Financial Planning Skills Certification Grade 2 study guide
Financial Planning Skills Certification Grade 2 · Work through your exam, one topic at a time.
The Financial Planning Skills Certification Grade 2 is a professional credential for practitioners who advise households on budgeting, insurance, investments, retirement, tax and estate matters. It suits bank relationship managers, insurance advisers, paraplanners and junior financial planners who already know basic product terminology and now need to integrate those products into a coherent plan. The Financial Planning Skills Certification Grade 2 study guide has 9 sections and about 3,175 words.
01Financial Planning Fundamentals and the Advisory Process
This domain tests whether you can run a planning engagement end to end - scope it, collect data, diagnose the gap, recommend, implement and review - and document each stage so the advice is defensible if challenged later. Establish the relationship : agree scope, deliverables, fee or commission basis, and who does what.
363 words, about 2 min02Cash Flow Management and Household Budgeting
This domain tests whether you can convert a household's income statement and balance sheet into diagnosis: is the household saving enough, liquid enough, and over-committed on housing or total debt? Savings rate = savings / gross income; 10–15% is a common working target, higher where retirement starts late.
333 words, about 2 min03Risk Management and Insurance Planning
This domain tests whether you can identify exposures, decide which to retain, reduce, avoid or transfer, and size the transfer correctly - sum insured, deductible and term. Insurable risk is pure (loss or no loss), fortuitous, measurable, and spread across many similar units; speculative risk (market, business) is not insurable.
325 words, about 2 min04Investment Planning and Asset Allocation
This domain tests the construction and defence of a portfolio: the investment policy statement, the strategic allocation, the rebalancing rule, and the evidence that the portfolio matches the client's constraints rather than the adviser's enthusiasm. An IPS records objectives (return target, risk limit), constraints (liquidity, time horizon, tax position, legal and unique circumstances), the permitted asset classes, the rebalancing policy and the review cycle.
345 words, about 2 min05Retirement Planning and Pension Design
This domain tests whether you can project retirement income from all three pillars - statutory, employer and personal - and design or evaluate a pension arrangement that delivers it. Most plans target a replacement ratio of 70–80% of pre-retirement gross income, adjusted for lower commuting and saving costs but higher healthcare.
347 words, about 2 min06Tax Planning and Tax-Efficient Strategies
This domain tests whether you can raise after-tax outcomes without raising risk: the correct use of marginal rates, tax-deferred versus tax-free wrappers, capital gains treatment and loss harvesting. Marginal rate applies to the next unit of income; effective rate is total tax divided by total income.
370 words, about 2 min07Estate Planning and Wealth Transfer
This domain tests whether you can pass assets to the intended people, at the intended time, with the intended control and the least friction - while keeping the estate liquid. Will : directs probate assets, names guardians, but does not govern jointly held property, nominated accounts or trust assets.
361 words, about 2 min08Client Communication, Ethics and Professional Standards
This domain tests conduct under pressure: whether you disclose conflicts before advice is given, keep client information confidential, stay inside your competence, and record what the client actually instructed. A fiduciary acts with loyalty (client interest first), care (the diligence of a competent professional) and disclosure (all material conflicts, in writing, in advance).
360 words, about 2 min09Comprehensive Case Analysis and Plan Integration
This domain tests integration: can you take nine overlapping domains and produce one coherent, funded, prioritised plan whose assumptions are consistent across every module? Solvency and protection : emergency reserve, then insurances that prevent a plan failure from a single event.
371 words, about 2 min