NISM-Series-X-B Investment Adviser Level 2 — Detailed Syllabus

The NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination covers advanced areas of financial planning and investment advice including risk management and insurance planning, retirement planning, taxation, estate planning, behavioural finance and comprehensive investment advice.

The current NISM curriculum is organised into six major modules and 20 chapters.

Module 7 — Risk Management and Insurance Planning

Chapter 1 — Basics of Insurance

• Need for insurance

• Requirements of an insurable risk

• Fundamental principles of insurance

• Utmost good faith

• Insurable interest

• Indemnity

• Benefit insurance

• Subrogation

• Contribution

• Co-pay and deductibles

• Role of insurance in personal finance

• Investing through insurance

• Role of an Insurance Adviser

• Insurance planning process

• Estimating insurance requirements

• Selecting suitable insurance products

• Optimising insurance premiums

• Monitoring insurance coverage

• Health insurance regulations

• ULIP-related considerations

• Regulatory aspects for insurance intermediaries

• Relevant IRDAI requirements

• Relevant SEBI Investment Adviser requirements

Chapter 2 — Life Insurance Products

• Elements of life insurance products

• Life insurance needs analysis

• Estimating life insurance coverage

• Term insurance

• Term insurance with return of premium

• Endowment policies

• Whole-life insurance

• Unit-linked insurance products

• Mortgage insurance

• Loans against insurance policies

• Nomination and change of nomination

• Assignment of policies

• Married Women's Property Act

• Multiple insurance policies

• Group and employer-provided insurance

• Surrendering insurance before maturity

• Evaluation of life insurance products

• Traditional versus unit-linked products

• Online versus offline insurance products

• Pure-term insurance versus investment-linked insurance

• Global coverage considerations

Chapter 3 — Non-Life Insurance Products

• General insurance concepts

• Health insurance

• Motor insurance

• Property insurance

• Personal accident insurance

• Travel insurance

• Other non-life insurance products

• Benefits and limitations of multiple policies

• Comparison of insurance policies

• Evaluation of coverage

• Global coverage considerations

The current NISM test objectives specifically cover insurance principles, life and non-life products, insurance planning and regulatory considerations.

Module 8 — Retirement Planning

Chapter 4 — Retirement Planning Basics

• Need for retirement planning

• Financial goals and retirement

• Retirement planning process

• Retirement income requirements

• Estimating retirement corpus

• Inflation considerations

• Replacement Ratio Method

• Expense Protection Method

• Retirement calculations

• Employee benefits

• Superannuation benefits

• Employer contributions

• Superannuation trusts

• Approved superannuation funds

• Trustee responsibilities

Chapter 5 — Retirement Products

Accumulation Products

• Employees' Provident Fund

• Voluntary Provident Fund

• Public Provident Fund

• Gratuity

• Superannuation benefits

• National Pension System

• Atal Pension Yojana

• Retirement products offered by mutual funds

• Retirement products offered by insurance companies

Distribution Products

• Annuities

• Systematic Withdrawal Plans

• Bond and fixed-deposit laddering

• Senior Citizen Savings Scheme

• PM Vaya Vandana Yojana

• Post Office Monthly Income Scheme

• Reverse Mortgage

Chapter 6 — Miscellaneous Aspects of Retirement Planning

• Role of the Investment Adviser

• Retirement-planning calculations

• Evaluation of retirement products

• Retirement-income planning

• Philanthropy

These retirement-planning areas are included in NISM's current curriculum and test objectives.

