless exercise D. Funding methods PLANNING (8%) B. Incentive stock options (ISOs) E. Strategies 1) lncome tax implications 27. Group life insurance (regular, AMT, basis) A. Types and basic provisions a) Upon grant INVESTMENT PLANNING 1) Group term b)Upon exercise 2) Group permanent c)Upon sale (19%) 3) Dependent coverage 2) Holding period requirements B. lncome tax implications 3) Disqualifying dispositions 34. Characteristics, uses and taxation C. Employee benefit analysis and 4) Planning opportunities and of investment vehicles application strategies A. Cash and equivalents D. Conversion analysis C. Non-qualified stock options 1) Certificates of deposit E. Carve-out plans (NSOs) 2) Money market funds 1) lncome tax implications 3) Treasury bills 28. Group disability insurance (regular, AMT, basis) 4) Commercial paper A. Types and basic provisions a) Upon grant 5) Banker's acceptances 1) Short-term coverage b) Upon exercise 6) Eurodollars 2) Long-term coverage c) Upon sale B. lndividual bonds B. Definitions of disability 2) Gifting opportunities 1) U.S. Government bonds and C. lncome tax implications a) Unvestedhested agency securities D. Employee benefit analysis and b) Exercisedlunexercised a) Treasury notes and bonds application c) Gift tax valuation b) Treasury STRIPS E. Integration with other income d) Payment of gift tax 3) Planning