Financial Planning Process and Regulatory Environment
What CF6 tests
This domain examines the adviser's ability to run a disciplined financial planning relationship and to work within Nigeria's regulatory perimeter. Expect questions on the six-step process, suitability, disclosure, record-keeping and which regulator supervises which activity.
Core rules
- Establish and define the relationship: scope, fees, responsibilities and conflicts.
- Gather qualitative and quantitative data, including goals, cash flow, risk attitude and existing policies.
- Analyse and evaluate the client's position; test assumptions.
- Develop and present a written plan with alternatives.
- Implement agreed actions only with authority.
- Monitor, review and update.
Regulators include NAICOM (insurance), PenCom (pensions), SEC (investments and securities), CBN (banks and payments), FIRS (tax) and the Nigeria Data Protection Commission under the NDPA 2023. Advisers must know licensing limits, KYC and AML duties, complaints channels and confidentiality rules.
Worked example
A 45-year-old teacher wants to retire at 60. The adviser documents objectives, income, pension contributions and a mortgage, then checks that any recommended insurer is NAICOM-licensed and any PFA is PenCom-licensed. The plan compares increasing voluntary pension contributions with repaying expensive debt. The adviser records the rationale, implements the chosen action and sets an annual review. Reasoning: the recommendation follows the client's cash flow and risk capacity, not product commission.
Traps
Treating the process as a one-off product sale; skipping monitoring; advising on products outside licence; failing to document conflicts; assuming one regulator covers all products.