The CII AF5 exam always throws up a question that no one sees coming. It’s usually on a topic that is not highlighted with any great significance in the case study and is designed to really allow candidates that are really well prepared and experienced to stand out. This ‘mystery question’ is hard to prepare for and it’s worth saying that at this point, everything else in this article is guess work to an extent. But something stood out for me whilst analysing the upcoming February sitting of the CII AF5 exam. It was the last sentence on page 4 of the case study. “Neil and Helen do not intend to pay university tuition fees for their children but will provide limited financial support”. Now there is nothing particularly surprising about that sentence. Well, at least not until you consider the case study as a whole. Neil and Helen are in a very strong financial position. They have a large amount of liquid assets, they have surplus income each year and have also indicated a willingness to downsize in the future. On top of this, they do not intend to retire for another ten years, and they have paid for private school fees for Samuel and Anna previously. So it did stand out that we are told they do not intend to pay university tuition fees. I could be barking up the wrong tree, but if I were studying for the upcoming AF5 exam, I’d just familiarise myself with the student loan structure, just in case Neil and Helen do have a change of heart! The student loan structure did also change from September 2023, which has flown under the radar of most in the financial planning profession (in my experience!). But what changed? In September 2023, the student loan changed from Plan Two to Plan Five. The impact? Students taking a student loan after September 2023 will face higher levels of annual repayment and also the percentage of students likely to clear the full loan increased from an estimated 23% (for students on Plan Two) to 52% (for students on Plan Five). What should I familiar myself for the exam? Again, I wouldn’t spend too much time on this. This sitting of the CII AF5 exam does seem to be one of the more complex case studies and it’s unlikely that ‘the mystery question’ will lead you to passing or failing this exam. However, in my opinion, just familiarising yourself with the student loan is worth the effort, in the off chance that it is tested. There are three main areas I’d try to remember; when students are required to begin repaying a loan, the term of the loan and the level of interest added. Threshold – On Plan 2, graduates were required to repay 9% on any income received over the threshold of £27,295. For the new Plan 5 (that came in from September 2023), graduates of this plan are required to repay 9% on any income received over a threshold of £25,000. Maximum Term – Plan 2 had a maximum loan term of 30 years. However, for Plan 5 this has been increased to 40 years. Interest Added – Interest up to RPI + 3% was added to the Plan 2 loan, with this changing to just RPI for Plan 5. What’s the impact of these changes? The changes above may seem fairly small, a slight lowering of the threshold and increase to the maximum term, but the impact is huge. On average for graduates on Plan 2, the state expects to pay 44p for every £1 borrowed. This is because given the maximum term, the majority of graduates would never fully repay their loans, with only 23% of graduates on the Plan 2 loan expected to fully clear their outstanding balance. In contrast, the state expects to only pay 19p for every £1 borrowed for graduates on the Plan 5 loan, with 52% of graduates expected to fully repay their loan within the extended 40 year term. And it’s for this reason that I’d familiarise myself with the student loan ahead of the CII AF5 sitting, just in case! For more information, please read the article I wrote last year ahead of the changes. I hope this article has been helpful, and best of luck with the exam! Sam Patterson

The next R06 exam is quickly approaching and it’s vital that you make the best use of your time ahead of the exam. Afterall, the exam is a test of knowledge so you need to ensure you have as much as that as possible! However, if you do not answer the question the examiners have set, the exam will likely not go so well! Now this seems obvious but in our 29-years experience in training candidates through exams, not properly understanding the question asked if one of the major reasons why candidates fail the R06 exam. So we wanted to bring you a blog to share with you the types of question that will be asked in the R06 exam, and how to answer them! Types of questions So I’m sure that you will be familiar with the expression ‘past performance is not a guide to future performance’ and this applies to exams as much as it does with investment advice. There are likely to be questions in some areas of the case studies that will surprise you and it’s also likely there will be questions which are less of a surprise. Looking back at past exams will show you that there are questions that feature in just about every RO6 exam. Below are the six question types that you need to understand and master: Risk-based questions This type of question is primarily used in AF5 but it may also be used in RO6 (although it’s not been regularly used in this exam). An example of a risk-based question is as follows: ‘Sanjay would like to know more about the risks associated with investments. Excluding market risk, identify the relevant investment risks and describe how they apply to the following: (a) Cash held within the bank (8 marks) (b) The proposed purchase of a holiday home in Spain (10 marks)’ From an exam technique point of view, it is important with R06 to spot the verbs used in the question. So take the above example, the verbs are identify and describe, which means when answering the 10 mark question relating to the holiday home, you would have received 5 marks for identifying the five