The CII J11 October 2018 Exam in Review

The J11 exam (wrap and platform services) is the next exam paper 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 2 essay questions carrying a total of 110 marks; Section A has 50 marks and Section B has 60 marks.

If you haven’t seen it, you can find it here.

Section A

The exam started off well with a 9-mark question on the main challenges faced by a platform of launching a D2C proposition.

It continued with the actions a platform should take to facilitate compliance with MiFID II when administering discretionary managed portfolios.

We then had a two-part question each offering five marks. For the first five, candidates had to describe the role of a platform software developer, and for the other five, they had to describe the role of a platform delivery provider.  Both should not have been a problem for a well-prepared candidate.

Section A continued with another two-part question. The first part tested the key elements of client money processing activities that a platform must undertake, and part (b) covered the potential risks to a client if the processing activities, identified in the first part of the question, are not followed.

The last two questions in Section A were both for 8 marks –  the benefits to an adviser and their clients of adviser charging being facilitated through a platform and finally the benefits and drawbacks to an IFA firm of using a single platform for all of its clients.

This seemed like a fair Section A.

Section B

Question 7 is for a total of 30 marks.  The case study tells us an authorised firm has bought the client bank of a sole trader and is now looking to migrate them onto a new platform, as well as build an advice proposition around their needs focused on annual reviews.  The first question asks for the main areas of due diligence the firm would perform on potential platforms.  Secondly, candidates had to state the main benefits to the firm of using a platform to conduct annual reviews, and lastly, a description was needed of the tax implications of one of the clients taking a withdrawal via UFPLS.

Question 8 is also for 30 marks and involved an IFA wanting to add a DIM service to its proposition.  The first question asked for 12 considerations an IFA should take into account when selecting a third party DIM service.  Candidates then had to state the benefits and drawbacks to the firm of the DIM offering a re-balancing service to the client group on a platform and finally, the benefits to the IFA of outsourcing the client’s group investments to a DIM for use on a platform.

Comparing with the April 2018 Paper

If we compare this to the areas that were tested in April 2018 we can see the following was covered:

• Benefits to a client of using a D2C platform for investment planning
• Differences between legal and beneficial ownership of assets held on a platform
• Main stages of the re-registration process of an existing portfolio and the additional stages for any assets that cannot be transferred in specie
• Differences between retail and institutional share classes
• Main risks to a retail client of holding collectives on a platform
• Platform features of use to employees of a PLC in respect of their investment needs
• Due diligence that a firm would perform on potential new platform providers
• Main factors that a firm should consider at business level when matching its choice of platform provider with the needs of its clients
• Main areas of functionality for a platform’s cash account
• Main risks to advisers and clients of a major upgrade by a platform provider
• Benefits and drawbacks of a stochastic modelling tool

The annual pass rate for the J11 exam in 2017 was 46.94% (the lowest out of all the J exams) – this was a drop from 2016 (51.2%) which had also dropped from the 55.61% of candidates who passed in 2015.  Anyone thinking of sitting this exam in the future will do well to put together a well-structured study plan which includes a thorough study of past exam guides to ensure they are comfortable with the style of question being asked.

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!