Tag Archives: AF5

AF5 exam

AF5 March 2021

The fact find for the CII March 2021 AF5 exam is now available. If you haven’t yet seen this, click here.

As a training business, we don’t have any products that we can sell you that will help with this specific exam.  But we’re here to help people on the road to Chartered status so we will still try to help you as much as we can. If this isn’t your last AF exam, then remember us next time when you need support with an R0 or AF exam.

How do I prepare for this AF5 exam?

The exam is on the 2nd March. There is a reason why the  fact find is issued in advance of the exam – so you can prepare for it. So if you have a limited knowledge of investment trusts and testing against the LTA, for example, then now is the time to work on this.  In addition, most people need to work hard to practice their exam technique.

The exam will test across a range of different aspects of financial planning that are based on the two clients. You will not know the actual questions you will face until the exam day but it makes sense to prepare for a broad range of outcomes before then. The information provided in the fact find is exactly the same information that you will be given in the exam.

What areas should I focus on in the CII’s AF5 March 2021 exam?

The questions in an AF5 exam are based on the client’s immediate objectives and long-term objectives. These will be provided to you in the exam. Based on the fact find, you should be prepared to answer questions on the objectives that follow. Note that it is possible that some of the topics listed here as immediate objectives may actually be longer-term objectives (and vice versa), or may not actually be in the exam at all. But the better prepared you are, the better your chances of passing AF5.

Potential immediate objectives for Harry and Pauline:

  • To adjust their  income to meet their needs, or to adjust the income from Harry’s SIPP to meet their retirement income needs
  • To ensure their existing investments remain suitable for their needs (think here primarily about tax and their attitude to risk)
  • To assess the suitability of their existing life protection

In meeting these objectives, you may need to:

  • Provide advice on how they can improve the tax efficiency of their investments, e.g. reduce tax by making a ‘no loss no gain’ spousal transfer of the investment trust (or part of it) or other assets. Remember that she is a non-taxpayer and is not using her annual CGT allowance or dividend allowance
  • Provide advice on how they can make their retirement income more appropriate, e.g. reduce his SIPP withdrawals to a more sustainable level
  • Explain the income options available to Harry when taking further income from his SIPP
  • Explain how an investment trust works, e.g. what does ‘net asset value’ mean?
  • Explain how the use of a platform would help meet their needs
  • Understand what Harry’s current asset allocation is compared to their attitude to risk
  • Explain why Harry’s existing portfolio is not in line now with his attitude to risk and  provide advice on how this could be improved
  • Describe how a reviewable protection policy works and what impact Harry’s recent illness will have on this, or not
  • State the information you would need from Harry to establish how much LTA he has used. Remember that he is approaching age 75 and has an uncrystallised SIPP

Potential longer-term objectives for Harry and Pauline:

  • To mitigate their Inheritance Tax liability (IHT) whilst ensuring that their estates pass to their intended beneficiaries.
  • To ensure that their financial affairs can be managed in the event of future ill-health

In meeting these objectives, you may need to:

  • Calculate their IHT liability if they were to die today (calculations in AF5 are rare but not unknown)
  • Provide advice on how to minimise their IHT, e.g. how they can use trusts with their existing investments to minimise IHT (or gift using their existing investments)
  • Explain the position of Harry and Pauline’s pensions in the event of death
  • Explain what a LPA is, how it is set up, and/or the benefits of them both of having one

What do I need to do to pass the CII’s March 2021 AF5 exam?

  1. Most people who fail AF5 do so because of poor exam technique. Click here to register (if you aren’t already a member) and get our FREE AF5 preparation guide. This looks at the all-important technique you will require.
  2. Familiarise yourself with the client’s circumstances. If you are provided with information, you will be expected to use it in some way. You should be able to apply your knowledge to their circumstances – generic answers will not usually score well.
  3. Revise and read around the technical aspects. Google is a good place to start.
  4. The exam will be sat under remote invigilation. If you have not experienced this before, here is the link to the CII website. Make sure everything works before the day of the exam.
  5. Be familiar with the technique and style of answers the CII will want. This is NOT just about applying your day job to an exam paper. Click here for a FREE copy of the last CII AF5 exam to see what a past paper looks like. Pay particular attention to the style of questions and model answers provided.

Important note

Please note that these initial thoughts are provided to give you some assistance in understanding the exam, and an indication of what may be examined. We regret that we are not able to respond to any individual queries.

Prepare well and be successful.

Ian Patterson

Ex-examiner and author of the CII’s study texts for CF8, J07 and AF6

CII AF exams

CII AF exams: study options with four weeks to go

So your CII AF exams are in around four weeks’ time. The CII suggest 150 hours of study is required for the written AF exams (100 hours for AF7) and some people will have already have done this amount of work. For many others, the hard work is just about to start.  You’ll probably have done enough exams by now to know what works best for you. Whether you are a ‘steady studier’ or a last minute ‘crammer’, you’ll know the last four weeks are crucial.  In this article, I’ll share some ideas about your AF exam study options and how to make the best of the remaining time you have available.

I’ve not done a CII AF exam before – how does it differ from a CII R0 exam?