types of risk outlined above and a further five marks for describing how these apply to Sanjay. Ideally, you would also include at least one extra risk factor with a suitable description to maximise your chances of getting full marks. History has shown that the number of marks for this type of question does vary but you could expect around 10 marks of this style in a typical exam. Fact-find questions As the name suggests, this style of question requires you to identify the additional information that you would require, prior to advising a client, beyond that provided in the R06 case studies. Like the risk-based question, this is a favourite type of question with examiners and therefore you should ensure you are comfortable answering these. Depending on the exam, the focus of this question will be either the client’s objectives (e.g. Immediate financial objectives) or an element of the client’s financial planning needs (e.g. retirement planning). Remember, that asking for information that has already been provided in the fact-find shall not score well, as it shows the candidate is lacking the ability to correctly apply answers to the information provided. An example of a fact-find question is as follows: ‘Identify the additional information you would need to discuss with Mike in order to advise on how to meet his: (a) Immediate financial objectives (14 marks) (b) Longer-term financial objectives (14 marks)’ Comment on questions This is the fourth style of question that we will look at and this perhaps needs a little more explanation than the previous three question types. It is important to understand what the examiners are looking for with this style of question. In effect, it means ‘describe the position’. It doesn’t ask you to elicit additional information and it doesn’t ask you to make recommendations. Instead, it’s a question asking you to basically outline the information that is available to you. Hopefully the below example will help to demonstrate this: ‘Fiona is particularly concerned about the impact long-term illness or death will have on the family’s situation. (a) Comment on the current situation and identify any weaknesses in Fiona’s protection arrangements if she suffered a long-term illness or disability. (8 marks) (b) Comment on the current situation and identify any weaknesses in Fiona’s financial arrangements if she died tomorrow. (8 marks)’ Review questions This style of question traditionally requires you to either: Identify the key events that would trigger a review of a client’s circumstances. Identify the actions you would need to take when reviewing a specific area of advice provided to clients e.g. review protection needs, ongoing suitability of investments, income in retirement. Below is an example of a review question: ‘When conducting an annual review, list eight areas that you would specifically address with John. (8 marks)’ Explain, outline or describe questions These may be used as a verb in one of the other questions, e.g. ‘explain the risks of…’. In this case, being aware that you are being asked to identify the risks of something is the important bit. On other occasions, it is the ‘explain’, ‘outline’ or ‘describe’ that is important. This type of question requires you to demonstrate the depth of your knowledge. With this type of question, the examiners are asking you to provide detail. If you are not precise or you do not link the information to the scenario given, you will not score well. For example, if you are asked about taking income from an investment bond, you would probably get marks for saying something like: 5% withdrawal may be taken (1 mark) based on the amount invested (1 mark) tax deferred (1 mark) for a period of up to 20 years (1 mark) Here is an example of a risk-based question: ‘Explain to Doris the ‘small pots’ rules that allow her

Here are the CII AF exam dates for 2024 which are include two sittings.  Sitting One (February to March) AF1: 20th February AF5: 13th February AF7: 5th March AF4: 7th March Sitting Two (September to October) AF1: 10th September AF5: 17th September AF7: 24th September AF4: 1st October Written exams vs coursework? Of course, the CII now offer AF6 and AF8 on a coursework basis. This means that you have to submit assignments and there isn’t a specified exam date. But you do need to complete all three assignments within a 12 month period so if you intend to sit one of these subjects and a written AF exam, schedule the writing of your assignments to avoid the times when you will need to study for the AF written exam. Enrolment for the assignment-based exams – AF6 and AF8 – can be at any time.  Note that the 12 month clock starts ticking when you enrol, not when you submit your first assignment. Which is the easiest CII AF exam? In theory, this might be a sensible way to select an exam. In practice, it might not quite workout this way. We always suggest selecting an exam that is of most use to your work and to your business. If you work in a specialist area, then your day-job may help to give you a head start in a subject where others struggle. Here are the latest CII pass rates for the AF exams at the time of writing (July 2023): AF1 – 42% (-1% on the previous year) AF4 – 57% (+7% on the previous year) AF5 – 72% (+9% on the previous year) AF6 – 97% (no change) AF7 – 61% (+5% on the previous year) AF8 – 75.3% (no change) NB The pass rate for assignment-based exams such as AF6 and AF8 suggest that these exams are easier than they are. This is because the pass rates are only based on those that submit and successfully complete all of their assignments – and do not include people who ‘drop out’. Click here for the figures for previous years and to see the trends. Want to know more? CII website – AF exams Free AF exam preparation guide (for AF1, 2, 4, 5 or 7). Click here For details of all written financial services exams (e.g. J07, J05), click here Prepare well and be successful. Sam Patterson