Tag Archives: April 2018

CII exams

April 2018 CII AF5 exam

The fact find for the April 2018 CII AF5 exam are now available. If you have’t yet seen it yet, click here.

What do I do now?

You have from now until the exam at 9.30 on the 18th April to prepare. The fact find is issued in advance for a reason – to allow you to prepare. You will not know the actual questions you’ll face in the exam until the actual day but it makes sense to prepare for any eventuality before then.  This involves:

  1. Thoroughly familiarising yourself with the client details.
  2. Researching some of the potential technical areas that might be examined (based on the client’s circumstances in this exam).
  3. Practising CII AF5 exam style questions (if you are not already familiar with them). Click here to download the October AF5 past exam paper for FREE.

What areas should I focus on in the April 2018 CII AF5 exam?

The questions in the CII AF5 exam are based on the client’s financial objectives; both long term and short. You’ll be provided with these in the exam hall so to help you prepare, here are our thoughts as to what these might be:

Possible short term objectives:

  • Purchase a holiday home
  • David to make gifts to his daughter
  • Review the suitability of their investments
  • Review their wills
  • Regular gifts for grandchildren’s university education

Possible long term objectives:

  • Maximise tax efficiency – income tax and CGT – of their investments
  • Preserve their estate/minimise IHT
  • Income options from their PPP/ SIPP

AF5 exam: technical areas to study

Based on the client’s circumstances, we believe that you may be required in the April 2018 CII AF5 exam to have a knowledge of the following topics:

• The risks of purchasing a holiday home
• Benefits of using a financial adviser
• How David’s investment trust works, inc the tax position
• Investment bonds and chargeable events
• VCTs and EIS schemes
• Deferring state pensions (pre-6/4/16)
• Pension Protection Fund
• IHT planning, especially the treatment of PETS, gifts out of income, and how gifts impact on the RNRB
• Trusts: Immediate post death interest (IPDI), interest in possession, and discretionary

• Cash flow modelling
• How David and June can improve the tax efficiency of their investments
• Spousal by-pass trusts

How does the April 2018 AF5 exam compare with previous exams?

The honest answer is that we don’t know until the day of the exam. Overall, there seem likely to be some familiar themes that we’ve seen before. There may be some value in looking at past AF5 papers with similar financial objectives to see how they were examined. None of the ‘technical areas’ appear to be terribly demanding, especially for those who prepare well before the exam. The one certainty is that there are a lot of areas the examiners could include based on the client’s circumstances. As always, preparation is the key.

Remember that AF5 is not just about technical knowledge. You still need to be familiar with the types of question the examiners will ask and the type of answers they expect to see. If you want to see  how many marks the examiners typically award for the main types of questions and see our detailed tips on exam technique, download our FREE preparation guide here.  This gives you helpful information like there will always be the following three types of question in AF5:

  • a risk question, e.g. the risks associated with the purchase of a holiday home, or David’s investment trust
  • an additional information question – despite the fact find, you do not have all the information you would need to provide advice
  • a review question

It is easy to forget that this is a financial planning paper, so it won’t just be about technical aspects. Expect ‘additional information’ questions (which candidates tend to answer badly) and advantages/drawback questions. In this exam, there might also be a question on cash flow and, as  always in an AF5 exam, there will be ‘review’question asking you about what you would cover during during an annual review meeting with these clients.

As always, preparation is the key. Good luck.

The Diploma Doctor

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