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CII AF5

CII AF5 Exam September 2023

As a bit of background, the CII AF5 exam is a three hour exam. The exam itself is a fact-find basd exam, with eight main compulsory questions that will test your knowledge on various areas of financial planning. The nominal pass mark for the CII AF5 exam is 55%, and last year (in the 2022/23 year), the pss rate was 72%.

It’s less than a month to go until the next sitting of the CII’s AF5 exam. Given the case studies have not been released yet, you may be asking yourself if there is anything you should be doing?

The answer is absolutely yes, and we are here to help guide you through three things you should be doing now to give yourself the best chance of exam success.

1. Past and practice papers!

As you will probably already know yourself, past exam papers are one of the best ways for most people to prepare for an exam and the CII AF5 exam is no different. It is possible to download a free AF5 exam guide from the CII website and a host of ‘practice tests’. You can find these by clicking HERE.

These are updated past exam papers so regard them as good pre-fact find preparation. Now the fact-finds you will look at in past and practice exam papers will not be the same as the one you will be faced with in September, however it will allow you to become more familiar with the fact-find format of the AF5 exam.

It may surprise you to learn that in the vast majority of cases, the candidates that narrowly fail could easily have picked-up an extra 10-15% of the marks available, not by knowing more technical knowledge, but instead through applying better exam technique. Therefore familiarising yourself with past AF5 exams is vital.

2. Familiarise yourself with the types of question

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 CII AF5 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 the CII AF5 exam and 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 the CII AF5 exam 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 CII AF5 fact-find. 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 third 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 ‘explain’ question:

‘Explain to Doris the ‘small pots’ rules that allow her to take her preserved personal pension policies immediately and the tax implications of this course of action. (8 marks)’

Recommendation questions

Given the CII AF5 exam concentrates on financial planning, it really shouldn’t come as a huge surprise that recommendation questions feature in nearly every CII AF5 exam. Below is an example of a recommendation question:

‘Detail and justify the recommendations you would make in respect of each of the following financial objectives. No calculations are required. Candidates will be rewarded for supporting their recommendations with relevant evidence and demonstrating how the recommendations work holistically to meet the client’s objectives.

(a) To provide financial security for herself and her children in the event of illness.(10 marks)

(b) To provide financial security for her children in the event of her death. (8 marks)’

From an exam technique point of view, again notice the verbs that are used in the question. Take the example question for instance- detail and justify. Part (a) of the question will probably look for five recommendations that meet the client’s needs, with a further five marks justifying these.   

3. Read the examiner’s comments from previous exams!

You may or may not be aware, but in the past CII AF5 exam papers, there are examiner’s comments that are used to highlight where candidates scored well but also struggled.

You can via the February 2023 CII AF5 exam paper HERE and the September 2022 CII AF5 exam paper HERE. The examiners’ comments are found on page 10 of each of these documents so we’d strongly suggest that if you complete a past paper or two, as we suggest in point number 1, that you also read these examiners’ comments following this.

Final thoughts

It’s true to say that the hard work when preparing for a CII AF5 exam begins when you receive the case study. However, by doing the three above steps, you should put yourself in the best position to pass!

If you’d like some further tips on effective revision, click the below:

How to pass your CII AF exam first time

One of the best revision tips I ever learnt

Good luck with the exam!

Sam Patterson

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