DIFFERENCE BETWEENFINANCIAL PLANNING AND WEALTH MANAGEMENT

Deepak Jain, CFP, CWM

DIFFERENCE BETWEENCFP AND CWM CERTIFICATIONS

Deepak Jain, CFP, CWM

CFPCM and CWM®

Certified Financial Planner Chartered Wealth Manager

Difference Between Financial Planning and Wealth Management

Financial Planning relates to creation and execution of a strategy to achieve a set of financial goals. 

Financial Planning is passive management of wealth through asset allocation and risk management.

Wealth Management deals with creation, accumulation, preservation and enjoyment of wealth.

Wealth Management involves active management in terms of identifying and taking advantage of opportunities to create and enjoy wealth and can even include sharing of wealth through philanthropy.

Financial Planning Wealth Management

Difference Between Financial Planning and Wealth Management

Whereas, Financial Planning is a supportive or auxiliary component that addresses broad goals or issues (e.g. college funding, cash flow modeling, estate tax estimates and funding, spendthrift provisions within a trust, multi-generational family lifestyle funding, etc.)

 Financial planning usually means creating a strategy for accumulating wealth for retirement and personal goals.

One way to view Wealth Management, would be as a comprehensive or specific set of plans and strategies designed to manage a set of assets or one large category of assets (e.g. an investment portfolio, closely held business, commercial real estate, etc.) towards specific outcomes.

Wealth Management is more comprehensive.

Wealth Management provides greater attention to detail. 

Financial Planning Wealth Management

Difference Between Financial Planning and Wealth Management

Financial Planning is the construction of the basic “blueprint” for an individual or family to follow. It will include asset allocation, taxation, cash flow management, a “safety fund”, insurance and basic risk management, and the construction of a foundation estate plan including living documents.

Once an individual accumulates enough wealth, and this is a moving target for each person, they start thinking about Wealth Preservations and Wealth Transfer ,now we are into “Wealth Planning”. 

At this wealth “breakpoint”, an individual starts to think differently. They will entertain more advanced strategic ideas to transfer wealth efficiently and minimize taxation.  

Financial Planning Wealth Management

*Areas of Learning Include

*In the above representation areas of learning not covered by CFPCM Certification are included and any common area of learning has been Intentionally Excluded

Learning Outcomes of Certifications

CWM® Certification CFPCM certification

Enter into the spectrum of Wealth Management Products

Enter into the spectrum of Financial Planning Products

Learn more about Banking, Equity Analysis, PMS, Mutual Fund, Alternate Investment Products, Real Estate, International Taxation, Estate Planning, Insurance, etc.

Learn More about Risk management, Retirement Planning, Direct Taxation and Estate Planning.

Understand the various Portfolio Management Techniques and Managing Clients Asset Allocation to its optimization

Understanding and Applying the financial planning process in the practice of financial planning

Start Catering to HNI & UHNI Clients along with your existing clientele

Risk and insurance decisions in personal Financial Planning and understand Retirement need analysis techniques

Liaising with large corporate clients for debt syndication and structured equity advisory

Optimize strategies to make asset management recommendations

Building investments proposition for consumer banking domain and creating a financial planning platform for investment advisory services

Consider potential opportunities & constraints & assess Information to develop strategies & collect the quantitative & qualitative information required to develop a financial plan

Universe of Client Handling

Based on the Size of Clients’ Portfolio

HNI = USD 1 Million

UHNI = USD 5 Million

Fast Facts

Basic Certification Differences

Parameters CWM® certification CFPCM certification

Global Certification - Territorial Limitation

The certification is awarded directly by the parent body AAFM®, US which makes the CWM® certification truly global and is accepted globally without any territorial limitation. The candidates do not have to undergo any additional certification / examination if he / she want to pursue their career in any other jurisdiction.

The certification is awarded by the Indian Chapter i.e. FPSB India which restricts the certification to be global in true sense and is recognized in India only. The candidates will have to undergo additional certification / examination, if he / she want to pursue their career in any other valid country.

Career Avenues Analyst, Research, KPO, Banking, Brokerage Firms, Mutual Fund Houses, Private Banking, Wealth Management firms, Financial Planning Outfits, Insurance Companies, Corporate Training, Educational Institutions, Independent Financial Advisory

Banking, Mutual Fund Houses, Financial Planning Outfits, Insurance Companies, Corporate Training, Educational Institutions, Independent Financial Advisory

Examination There are 2 levels of examinations i.e. Level 1 and Level 2. Online Examination

There are five examinations. Online Examination - Daily basis

Courseware Qualitative & Standardized Courseware, being provided by AAFM India

The courseware is not provided by FPSB India and needs to be developed by EP

Experience 3 Years for Experience PathwayNo Experience Requirement for Certification

3 Years for Certification

Basic Certification Differences

Parameters CWM® certification CFPCM certification

Pathway to Register

Compulsory Pathway - EligibilityPassed minimum 12th Standard

Experience Pathway - EligibilityPassed Graduation 3 years of minimum work experience.

Regular PathwayPassed minimum 10th Standard

Challenge Status Pathway Candidate must hold a professional qualification 3 years of minimum work experience.

Career Avenues Analyst, Research, KPO, Banking, Brokerage Firms, Mutual Fund Houses, Private Banking, Wealth Management firms, Financial Planning Outfits, Insurance Companies, Corporate Training, Educational Institutions, Independent Financial Advisory

Banking, Mutual Fund Houses, Financial Planning Outfits, Insurance Companies, Corporate Training, Educational Institutions, Independent Financial Advisory

Examination Level 1 examination is of 2 Hour and Level 2 is 3 Hours MCQTotal Cost of Examination – Rs. 4,000/- (Compulsory Path.)Total Cost of Examination – Rs. 2,000/- (Experience Path.)

The Exam 1-4 are of 2 Hours each and Exam 5 is of 4 Hours MCQTotal Cost of Examination = Rs. 13,000/-

Total cost for Candidate

Compulsory Pathway – Rs. 19,000/-Experience Pathway – Rs. 12,000/-Corporate Pathway- Rs. 9551/-

Regular Pathway – Rs. 33,000/-Challenge Status Pathway – Rs. 30,000/-

For More Information:Website: www.aafmindia.co.in

Tel: 011-45120800