[ChFC] Chartered Financial Consultant Exam

1. Financial Planning: Process and Environment

This foundational domain covers the regulatory environment and the systematic approach to client engagement.

The Financial Planning Process

Establishing and defining the client-planner relationship

Gathering client data and determining goals/expectations

Analyzing and evaluating the client's financial status

Developing and presenting financial planning recommendations

Implementing and monitoring the financial planning recommendations

The Financial Services Environment

Economic concepts (GDP, inflation, monetary/fiscal policy)

Legal environment and financial institutions

Consumer protection laws and worker’s compensation

Practice Standards and Ethics

The American College Code of Ethics

Fiduciary duties and professional responsibility

Regulatory compliance (SEC, FINRA, and state insurance boards)

2. Fundamentals of Insurance Planning

Focuses on analyzing and managing personal and business risks through various insurance vehicles.

Risk Management Principles

Identification and measurement of risk

Risk control vs. risk financing

Life Insurance

Analysis of policy types (Term, Whole Life, Universal, Variable)

Policy provisions, options, and riders

Life insurance for business needs (Buy-Sell agreements, Key Person)

Health and Disability Insurance

Medical expense insurance and managed care

Disability income insurance (Definition of disability, benefit periods)

Long-term care (LTC) insurance and financing

Property and Liability Insurance

Homeowners and auto insurance policy structures

Personal umbrella liability policies

3. Fundamentals of Income Taxation

Detailed study of federal income tax laws as they apply to individuals and business entities.

Individual Income Tax

Gross income and exclusions

Deductions for and from Adjusted Gross Income (AGI)

Tax credits and the Alternative Minimum Tax (AMT)

Taxation of Property Transactions

Capital gains and losses

Cost recovery (depreciation) and Section 1231 assets

Business and Passive Activity Taxation

Passive activity loss rules

Taxation of sole proprietorships, partnerships, S-Corps, and C-Corps

4. Planning for Retirement Needs

Explores the strategies for accumulating and distributing assets for a secure retirement.

Qualified Corporate Plans

Defined benefit vs. defined contribution plans

401(k), Profit Sharing, and Money Purchase plans

Regulatory requirements (ERISA, vesting, and participation)

Other Tax-Advantaged Plans

SEP, SIMPLE, and 403(b) plans

Individual Retirement Accounts (Traditional vs. Roth IRAs)

Retirement Distribution Strategies

Required Minimum Distributions (RMDs)

Social Security integration and optimization

Post-retirement health care planning (Medicare)

5. Investments

An in-depth look at asset classes, portfolio theory, and market mechanics.

Investment Vehicles

Common and preferred stocks

Fixed-income securities (Government, Corporate, Municipal bonds)

Derivatives, options, and alternative investments

Portfolio Theory and Management

Modern Portfolio Theory (MPT) and the Capital Asset Pricing Model (CAPM)

Asset allocation and diversification strategies

Performance measurement (Sharpe, Treynor, and Jensen ratios)

Valuation and Market Analysis

Fundamental vs. technical analysis

Efficient Market Hypothesis (EMH)

6. Fundamentals of Estate Planning

Covers the orderly and tax-efficient transfer of wealth during life and at death.

Estate Transfer Process

Wills, trusts, and probate avoidance

Powers of attorney and healthcare directives

Federal Estate and Gift Taxation

The unified credit and gross estate calculations

Marital and charitable deductions

Advanced Estate Techniques

Irrevocable Life Insurance Trusts (ILITs)

Grantor Retained Annuity Trusts (GRATs) and Charitable Remainder Trusts (CRTs)

7. Personal Financial Planning: Comprehensive Case Analysis

This domain requires the integration of all previous knowledge into a holistic financial plan.

Data Synthesis

Interpreting complex client financial statements

Identifying conflicting goals and prioritizing needs

Plan Construction

Developing cross-disciplinary strategies (e.g., tax-efficient retirement withdrawals)

Communication skills for presenting the plan to clients

8. Contemporary Applications in Financial Planning

Distinguishes the ChFC® from other designations by focusing on specialized and modern planning scenarios.

Special Needs Planning

Government benefits (SSI/Medicaid) and Special Needs Trusts

Small Business Planning

Business succession and exit strategies

Divorce Planning

Asset division, alimony, and child support tax implications

Behavioral Finance

Cognitive biases and emotional factors in financial decision-making

Planning for Non-Traditional Families

Unique legal and financial challenges for cohabitating couples and LGBTQ+ families