Important announcement for modifications of calculations in Retirement Planning CFP

Posted by Prashant Shah on September 21, 2012 It seems that the difference between the exam of Retirement Planning and Advanced Financial Planning is getting narrowed. Below are the changes to be considered for RPEB exam now onwards. And all the questions which I have solved on this site are to be modified based on the following guidelines: 1 1.1 Use of BGN mode under the following Scenario. Finding out present value of the cash flow series (i.e, Annuity) 1. In all questions like calculation of retirement corpus, accumulation of funding for retirement corpus. 2. In case of insurance planning, where we have to find out Insurance cover needed using Human Life Value, Need based approach. 3. In all numerical in like e.g. funding for education planning, marriage planning etc.. 1.2 Finding out regular investment 1. In all case where we have to find out regular investment (i.e. Pmt) for achieving the desired future value. 2. For that matter any numerical in any other case, education planning etc Note: The above mentioned scenarios will be applicable even in the case, where question is silent on which mode to use. Use of Effective rate of return for Monthly, quarterly, half yearly mode. It is considered that the given rate of return (Annually) in the question is an effective rate of annual return so accordingly all calculation of monthly, quarterly & half yearly mode to be done based on effective annual rate basis. We will convert the effective rate of return into Nominal rate of Return. Loan related calculation: In this case we take the end mode for EMI calculation. We use the nominal rate of return divided by 12 to arrive at the rate for calculation. This is because loan rates are conveyed in nominal form.
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Related Retirement Planning Practice Questions - 3, CFP In "CFP" Retirement Planning Practice Questions - 2, CFP In "Practice Question" Financial Planning Practice Standards In "CFP" This entry was posted on September 21, 2012 at 5:13 pm and is filed under Retirement Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to Important announcement for modifications of calculations in Retirement Planning CFP

1.

chetan said
September 21, 2012 at 8:14 pm

there is no notification in fbsbindias website.how can it be confirmed.. Reply

Prashant Shah said

September 22, 2012 at 10:21 am

Dear Chetan, I was absolutely afraid when I posted it. The fact is FPSB has not communicated anything officially but after consulting many people who are associated with CFP coaching and publication, I can clarify that we will have to modify the calculation of many questions of RPEB. And I am also waiting for the official notification from FPSB. Regards, Prashant V Shah. Reply

Manish said
September 22, 2012 at 11:03 am

Dear chetan prashant sir was right even I m getting the same information from my education providers facultys though there is no notification regarding this but it might assumed to consider this changes from now onwards. 2.

kumar nirmal prasad said

November 12, 2012 at 8:41 pm

Dear Prashant Sir, Are all the practice sets of RPEB upadated as per New guidlines? Reply