CFP vs CWM Differences
CFP exam, organized by the Certified Financial Planner Board of Standards Inc. (CFP Board), USA focusses on curriculum that prepares candidates for Estate Planning, Risk Management, Retirement Planning and Financial Management roles. Whereas, CWM exam is conducted by American Academy of Financial Management (AAFM), USA and prepares students for roles like Wealth Manager, Asset Manager, Market Analyst and Financial Controller.
We will discuss the following in this article –
- CFP vs CWM Infographics
- What is a Certified Financial Planner (CFP)?
- What is Chartered Wealth Manager (CWM)?
- CFP vs CWM Exam Requirements
- Why pursue CFP?
- Why pursue CWM?
CFP vs CWM Infographics
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Let’s understand the difference between these two streams with the help of this CFP vs CWM Infographics.
CFP vs CWM – Comparative Table
|Certification Organized By||The exams are organized by the Certified Financial Planner Board of Standards Inc. (CFP Board), USA||The exams are conducted by the American Academy of Financial Management (AAFM), USA|
|Pattern||It is a single level course for which one needs to write two 3-hour exams in one day.||The course is divided into 2 levels
• Level 1 - Foundation level
• Level 2 - Advanced level
|Duration of course||A candidate can complete the course in a span of 3 years.||A candidate has to clear both levels within 3 years.|
|Syllabus||The core curriculum includes|
• General Principles of Financial Planning
• Professional Conduct & Regulation
• Risk Management & Insurance Planning
• Education Planning
• Tax Planning
• Retirement Savings & Income Planning
• Investment Planning
• Estate Planning
|Some of the course topics are
• Global Financial System
• Investment Vehicles of Wealth Management
• Managing Investment Risk
• Wealth Management in Banking
• Intergenerational Wealth Transfer
• Equity Analysis
• Alternative Products in Wealth Management
• Behavioural Finance in Wealth Management
• Real Estate Valuation and Analysis
• Portfolio Management Strategies
|Exam fees||Registration fees vary as follows: |
• $825 (6 weeks before the registration deadline)
• $925 (Standard registration)
• $1,025 (2 weeks before the registration deadline)
|The cost can be broken down into
• Registration fees: $400 (valid for 1 year)
• Level 1 exam fees: $200
• Level 2 exam fees: $600
• Re-exam fees: $200
• Certification fees: $100
|Jobs||As of 2019-end, there are more than 86k CFP® professionals and in the US 1 out of every 5 financial advisors is a CFP. Some of the common profiles include|
• Estate Planner
• Risk Manager
• Retirement Planner
• Financial Manager
|There are more than 50k members across 100 countries. Some of the common profiles include
• Wealth Manager
• Asset Manager
• Market Analyst
• Financial Controller
|Difficulty||The difficulty level is moderate. During 2019, the overall pass rate was 62%, while that for the first-timers was even higher at 66%.||The passing criterion is 50% in the exams. However, the success rate of the candidates is not available in the public domain.|
|Exam date||Upcoming exam schedule|
• Mar 09-16, 2021 (Registration opens from Nov 12, 2020)
• Jul 06-13, 2021 (Registration opens from Mar 18, 2021)
• Nov 02-09, 2021 (Registration opens from Jul 15, 2021)
|A candidate can schedule an exam for only the 10th and 20th of every month.|
What is a Certified Financial Planner (CFP)?
This course gives you a mark or a professional certification of a financial planner. The course is conferred by the Certified Planner Board of Standards or the CFP board based in the USA. This course is available at 25 other organizations that are affiliated with this board. Organizations based outside the USA are marked as the international owners of CFP.
To be authorized to use this designation, the candidate needs to pay a continuous certification fee along with meeting the course’s education criteria, appearing for the exam, experience in financial planning, and of course, following its ethical standards by following its code of ethics. Both the USA and the UK have different specifications to acquire this certificate.
What is Chartered Wealth Manager (CWM)?
CWM certification is given by AAFM, the American Academy of Financial Management based in the USA. This certified council also grants other certificates. This course’s main focus is concentrating on the theory of the capital and the financial market, on the principles of financial service organizations, investment and portfolio management, and other financial market knowledge addition to the profession.
The completion of CWM is an assurance that you will be able to appropriately perform the following financial management jobs.
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- Measuring the value of all listed companies
- Perform analyses of financial estate
- Understand the time horizon of portfolio management
- Balance the returns and risks appropriately.
- Look and identify market opportunities.
- Handle and manage market products
- Handles asset allocations
- Manage clients and their requirements
CFP and CWM exam requirements
To clear CFP, the candidate needs to meet the following examination requirements.
- The candidate needs to clear an examination that is spread over 2 days for about 10 hours under which he has to solve a zillion of questions with multiple choices. This exam definitely cannot be taken lightly.
- The examination is held in different set locations three times a year: March, July, and November.
- The examination fee needs to be paid to appear for this exam. It is also important to know that if you cannot study by yourself or if you have an issue understanding the subjects, you must take assistance.
To clear the CWM examination, you require accomplishing the following expectations of the course.
- You need to clear level I and level II examination. The enrolment of this examination is done on the AAFM website.
- A certain fee is applicable to register for this examination.
- To be eligible for this examination, you need to have 3-year valid experience in the same field.
- Eligibility criteria also include a graduation degree in economics, taxation, and wealth management.
Why pursue CFP?
If you are good at client management, especially good at financial planning for your clients by managing their money, their investments, etc., you must pursue CFP to add value to your talent and your knowledge. You can work on individual clients amongst the organization and handle their long term and short term goals. With the help of your CFP knowledge, you can guide your clients on estate planning. Legal restrictions, financial laws, investment planning, tax planning, and insurance benefits, etc.
CFP gives you the ability to understand the client’s business to offer a complete financial solution. The moral responsibilities of a CFP are preparing to interview the client about his finances, income, and outgoing of his money, prepare a financial plan accordingly, execute the plan and monitor the outcome of the plan.
You can work as a self-employed, or work in an organization as a financial advisor. These organizations can be an insurance company, a bank, a mutual fund company, or an AMC.
Why pursue CWM?
If you are working as a portfolio and asset manager, or wealth manager, or corporate account manager, broker, and market analysts, etc., this degree that is the CWM will boost your career by adding value to your resume.
On completion of CWM, you can ensure you will be capable of assessing the value of all listed companies, perform as a financial estate analyst, understand the time horizon of portfolio management, balance the risks and returns of the assets, identify the opportunities of the market, understand market products, handle the allocation of assets and of course manage clients.
You can continue to work in the same company or switch jobs. After completion of CWM, you can also start up your own business. CWM gives the complete potential to your skills and knowledge.