Certified Estate and Trust Specialist™ | The Case Study

Case Study Requirement
All certification programs (CAS®, CFS®, CES™, CTS™ and CIS™) require the completion of a case study. The student is provided with a one-page fact pattern about a hypothetical client who has come to the advisor with questions. The student is given personal and financial information along with a number of client concerns.

The student is expected to answer all client concerns with specific suggestions and reasons for such recommendations. For example, a client question might be whether or not the portfolio should have more fixed income. The student’s response might be that bond exposure should be increased and the reasons a 45% weighting is being recommended are:

1. bonds can greatly reduce portfolio risk—over the past 80+ years, there have only been a few times when bonds and stocks both posted negative returns the same year;
2. even in a very bad year, high-quality bonds rarely experience a total loss of more than 6-7% (vs. a 20-50% loss potential for stocks) and
3. intermediate-term high-quality bonds often offer the best risk-adjusted returns—about half the risk of their long-term counterparts but with 80-90% of the upside.

The student may make assumptions about the client’s situation provided they are identified as such. For example, the fact pattern may not include the client’s tax bracket. The student could respond by stating that based on the person’s annual income (or holdings), a 30% state and federal tax bracket is assumed.

The student’s response to the case study should be 2-5 word-processed pages. The response must be original (i.e., no “canned” financial planning software). The overall grade is divided into three parts: issue spotting (40%), suggestions and solutions (40%) and presentation (20%).

IBF is the only certification body that requires a written case study. The Institute believes writing and analytical skills are essential for the following reasons:

1. a client letter or financial plan with spelling errors results in the reader being less confident in your recommendations;
2. if the document has poor punctuation (e.g., a single paragraph that rambles on and is extremely lengthy), the client may lose interest or become confused;
3. recommendations without supporting neutral data come across as being “too sales oriented,” making the client think you are a salesperson and not an advisor;
4. a lack of headings, subheadings and/or tables makes the document more difficult to follow and less appealing to read—no one likes to read even a single page of text without some visual break and
5. the client may not think you are intelligent or that you do not care—information that includes typos, no rationale and no overall appeal means little thought or care went into the presentation.