  1. The CII AF exams are written exams, not multiple choice exams. The opportunity to ‘rule out’ a few options doesn’t work with the AF exams.
  2. AF1, 2, and 4, although they are Advanced Diploma exams, are based on the knowledge from the Diploma exams. In theory, there should be nothing new they can throw at you.
  3. R0 Diploma exams are largely about recall of knowledge with some application.  CII AF exams are largely about applying your knowledge to the case study that is given in the exam. Rarely in an AF exam would you get a ‘list’ type question. For example, you are unlikely to get a question asking you to list 7 features of FAD but you may be asked why FAD might be a suitable option for a client. In this case, the details provided in the case study will make it clear that some features will be more useful to  the particular client than others.
  4. Being Advanced Diploma exams, AF subjects will typically test more complex areas of the subject so preparation really is the key.

What does each AF exam tend to focus on?

Ah, it would be great if only we could tell you this!  The Syllabi for AF subjects are very broad. The good news is that the examiners will test some core areas in most papers and throw in a few more peripheral areas so they cover the full syllabus over a period of time. If you’ve done little study so far, with four weeks to go, it’s time to make sure you are OK with the core areas.

So what are these core areas? We’ve looked at the past exam papers and identified what these are. These can be found towards the end of each of our FREE preparation guides. Click here to download our guide for each of the specific  AF1, AF2, AF4, AF5 and AF7 exams.

With 4 weeks to go, what should my study plan look like?

This is what we recommend. The focus should be very much on doing practice papers at this stage, practising your technique and making as many mistakes as you can. Make these before you go into your exam! Use Diploma study texts and Google to check technical areas that you are not comfortable with.

AF exam study options

There are a range of these to suit how you prefer to study. I’ll cover the main ones:

1. The CII exam package.

This is a bundle that includes the exam entry. Along with this, it also includes study texts (eBooks) and access to RevisionMate – the CII online learning support. This varies between subjects but also includes a case-study workbook and multiple-choice questions to test your knowledge. For example, AF1 includes the eBooks for R03, R05, and J02.

2. Use existing R0 Diploma study texts.

These are great for checking examples and technical aspects. If you are using a text which isn’t in the current tax year, you obviously need to ensure the tax rates etc are still current.  With four weeks to go, your time is probably better used on practice questions, rather than trying to read study texts from cover to cover.

3. Practice papers.

Back to RevisionMate. This package also now includes lots of Practice Papers which are close to exam standard and are based on the current tax year.

4. Audio MP3 material.

These are ideal for learning on the go and for making sure your knowledge of both the ‘core’ and the ‘peripheral’ syllabus areas is good. They are available for AF1, 4 and 7 and most include over 6 hours of material. It also includes comments from CII examiners on the all important exam technique you will need.  If you spend time travelling, running or in the gym, these are an ideal way of learning on the go and reminding yourself of the areas you need to know.  Click here for a sample and full details.

Prepare well and be successful first time.

Until the next time…

The Diploma Doctor

AF exam

Preparing for your CII AF exam

What do you need to know to pass a CII AF exam first time?

The CII AF exams deserve some respect. Let me give you two reasons why. Firstly, the pass rates for the key technical exams (AF1 through to AF4) vary between 40% and 49%. Secondly, you will be required to apply your knowledge to more complex planning scenarios. The AF exams often mirror familiar day-to-day planning scenarios but AF questions will often be towards the harder end of the spectrum. And, of course, you aren’t able to use Google. And you have to do all of this usually under the pressure of a 3 hour written exam.

Preparation is key

Anyone who has played sport to a decent level will know that preparation is key. You don’t just turn up at the football ground or golf club and hope that you will perform at your best. In fact, how you perform will probably be a direct result of  how much training or practice you have put in. Passing an AF exam is no different.

So how much time do I need to spend practicing? The CII recommend 150 hours for AF1, AF2, AF3, AF4 and AF5 exams. For AF7 – it’s 100 hours.

Having said this, we also live in the real world. Most of us recognise that you need to do more than attend a one day workshop and then sit the exam. When preparing for an AF exam, someone once asked me: “do I have to sacrifice my business or my family life?”. It might sometimes feel like this, but it doesn’t have to.

What do I need to do to be successful first time?

Success in any AF exam is about two things:

Knowledge + application = success

Firstly, you need to know enough about a subject. This is hopefully obvious. But if you are sitting AF4 – Investment Planning – chances are you will need to know about the time value of money, dividend yields and the different ways of measuring investment returns. If you are  a typical financial adviser or para-planner, you are just not going to come across this in your daily work. And I could give lot’s of example for the other subjects – the AF syllabus for each subject is broad and you will need to prepare for this.

If you speak to a CII examiner, they are all likely to say the same thing. People often have enough knowledge to pass but fail to use it properly. What they mean is people in the exam don’t link their answers to the information provided in the case study, or don’t go into enough depth with their answers. Part of anyone’s preparation MUST be about completing at least two past CII exam papers. It’s the only way you will be able to understand both the exam and what the examiners are looking for.

Working smarter, not harder

Most people will have to put in hours of study, but really it’s about being smart about it. No one has enough time. That’s what our preparation guides are all about. They don’t cover any technical content. Instead, they succinctly tell you in around 16 pages what you need to know to get through the exam first time. There are individual preparation guides for AF1, AF2, AF4, AF5 and AF7. They tell you what some of the study options are for each exam and set out a suggested revision timetable. They outline your revision options and they include an analysis of past exam papers for each subject to identify the recurring areas – and every exam has them – that get examined.

The preparation guides are available to you FREE. Just click here and register as a member.

I would say “good luck with your exam”. But as we all know the more you prepare, the luckier you get!

The Diploma Doctor

1