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CFP Singapore study materials
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CFP Singapore: Module 1 - Foundation of Financial Planning

CFP Singapore · Work through your exam, one topic at a time.

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Module 1 - Foundation of Financial Planning

Module 1 - Foundation of Financial Planning

Module 1 tests whether you can run an engagement end to end: the six-step planning process, the Singapore regulatory and ethics framework that a financial adviser works inside, the client data and analysis that underpin a plan, and the time-value-of-money mechanics every later module reuses. Many questions are sequencing questions - what the adviser should do first, or next.

The six-step process

  1. Establish and define the client–planner relationship: scope of engagement, fees, responsibilities of each party.
  2. Gather client data and goals - quantitative facts plus qualitative attitudes and risk tolerance.
  3. Analyse and assess the client's financial status: net worth statement, cash-flow statement, ratios.
  4. Develop and present the recommendations.
  5. Implement the agreed recommendations.
  6. Monitor and review, revising the plan as circumstances change.

Where the rules come from

  • Financial Advisers Act and Regulations: licensing, conduct, disclosure, Know-Your-Client, Know-Your-Product, suitability, and the balanced scorecard used to supervise representatives.
  • MAS is the regulator; FIDReC resolves consumer disputes; the Policy Owners' Protection Scheme and SDIC cover specified insurance claims and deposits.
  • FPSB Code of Ethics: integrity, objectivity, competence, fairness, confidentiality, professionalism, diligence.
  • CPF mechanics (contribution, allocation across Ordinary, Special, MediSave and Retirement Accounts, retention sums) and personal tax reliefs are the local plumbing behind most recommendations.

Worked example

A 35-year-old invests 1,500 at each month-end for 25 years at 4% p.a. compounded monthly (300 months). Monthly rate = 0.04 / 12 = 0.003333. Ordinary annuity future value = 1,500 x [(1.003333^300 − 1) / 0.003333] = 1,500 x 514.1, about 771,000. Contributions alone total 450,000, so compounding supplies roughly 321,000. Because deposits sit at month-end, an annuity-due factor would overstate the answer by one month of growth on every deposit.

Traps that cost marks

  • Recommending a product before step 3 analysis has been completed.
  • Mixing monthly deposits with an annual compounding rate, or using the nominal rate where an effective rate is required.
  • Averaging annual returns arithmetically when the question asks for compound growth.
  • Confusing Know-Your-Client inputs with Know-Your-Product features.
  • Assuming CPF Ordinary Account balances are fully investable - retention sums apply.