Module 9 — Taxation

Chapter 7 — Concepts in Taxation

• Taxation framework

• Key taxation concepts

• Meaning of income

• Residential status

• Scope of income

• Five heads of income

• Clubbing of income

• Set-off and carry-forward of losses

• Exempt income

• Chapter VI-A deductions

• Rebate under Section 87A

• Gross Total Income

• Total Income

• Computation of tax payable

• Double Tax Avoidance Agreement

• Tax regimes

• Maximum Marginal Rate

• Effective tax rate

Chapter 8 — Capital Gains

• Capital assets

• Types of capital assets

• Transfer of capital assets

• Computation of capital gains

• Relevant tax considerations

Chapter 9 — Income from Other Sources

• Dividend income

• Interest on securities

• Gifts of securities

• Other-source income

Chapter 10 — Taxation of Debt Products

• Income from debt products

• Types of debt products

• Mutual funds

• Taxation of non-residents

• Market Linked Debentures

• Specified Mutual Funds

• Tax treatment of debt products

Chapter 11 — Taxation of Equity Products

• Income from equity products

• Listed equity shares

• Unlisted equity shares

• Preference shares

• Share warrants

• Mutual funds

• Derivatives

• Bonus stripping

• Capital-gain exemptions and adjustments

Chapter 12 — Taxation of Other Products

• ESOPs

• Sovereign Gold Bonds

• National Pension System

• REITs

• InvITs

• Alternative Investment Funds

• ETFs

• Life insurance products

• Reverse mortgage

• Other derivative products

Chapter 13 — Tax Provisions for Special Cases

• Bonus shares

• Share split and consolidation

• Buyback of shares

• Rights issues

• Mergers and acquisitions

• Stock lending and borrowing

• Conversion of preference shares into equity

• Segregated portfolios of mutual funds

• Consolidation of mutual-fund schemes

• Winding-up of mutual funds

Important: Tax rates and provisions can change. We deliberately won't publish specific tax-rate figures here unless verified against the latest applicable NISM material.

The current NISM curriculum includes these taxation areas and special-case treatments.

Module 10 — Estate Planning

Chapter 14 — Basics of Estate Planning

• Meaning of estate planning

• Constituents of an estate

• Elements of estate planning

• Applicable laws

• Mutation

• Estate-planning caselets

Chapter 15 — Tools for Estate Planning

• Wills

• Probate

• Gifts

• Joint holding

• Nomination

• Family settlement

• Trusts

• Characteristics and regulations of trusts

• Guardianship

• Power of Attorney

• Estate-planning caselets

NISM's current curriculum identifies estate planning as Module 10 and includes these two chapters.

Module 11 — Behavioural Finance

Chapter 16 — Basics of Behavioural Finance

• Behavioural Finance versus Standard Finance

• Decision-making behaviour

• Bounded rationality

• Prospect theory

• Emotional biases

• Cognitive errors

• Categorisation of biases

• Fusion investing

• Behavioural explanations of market anomalies

• Behavioural explanations of bubbles and crashes

Chapter 17 — Behavioural Finance in Practice

• Role of emotions in goal setting

• Retail therapy and financial behaviour

• Excessive transactions

• Chasing past performance

• Home-country bias

• Insurance purchased primarily for tax-saving

• Excessive diversification

• Highly concentrated portfolios

• Framing and risk tolerance

• Overconfidence

• Behavioural risk management

• Nudging investors toward better behaviour

• Role of the Investment Adviser in managing client emotions

These topics are reflected in NISM's current test objectives.

Module 12 — Comprehensive Investment Advice

Chapter 18 — Risk Profiling for Investors

• Meaning of risk profiling

• Risk-profile parameters

• Risk capacity

• Risk tolerance

• Investor risk profile

• Risk profiling and asset allocation

• Model portfolios

• Application of model portfolios

Chapter 19 — Comparison of Products Across Categories

• Performance data

• Portfolio performance attribution

• Evaluation of investment alternatives

• ELSS versus other tax-saving instruments

• Mutual Funds versus PMS versus AIF

• Mutual Funds versus ULIPs

• Active equity funds versus index funds

• Direct equity versus equity funds

• ETFs versus index funds

• Physical gold versus gold funds versus SGBs versus Gold ETFs

• Real estate versus REITs versus InvITs

• Debt instruments versus debt funds versus bank fixed deposits

• Index futures versus index options versus index funds

• Gold futures versus Gold ETFs

• Company deposits versus debentures

• Market-linked versus non-market-linked retirement products

• Critical illness policy versus critical illness rider

• Personal accident insurance versus life insurance

Chapter 20 — Case Studies in Comprehensive Financial Advice

• Comprehensive financial-planning case studies

• Client financial situations

• Risk profiling

• Asset allocation

• Product comparison

• Goal-based recommendations

• Integrated financial advice

• Application of concepts through caselets

NISM's current curriculum explicitly includes risk profiling, product comparisons and comprehensive financial-advice case studies.