The CII J11 April 2019 Exam in Review

The J11 exam (wrap and platform services) is the next exam paper from the April sitting to have a look at in our analysis of past papers. Planning to sit the next J11 exam? This will help you.

Two hours are allowed for this paper, which is made up of short-answer questions and two essay questions, carrying a total of 110 marks; Section A has 50 marks, and Section B has 60 marks.

As students will be aware, this unit is being withdrawn in April 2020, so anyone wishing to take the unit only has two opportunities left: October 2019 and April 2020.

The exam guide from April 2019 can be found here.

Section A

The first section had 6 questions in it:

Question 1 asked for 10 benefits to a firm of incorporating a platform into its overall proposition. This should have been a nice start to the exam for most candidates.

Question 2 asked for a brief description of the custody services undertaken by a platform’s custodian (for 8 marks).

Question 3 asked candidates to state the main legal and regulatory safeguards that would help protect client assets (for 10 marks).

Question 4 asked for 8 of the main due diligence factors that a firm would focus upon that relate to a technology provider.

Question 5 was a product-specific question and asked for the main rules governing the contributions to and withdrawals from a LISA.  This was for 9 marks.

Finally, Question 6 in Section A asked for five main areas of the auto-enrolment process where a platform could help meet a company’s workplace pension obligations.

Overall, Section A seemed well balanced and fair and should not have caused too many problems to the well-prepared candidate.

Section B

Onto Section B, and the first case study introduced a client with a portfolio of collective funds invested in different asset classes, which were not held on a platform.   There were 3 questions for a total of 30 marks:

• Describe the main platform features that the adviser would need to consider when assessing the suitability of a platform to meet the client’s needs.
• List the factors relevant to the client’s needs that the adviser would consider when constructing an asset allocation to generate the required income.
• State the main risks to the adviser and the client from the use of the platform’s income tool.

Case Study 2 introduced us to a higher rate taxpaying client about to invest in a new portfolio using a platform.  The portfolio will be made up of equity and fixed interest collectives held within a stocks and shares ISA, a general investment account and an onshore investment bond.  Recommendations have been made by a new IFA.

The questions, for a further 30 marks, were:

• Describe the various income and withdrawal options that would be available to the client from the three wrappers on the platform and their tax treatment based on the client’s tax status.
• State the ongoing fund charges that could be paid within the investments.
• Explain the main ways in which the client can pay his new IFA, including how each operates.

Overall Section B also seemed like a fair test of J11 knowledge.

Comparison with the October 2018 Paper

In October 2018, the following areas were tested:

• The main challenges faced by a platform of launching a D2C proposition
• The actions a platform should take to facilitate compliance with MiFID II when administering discretionary managed portfolios
• The role of a platform software developer
• The role of a platform delivery provider
• The key elements of client money processing activities a platform must undertake and key risks to a client if not followed
• Benefits to an adviser/client of adviser charging being facilitated through a platform
• Benefits and drawbacks to an IFA firm of using a single platform for all of its clients
• Main areas of due diligence the firm would perform on potential platforms
• Main benefits to the firm of using a platform to conduct annual reviews
• Tax implications of a client taking a withdrawal via UFPLS
• Considerations of an IFA when selecting a third party DIM
• Benefits and drawbacks of DIM offering a rebalancing service on a platform
• Benefits to the IFA of outsourcing client’s investments to DIM for use on a platform

The annual pass rate for the J11 exam in 2018 was 50%, up from 46.94% in 2017. This is the lowest pass rate for the J0 units that are exam-based (rather than the J09 coursework module, which has a lower pass rate of just 48%).

As mentioned earlier, there are only two more sittings of the J11 exam, so anyone thinking of taking the exam to complete their Diploma should prepare a study plan, which covers all the learning outcomes.  They should also, as part of their structured study plan, revise from recent past exam papers to give themselves the best chance of success.

Grab the resources you need!

If you’re studying for your CII J11 exam, and you’re concerned about the outcome, grab our free taster to try out one of Brand Financial Training’s mock exam papers for yourself.  Click the link to download the J11 mock exam taster now!