Shariah RFP Capstone Programme (Module 7) - Shariah Financial Planning
What this domain tests
Module 7 tests whether you can run the full financial planning process - establish and define, gather data, analyse, recommend, implement, review - inside a Shariah filter. You must translate client goals into halal structures, quantify zakat and purification, and coordinate takaful, investments and estate distribution without breaching the prohibitions on riba (interest), gharar (excessive uncertainty) and maysir (gambling). The fact-find must capture Shariah constraints explicitly, and every recommendation needs a documented Shariah rationale, not just a financial one.
Core rules
- Two-stage screening. First the business activity screen (no alcohol, gambling, conventional finance, adult content, pork); then financial ratios. State the standard you apply because AAOIFI and index providers differ. Common thresholds: interest-bearing debt to total assets below 30–33%, and non-compliant income below 5% of total revenue.
- Purification. Donate the non-compliant income portion of dividends. Purification is not zakat; it cleanses the holding.
- Zakat. 2.5% on zakatable assets held one lunar year (hawl) above nisab (85g gold or 595g silver). For trading shares use market value; for long-term investment shares use the underlying zakatable assets per share.
- Contracts. Murabaha (cost-plus sale), ijarah (lease), mudarabah and musharakah (profit-sharing), wakalah (agency), takaful (mutual protection funded by tabarru' contributions).
- Estate. Faraid fixed shares apply; wasiyyah is capped at one-third and cannot benefit an heir; waqf provides perpetual charity.
Worked example
A client holds 1,000 shares in a mixed-activity company as a long-term investment. Dividend is RM0.20 per share, non-compliant income is 4% of revenue, and zakatable assets per share are RM1.50.
- Purification = 1,000 × 0.20 × 4% = RM8.
- Zakat = 1,000 × 1.50 × 2.5% = RM37.50, assuming nisab and hawl are met.
- If the shares were held for trading, substitute market value for RM1.50.
Traps that cost marks
Confusing zakat with purification; quoting one screening threshold as universal; using market value for investment shares; ignoring takaful surplus and claim treatment; letting a wasiyyah exceed one-third or favour an heir. Always show the formula, the standard used and the assumption behind each figure.