How to Answer Factors-Type Questions on your CII AF Exam

With some of the CII’s advanced papers, we have noticed that a particular style of question often appears, where candidates need to identify and explain relevant ‘factors’. Here, you will learn how best to approach this sort of question as you prepare for your exam.

In the AF1 October exam, this question appeared:  ‘State the factors specific to Brian and Clare that an adviser would need to take into account before considering an investment in a joint life discounted gift trust’.  We haven’t seen the exam guide for this paper yet, but if we look at the case study, we can see that the husband is in poor health – which would affect the discount, they wish to help their grandchildren with university costs and they have an IHT liability. All of these things would need to be referred to in the answer as statements of fact.

Generic lists gain no marks

Also, we noticed the examiner’s comments from the exam guide for the October 2017 sitting of the AF7 exam, in particular for the question where again candidates had to identify and explain ‘factors’ that had been given in the case study that were relevant to the pension transfer advice.  The question was: ‘Based on the information provided in the case study, explain the factors that an adviser should consider before making a recommendation on the potential transfer of Lizzie’s DB pension scheme’.  The examiner comments that many of the candidates wrote a list of generic terms of information that would be needed – and these gained no marks.  To gain good marks, candidates needed to consider information given in the case study and pick out relevant elements.  In the model answer, we can see what was expected, for example:

• She has a low to medium ATR
• She has limited investment experience
• She wants to pass on assets to her children

Analyse the case study and pick out key points

If we look at the April 2018 paper, the ‘factors’ question was: ‘Outline the factors that you would consider when advising (David) whether he should transfer some or all of his deferred benefits in order to meet his objectives’.  Again, the case study needed to be analysed and the key points picked out such as:

• David would prefer some of his income to be guaranteed
• He also wants to have flexibility to take ad hoc lump sums
• Francisco Ltd allows partial transfers
• Bertram Ltd allows benefits to be taken from age 60 without penalty
• David will get his State pension at age 66

To get the maximum marks on offer, all candidates had to do was pick out the relevant information (i.e. the factors) from the information given and refer to it in their answers and not simply list a generic list of information.  Analysis of information is standard testing of AF subjects, so future students should ensure they practise this type of exam question and study the model answers to ensure they are answering it in the correct way.

Grab the resources you need!

If you’re studying for your CII AF1 exam, and you’re wanting to feel confident on exam day, you’ll need to prepare as much as possible. Grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the AF1 calculation workbook taster now!

Alternatively, you can download the taster for AF2, AF4, AF5 or AF7 if any of those exams are causing you some worry.