The CII’s AF4 is a challenge but success is achievable with preparation – April 2017 Exam Review
Last updated on September 25th, 2019 at 4:30 am
The AF4 exam is always a challenge and, as is the case with all AF exams, the successful student is the one that has put the right amount of preparation work in. In this article, we go through the questions from the April 2017 exam – useful for those preparing to sit CII AF4.
Over the past 4 years, CII figures show that just over 60% of candidates pass, which means it is one of the more impressive pass rates out of the AF subjects. In 2016, the pass rate was 63.37% – just slightly down from 2015, which was 63.88%.
The AF4 exam isn’t always an easy exam to predict, and in the past, it did include a lot of calculations. This does seem to have eased off, so let’s look at the paper in April. If you haven’t seen it, here it is.
Question 1
The first question is the bigger question, with 80 marks on offer. On first glance, it seems a fair one with the main focus on gilts, with smaller mark questions on the use of interest rates stimulating consumer spending. The question was split between 15 theory questions and only 4 calculations to do, which took up only 16 of the marks. This meant that 64 were on offer for knowledge on gilts, sterling options and the very last question on peer to peer lending.
Question 2
Next was a question on shares, and a small table of figures from two companies were given. In this question, 10 marks were awarded for the calculations and 30 marks for theory. Again, it was a fair question: alpha, value investing, price earnings ratio and five marks for explaining the limitations of only using ratio analysis in making investment decisions. A well prepared student should have been pretty happy with this question as it covered topics well tested in the past.
Question 3
Question 3 awarded 12 marks for calculations and 28 for theory. This time, we had expected returns, range of returns, charges, self-selection, the differences in AIM shares and the main market and finally four marks for explaining how technical analysis is used to make investment decisions.
With the #CII #AF4, it is wise to keep up with the current economic climate. Click To Tweet
Topics Well Covered in the J10 Manual
All the topics tested in April are well covered in the J10 manual (Discretionary Investment Management); although, it is also necessary, with this exam, to keep up to date with the current economic climate and how this impacts the different asset classes, as there is usually a question relating to this. For most advisers, this would form part of their normal day so shouldn’t really cause problems.
Comparing to October’s Paper
If we look at how this exam compared with the previous paper – which you can find here.
This paper tested very different areas, but the split between calculations and theory were very similar. Question 1 allocated 13 marks for calculations and 67 for theory. In Question 2, there were 14 marks for calculations, 26 for theory and Question 3 gave 10 marks for calculations, meaning 30 were for theory. The criticism in the past, that AF4 is a maths test, no longer seems the case.
Planning to sit AF4 in October?
Anyone intending to sit October’s exam needs to get a good plan in place to allow plenty of time to give each topic the necessary studying needed. Past papers should be used to study the type of questions being asked as well as the type of calculations that are often tested.
Always keep in mind that with any written paper, answer the question that is specifically being asked – read it several times to make sure you know what is being asked of you. Allocate your time well – where a question has five marks, it’s usually the case that at least five bullet points are needed. You can answer the questions in any order you like; just remember to number them clearly so the examiner knows.
Grab the resources you need!
If you’re studying for your CII AF4 exam, and you’re wanting some extra practice, grab our free taster to try out one of Brand Financial Training’s resources for yourself. Click the link to download the AF4 mock paper taster now!
Over to You…
If you’re planning on sitting AF4 in October, have you set out a study plan?