CFP Vs CPFA

Lot of Investment Advisors in India are faced with a question - which certification will add value to my advisory business - CFP or CPFA ? The analysis is given below and it is up to the reader to decide on the certification based on his profile. CFP ( Certified Financial Planner) CFP is an internationally recognised certification and is considered to be the gold standard in Investment Advisory / Financial Planning Industry. CFP is given by FPSB ( Financial Planning Standards Board ). This board has a representation in several countries including India. CFP is one of the costliest certification exams. Please refer the original site for the actual costs. However, it may cost somewhere around Rs 25,000/- to obtain this certification. CPFA ( Certified Personal Financial Advisor ) CPFA is the certification exam given by NISM. But this is not a mandatory exam (as of July 2012). There is a speculation in the market that this may be made mandatory by SEBI in the near future for all people involved in the sales and investment advisory positions. Exam fee is just Rs4000. So its a lot cheaper than CFP. It can be simply termed as a low cost Indian CFP. The validity of this certificate is 3 years. Since its backed by NISM ( SEBI Institute ), more corporates are pushing their employees to take up this exam. Right now, this exam is being taken up by professionals in Investment Advisory / Sales positions. The syllabus and the concepts covered in both CPFA & CFP are almost the same. So those of who are in dilemma can choose to do the CPFA first and then proceed to CFP.

So many advisors are asking this question - How will this CFP / CPFA certificate help my business? Obviously, there is no direct link between this certification and your business. The logic is that, as this certificate becomes popular in India, the clients may prefer an Investment Advisor with a CFP/CPFA over an ordinary advisor without these certifications. But in a country like India, where most of the people are financial illiterates, one cannot expect them to appreciate a professional qualification of an investment advisor. The recognition of this certificate is happening in the metros in insignificant numbers. So if you are an advisor in a tier 2 city, perhaps you should think twice about going for such costly certifications. Its because the clients you might have there in your city might not even heard of CFP or CPFA. So it doesnt add any value to the advisor's business. Of course, the learning part is always there in any certification exam. Point is, why to take a certification exam spending more than Rs 25,000 when it adds no value to your advisory business? So its ideal if you do when you have or intend to have well informed clients who can recognize/appreciate your qualification. Ok then, if you have made up your mind to take up CPFA exam, take the practice tests here REGISTER & TAKE CPFA MOCK TEST