The CII AF7 Exam in Focus – Part 1

Here, we’re looking at the topics and questions which have come up in the CII’s AF7 exam over the years and how to address them.

It’s fair to say there have been some absolute crackers over the years, as well as some recurring themes. In this two-part series of AF7 articles, we look to shine the spotlight on the content the exam is likely to cover, as well as provide some tips to address them.

To get the maximum benefit from a review of the AF7 exam, we need to understand the way the assessment is structured and what it is looking to cover.

The AF7 exam consists of two sections. In this week’s article, we will look at the first section which involves (usually) four narrative questions, which will nearly always test your general knowledge on defined benefit pension matters.

Interestingly, Question 1 has almost always turned out to be a regulatory/process question, covering the FCA’s expectations or the process that must be followed when giving advice. Over recent papers, themes that have been covered include:

• The introduction of the abridged advice process
• The rules which must be followed when two separate advisers work together on a case
• The FCA’s expectations when advising vulnerable customers
• Why advice must be provided and the process for evidencing that it has been taken
• Triage services

With an average of seven or eight marks per question, it is always worth candidates having an awareness of regulatory expectations. If nothing else, you are going to have to use them in the day job once you pass, if you are not involved in the process already.

The rest of the questions have proved an eclectic mix over the years. Section A can total anything between 30 and 34 marks, and regular themes have included:

• The PPF and scheme security/employer covenants
• Death benefits from the various scheme types
• Calculation of a CETV/TVC and factors which may impact the values
• Cashflow modelling and sustainable withdrawal rates
• Attitude to risk and capacity for loss
• Lifetime allowance and protections

One thing you can guarantee is that there will be at least one or two ‘curveball’ questions in each paper. We have found that around 60% of the questions seem to come from a regular bank of areas/material, with a further 20-30% coming from areas that a pension transfer specialist ought to have a decent knowledge of. However, there are typically 10-20 marks that will come from some left-field area of the syllabus which arises once in a blue moon.

Recent examples have included:

• The public sector transfer club
• Guaranteed annuity rates
• Ill health early retirement

The trick is to not be worried by this. With these types of questions, if you know the answer, then great. If not, then don’t waste time overthinking or worrying about it. Move onto the staple questions where easier marks are available. The CII’s own Exam Guide states that the questions do not have to be answered in order, so take their advice. Something might come to you whilst you are working on easier questions and if not, then at least you are less likely to run out of time.

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!

Information in this article is correct as at 11 March 2022.