Financial Advisors'

Certification

Summary of the Syllabus

Institute of Financial Markets of Pakistan © 2016

OBJECTIVE OF THE EXAMINATION

This Certification Exam is specifically designed to meet the minimum qualification needs of the

mutual fund distributors working either directly with a fund management company or through

a distribution agent. It intends to ensure that they are competent to provide buying & selling

services to the mutual fund investors.

TARGET AUDIENCE

This examination is by and large mandated for all market participants undertaking the financial

advisory services independently or at AMCs, Stock Brokerage Firms, and Insurance Companies.

SYLLABUS STRUCTURE

The curriculum is divided into elements and these are broken down into a series of learning

objectives. Each learning objective begins with one of the following prefixes: know, understand,

be able to calculate and be able to apply. These words indicate the different levels of skill to be

tested. Learning objectives prefixed:

know require the candidate to recall information such as facts, rules and principles

understand require the candidate to demonstrate comprehension of an issue, fact, rule

or principle

be able to calculate require the candidate to be able to use formulae to perform

calculations

be able to apply require the candidate to be able to apply their knowledge to a given set

of circumstances in order to present a clear and detailed explanation of a situation, rule

or principle

EXAMINATION SPECIFICATION

Each examination paper is constructed from a specification that determines the weightings that

will be given to each element. The specification is given below.

It is important to note that the numbers quoted may vary slightly from examination to

examination as there is some flexibility to ensure that each examination has a consistent level

of difficulty. However, the number of questions tested in each element should not change by

more than plus or minus 2.

Examination Specification

100 multiple choice questions

Element number Element Questions

1 Concept of Financial Planning 20

2 Measuring Investment Returns and Strategies 30

3 Insurance Planning and Risk Management 15

4 Retirement Planning and Taxation 20

5 Investment Vehicles and Types of Markets 15

Total 100

ASSESSMENT STRUCTURE

This will be a 150 minutes examination of 100 multiple choice questions. All questions will carry

equal marks. There will be no negative marking.

SUMMARY OF THE SYLLABUS

ELEMENT 1

Concept of Financial Planning

Introduction

What is Financial Planning?

Need for Financial Advisory Services

Role of a Financial Advisors

Scope of Financial Planning

How to Analyze Client Goals?

What counts as Assets for an individual?

What counts as Assets for an individual?

What are common Liabilities for an individual?

How can net worth statement help an Investor?

What is an Income and Expenditure Statement

What do Financial Ratios related to Net Worth tell an investor?

What are common Life Goals & Financial Objectives?

How is Return Objective formulated?

How do we analyze the Risk Objective?

How do we analyze Client Needs?

Recommending Investment Strategy

Monitoring & Reviewing Periodically

ELEMENT 2

Measuring Investment Returns and Strategies

Introduction

Risk and Return

Time Value of Money

Annuities

Net Present Value (NPV)

Mutual Fund Performance

Total Return and Risk Adjusted Return

Capital Gains

Investment Strategies

-Active and Passive Strategies

-Asset Allocation

.

ELEMENT 3

Insurance Planning and Risk Management

Introduction

Learning Goals

Risk Management

Personal Risk Management

Functions of Insurance

Life Insurance Needs Analysis

ELEMENT 4

Retirement Planning and Taxation

Introduction

Why plan for retirement?

Money requirement after retirement

Where will my Money come from?

Inflation Adjusted and Nominal Returns on Investments

Gratuity

Provident Fund

Inflation Adjusted Expense

Asset Allocation

Annuities

Retirement Overview In Pakistan

Income Tax

-Types of Taxes

-Tax Planning

-Taxation in Pakistan

-Income Subject To Tax

-Taxation of Employer-Provided Stock Options

-Capital Gains and Losses

-Deductions

-Rates

-Double Tax Relief and Tax Treaties

-Corporate Income Tax

-Tax Rates

-Tax Incentives

-Administration

-Determination of Trading Income

ELEMENT 5

Investment Vehicles and Types of Markets

Introduction

Types of Assets

Bank Deposits

Bond Markets

Private Sector Bonds

Government Bonds

Government Saving Schemes

Equity Market

Mutual Funds

Derivatives

Real Assets