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DOs and DON’Ts for the AF5 CII Exam

DOs and DON’Ts for the AF5 CII Exam

In this article, we look at how to prepare for the CII AF5, the Financial Planning Process advanced paper.

AF5 covers content from both the Diploma and the Advanced Diploma.  Knowledge of protection, investments, pensions and tax and trusts is necessary, and as there is no textbook. All this needs to be studied from the relevant R0 and J0 textbooks.  However, most of the work needs to be done in the two weeks between the fact-find being released and the exam day.

The AF5 format is usually predictable

AF5 follows a fairly formulaic route: candidates will be expected to answer fact-finding questions, make appropriate recommendations with justifications, comment on various aspects of the clients’ current position and explain various technicalities, perhaps for example, on tax or fund choices based on the circumstances outlined in the fact find. Usually, there is a review question too (although, see comments below about the last AF5 paper!).   There is very rarely a calculation within AF5, but despite this, it’s a good idea for candidates to work through income tax, IHT and if relevant, CGT calculations so they have a broad idea of their tax position.

Look for signposts

Once the fact-find has been received, candidates should spend time reading it through very carefully, highlighting anything that appears to be a signpost for a potential question.  It’s helpful to imagine the individuals as real clients, as this can help focus on what their long-term and short-term objectives might be, which aren’t actually revealed until the exam.

For example, in the most recent AF5 paper, we are told on the first page that the clients’ 18-year-old son has taken out a student loan to cover his university tuition fees. We are also told that the parents are going to pay for his accommodation and living costs whilst he is at university.  It is then noted that their daughter is planning to go to university in 2021.  It’s mentioned again a bit later on that they will provide support, and the investment bond they hold was in fact taken out with a view to providing for the children’s university education.    In this paper, it was very well signposted that there would be questions on this area!  Sure enough, Question 6 of this exam was a two-part question: firstly asking candidates to explain how the parents could use their offshore bond to provide tax-efficient funds to support both their children whilst at university (for 10 marks), and in the second part, candidates had to identify the key factors that the parents should consider before deciding if they will provide funds to repay their son’s student loan after he graduates.  The total marks available were 18.

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Research weak areas

Once thought has been given to the type of question that might be asked, candidates should research any areas where their knowledge is lacking.

Some questions are not easily predicted

There may be questions that come up which could not have been predicted easily from the information given.  These are virtually impossible to prepare for but shouldn’t be for many marks and certainly not enough for an overall fail – as long as thorough preparation has been done in the areas which could be prepared.

For example, in the October paper, candidates were asked to explain how ‘pound cost averaging’ from investing regular contributions could be used to help them in their retirement plans. This may have thrown some candidates as they were unlikely to have seen this coming.  What was very unusual about this paper too was that there was no review question.  We will be looking closely at the next exam to see if this was the beginning of a change to the format.

Use past exam guides

As with any of the CII written papers, using past exam guides is very helpful. The same areas are likely to have been tested before, and the model answers are invaluable to see the level of detail needed.  The feedback from the examiner on previous candidates’ performance is also useful, particularly comments on any areas of weakness.

Relate answers to the client

A very important fact to remember is that examiners will be looking to see whether candidates have demonstrated their application of knowledge to the situation given, so candidates must relate their answers to the client; a repetition of technical knowledge will not achieve maximum marks at this level.

The key to success is preparation

At the end of the day, the key to success in the AF5 exam (in any exam!) is preparation. Candidates need to be confident that by the time they reach the exam room, they have analysed, researched and are prepared to answer any question on every possible scenario that the clients have presented.

Grab the resources you need!

If you’re studying for your CII AF5 exam, and you’re wanting to prepare as much as possible, grab our free taster analysis to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the AF5 fact-find analysis taster now!

Click here to download our free taster analysis for CII AF5