CFP Module 1 and Module 2 covers Foundation in Financial Planning and Tax Planning, and Insurance Planning and Estate Planning, respectively. This is how my textbooks look like. Don’t be too intimidated by the thickness – the font is on the bigger side.
Taking CFP during pandemic vs pre-pandemic
A quick disclaimer: I’ll be writing this in the POV of myself and my experience taking the CFP Modules through my education provider, so other people’s experiences may vary. I’m also taking CFP during the pandemic, which means all my classes were held online.
The difference between online CFP classes and physical classes, as far as I could tell:
Online CFP Classes
Physical CFP Classes
*6 classes (?)
4 hours per class (9am-1pm OR 1-5pm slot)
8 hours per class (9am-5pm )
*Note: CFP Module 4, the last module and also I heard the hardest, contains more classes
As you can see, online CFP classes take up HALF the time of physical CFP classes, so the efficient side of me is happy. I think online CFP classes would suit people who are good at self-studying, but I admit I miss the face-to-face interactions, as well as possible friendships with classmates. It’s just different with Zoom 🙁
CFP Module 1 – Foundation in Financial Planning and Tax Planning
CFP Module 1 – Foundation in Financial Planning and Tax Planning contains 11 topics:
Introduction to financial planning
Regulatory controls and practices affecting financial planning
Nature and scope of financial planning
The economic environment and its effects on financial planning
Analytical tools for financial planning professionals
Risk management and insurance planning
Retirement planning and estate planning
The basis of a financial plan
Code of ethics
What I learned from CFP Module 1
It’s an overview
Module 1 mostly covers the basics – many topics are further expanded in:
CFP Module 2 – Insurance and Estate Planning
CFP Module 3 – Investment Planning and Retirement Planning
CFP Module 4 – Financial Plan Construction
It also covers the basics of economics, Malaysia’s financial regulatory landscape, and the financial planning profession itself. Anyone with a passing interest in these things would have known of the information. I did, but it’s good to know in a structured format.
I like the part on Code of Ethics. They really remind you that certified financial planners serve the client, and are NOT product pushers. Everything you do, you have to do it in the client’s best interest, not your pocket. I really appreciate that part.
Get a financial calculator
In the first class of CFP Module 1, we were quickly told to get a financial calculator. I didn’t even know such tools existed!
There are various models, but you should get the financial calculator your lecturer recommended, just to make your life easier. Our lecturer suggested two models, Casio FC-200V and HP10bII+, and highly recommended the former, so that’s what I got.
In case you ask – no, you don’t need to be good at maths to be a financial planner. As long as you do the practice questions, you should get the hang of the calculations quickly enough. My education provider also holds optional classes just to practice financial calculations every semester
CFP Module 2 – Insurance Planning and Estate Planning
Understanding life insurance policy contracts and takaful
General insurance policy contracts
Annuity policy contracts
Legislation and rules in the insurance industry
Consumer protection and codes of practice
Estate planning fundamentals
Wills and will planning
Power of Attorney
Duties and Powers of the Personal Representative
Rights of beneficiaries
Special estate planning issues for business owners
Unlike CFP Module 1, CFP Module 2 really doubled down on legalese, so I forced my inner lawyer to wake up and pay attention. I learned so many new terms and jargon!
As for the financial calculations, it’s minimal in comparison, but apparently they will come back with a vengeance in Modules 3 and 4 😀
What I learned from CFP Module 2
The different types of insurance
Most people have heard of life insurance, health, critical illness, fire, car, etc. And yes the module covers those in detail. This is the majority of insurance content targeted to consumers like you and me. (I also write about insurance here in RoR)
But additionally, in CFP Module 2 I found out there are more types of insurance products, not just for personal use but also for businesses as well. They can get incredibly specific and random, like, uh, Golf insurance
and Marine insurance
I think, if you’re a naturally paranoid person, you will go NUTS over all the possible types of things that *may* go wrong, that you have not even considered before. Fun.
How to use estate planning tools
This part was incredibly fascinating, I was engrossed by the different financial tools you can use in different scenarios to decide where your wealth goes after you’re gone (or comatose or physically/mentally incapable of taking care of yourself).
Listen, if you’re petty – and I’m not saying that to judge, I’m hella petty myself – you should hire an estate planner. Go ahead and make a list of people you want to leave money/assets behind and DON’T want to leave assets behind, then use wills, trusts, hibah, whatever, to serve your wishes. It’ll make the thought of dying less morbid, in an ‘I’ll have the last laugh’ kinda way.
Additionally, if you’re Muslim AND have irresponsible male family members who will get an inheritance under faraid but you KNOW is not deserving of the money, then check out How to Avoid Islamic Inheritance Laws in Malaysia article. Important: read the comments section for input (and contacts) of actual Islamic estate planners.
End CFP Modules 1 and 2. Onwards to CFP Modules 3 and 4
According to my education provider, CFP Module 1 and Module 2 are fairly easy classes, with high passing rates (provided you put in the effort of course). It’s CFP Module 3 and Module 4 that you have to worry about.
As of time of writing, I have enrolled myself into Module 3 and bucking myself up for topics related to investment planning and retirement planning. I’m not going to worry about the exams now – as they say, worrying early means you suffer twice 😀