Our Post-Exam Review of the February 2025 CII AF5 Exam
Our Post-Exam Review of the February 2025 CII AF5 Exam
The CII has now released the exam guide for the February sitting of AF5 so we can see how we did in our pre-exam analysis.
This article is correct as at 22 April 2025.
If you haven’t already seen the exam guide for February, you can access it here.*
This time, the fact-find, released two weeks prior to the exam, concerned Martin and Sylvia.
The objectives, given on exam day, were as follows:
Immediate objectives
- Ensure sufficient income is in place following Sylvia’s recent retirement.
- Put in place a suitable investment strategy for their current and inherited funds.
- Assess the merits of retaining the inherited property as a rental property.
Longer-term objectives
- Provide a sustainable income throughout retirement.
- Ensure Sylvia is protected in the event of Martin’s death.
- Improve the tax efficiency of their financial arrangements.
| 1. | (a) Identify the additional information that you would require in order to advise Martin and Sylvia on the suitability of their current financial arrangements to meet their retirement objectives. | A nice start to the exam! A fairly general fact-finding question—worth a good number of marks—focusing on the suitability of the client’s current financial arrangements. We hope candidates were able to pick up the full 14 marks on offer here. |
| (b) Identify a range of suitable actions that could be taken to improve Sylvia’s long-term financial security in the event of Martin’s death. | Whilst we hadn’t worded any of our protection questions specifically around Martin’s death, we had covered many of the key points required to answer this question across our analysis. | |
| 2. | (a) Explain to Sylvia how the ‘small pots’ pension rules would enable her to generate tax-efficient benefits before her State Pension comes into payment. | We had anticipated that small pots payments might be examined and provided a technical note on the subject, which could have been used to answer this question in full. |
| (b) Recommend and justify to Sylvia why she may wish to consider making further pension contributions. | The benefit of continuing to make pension contributions was covered in our analysis. We had focused on maintaining contributions in retirement, so we hope candidates were able to adapt their answers to Sylvia making contributions in the current tax year to pick up full marks. | |
| 3. | (a) Recommend and justify how Martin could set up a lifetime annuity with his defined contribution pension plan to support their long-term objectives. | The benefits of purchasing a lifetime annuity over drawdown were covered in our self-test questions, giving candidates the opportunity to practise answering a very similar question. |
| (b) Outline to Martin the factors that he should consider if he decides to draw the benefits from his defined contribution pension plan using flexi-access drawdown. | The factors around using flexi-access drawdown were covered in full within the analysis. This was a straightforward question for AF5 and we hope candidates were able to score well. | |
| 4. | (a) Explain the key drawbacks for Martin and Sylvia of retaining the inherited property and renting it out to provide additional income in retirement. | We had covered model answers for the question regarding the advantages of using other investments, rather than retaining the inherited property, which could have been used to answer this question. |
| (b) State the reasons why Martin and Sylvia should consider setting up an investment portfolio using the proceeds of the cash inheritance from Martin’s mother. | Again, a fairly straightforward question. Our analysis has covered investing the inheritance in equities and fixed interest and using the tax allowances. It seems there were an extra couple of marks on offer to highlight why it should be moved out of cash; we hope candidates were able to apply their knowledge of the FSCS and risks of too much in cash to pick up full marks here. | |
| 5. | (a) Explain to Martin and Sylvia the benefits of using a Discretionary Fund Manager (DFM) to manage their investment portfolio. | We were told that Sylvia and Martin were keen to explore a more diversified investment strategy, so we anticipated a question around the use of a DFM and multi-asset funds, which we had covered in our analysis. |
| (b) Recommend and justify why Martin and Sylvia might consider using Multi-Asset funds to invest some of their cash holdings which are due to mature shortly. | Additionally, we had highlighted several times in the analysis the need to move some of their deposit holdings. Therefore, full model answers were provided. | |
| 6. | (a) Explain to Martin and Sylvia why their current Lasting Powers of Attorney (LPA) may be unsuitable and identify the actions that they should take to ensure that their LPAs are suitable for them. | This question centered on the issues related to being sole attorneys. We had covered LPAs and the issues surrounding sole attorneys in full in our analysis. We hope candidates were able to apply the actions to ensure suitability, based on the revision notes we provided on LPAs. |
| (b) Identify the key strengths and weaknesses of Martin’s defined benefit pension scheme in respect of their overall retirement planning objectives. | We hadn’t anticipated a question directly related to the DB scheme in this regard as it was already in payment, however the question itself was quite straightforward, so we hope candidates were able to pick up good marks. | |
| 7. | (a) Martin and Sylvia are considering encashing their Whole of Life policy following notification of the increase to the monthly premium. State the key factors that Martin and Sylvia should consider when deciding whether to encash or retain their Whole of Life policy. | Assessing the need for the Whole of Life policy, given the premium increase, was clearly signposted in the fact-find. We have covered this exact question in our analysis. |
| (b) Explain briefly to Martin and Sylvia how their estate will be treated for Inheritance Tax purposes on second death. No calculations are required. | While we had not covered this specific question in our analysis, some of the key points were addressed when assessing the need for the couple to have a Will. | |
| 8. | (a) Identify the reasons why Martin and Sylvia’s capacity for loss may reduce now they are both retired. | A question on attitude to risk and capacity for loss (CFL) is often examined. We provided a generic answer from which to work. We hope candidates were able to adapt this to Martin and Sylvia’s financial situation and the specific question regarding why the CFL may be reduced. |
| (b) State the reasons why it would be appropriate to carry out additional review meetings with Martin and Sylvia over the next few years. | We had covered a review question which could have been adapted to pick up the majority of marks on offer here. | |
Chartered Insurance Institute (2025). AF5 – Financial planning process: February 2025 Examination Guide. Retrieved from www.cii.co.uk.
A Post-Exam Review of the February 2025 #CII #AF5 Exam. Share on X
This exam included some straightforward questions alongside trickier ones that required significant tailoring to the client’s individual circumstances. There was nothing too technical; it was certainly a paper where exam technique was key. Well-prepared candidates who had used our analysis and practised answering AF5 questions repeatedly would likely have done well.
Grab the resources you need!
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!
* The CII has updated their retention policy and now only provides the last two exam papers. Older papers referenced in this article may no longer be available on the CII website.
