Reflections on the First Ever Sitting of the CII’s AF7 Pension Transfers Exam

Here’s how one member of our technical team found the first ever sitting of the CII’s AF7 Pension Transfers exam.

UPDATE: We are pleased to report that our team member did indeed pass this exam!

So it was 1.58 pm on Tuesday the 10th October, and I sat anxiously waiting for the clock to pass two more minutes before I could open the first AF7 Pension Transfers exam paper.

With only one ‘exemplar’ guide to go on and with the late (but welcome!) announcement that revaluation and escalation rates would be provided in the exam, it was with some trepidation that I waited for the examiner to say we could start.

Section A

Scanning through the paper quickly, it seemed amazingly lightweight – and by this, I mean the two case studies that form part of this exam didn’t seem that detailed – certainly not what we’re used to with some of the other AF exams.  Even the questions in the first section were short and sweet.

From memory, the four questions that made up Section A covered the following:

• Information that should be in a suitability report and how the FCA expect an insistent client to be dealt with
• How to calculate a CETV
• The potential transfer of an EPP with a guaranteed annuity rate
• The employer’s covenant

Case Studies

We then had two case studies and again, from a frazzled memory, the first couple involved a divorced woman with two children who now lived with her partner, Jo.  Jo was financially secure so she wanted her children to benefit from any death benefits. There were four questions which comprised (I think!) a fact-finding question, the factors we’d need to consider before advising on a transfer, the death benefits available if she did transfer to a SIPP and died before age 75 and limitations of the critical yield.

The second case study was a couple where the husband was over 60, and his wife was almost 20 years younger.  They also had two children.  One of the questions that stood out was 12 marks for stating the pros of him transferring and the cons.  There was also a question on why he couldn’t use the transitional reliefs currently available, a question on stress-testing (as part of a review) and one on the safe withdrawal rate.

If you took the exam and are thinking that what I’ve just described wasn’t exactly how the questions fell, then please forgive me as I may indeed have attributed some of the questions to the wrong case study or indeed the wrong section!  Hopefully though, you can see the range of subjects being covered.  One thing that did stand out for me was there were no calculations as such.

A Pleasant Surprise

The good news is that the exam was a pleasant surprise – and this was backed up by the other students I spoke with afterwards.  In fact, another comment made was a fear they’d misinterpreted the questions correctly as they seemed (compared with AF3) relatively straightforward.

Study the Exemplar Guide

Anyone sitting this exam should study the exemplar guide thoroughly – not so much for the first section (although I am sure these questions will be repeated eventually) but for the two case studies.  There was a review question in Tuesday’s exam, and there was one in the guide, and of course, this exam will always require students to explain the pros and cons of transferring from a DB scheme. The key to success will be in making sure your answer relates exactly to the case study rather than a generic answer prepared at home. It is, after all, an advanced paper and the examiner’s comments on the majority of advanced exams usually include the fact that students do not relate their answers to the case study.

A Fairly Intense Two Hours

All in all, it was a fairly intense two hours of writing, and anyone who has sat a written CII exam knows that it can be quite exhausting (although 2 hours is infinitely better than the 3 hours for other AF exams).  The comment I related to the most was the one from a fellow female candidate who, as she left the room, said to no-one in particular ‘I’d kill for a gin and tonic right now’. I could not have agreed more…

Over to You…

If you sat the AF7 last week, what did you think of it?

Grab the resources you need!

If you’re studying for your CII AF7 exam, and you’re wanting to feel confident on exam day, grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the AF7 mock paper taster now!