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Catriona Standingford: CII exam on securities and dealing is a real asset

J12 is not one of the most widely talked about exams but is an interesting option for advisers looking to add a string to their bow

The Chartered Insurance Institute’s J12 Securities Advice and Dealing exam was introduced in 2013 following the RDR, along with its Level 4 Certificate in Securities Advice and Dealing. This area had traditionally been the domain of stockbrokers but can now be included in a financial adviser’s offering. It provides a different string to your bow and is worth considering if this is an area that interests you, or simply if you need additional credits to get to chartered.

Which level 4 exams are right for your staff?

In 2018, 74 per cent of J12 exam candidates passed, making it one of the best performers in terms of pass rates. J12 also forms part of the CII’s Level 4 Certificate in Securities Advice and Dealing which, if you already hold units R01, R02 and R03, will be yours upon completion of J12.

What is included?
The CII states the objective of J12 is to “develop understanding of the features and risks of different securities, the structure and features of the securities market, and relevant factors and considerations for appropriate investment recommendations”.

It is a two-hour exam with 60 multiple-choice questions and three case studies, each comprising five multiple-choice questions.

If you have already passed the CII R02 exam (Investment Principles and Risk) or the CII J10 exam (Discretionary Investment Management), you will find there is some crossover with the syllabus, which makes it seem like a natural progression.

That said, as you might expect, there is more detail within J12. For example, depositary receipts in the equities section have not been covered before and there is a lot more detail on warrants and foreign exchange, with the dealing, settlement and clearing chapters only being relevant to the J12 unit.

The J12 study text is refreshing, being well-written and interesting, with insight into how trading actually works and happens on a stock exchange.

This can be enlightening to candidates with no previous knowledge in this area.

Looking at the exam itself, the questions are also well-constructed and clear. It does cover some of the usual investment calculations, such as bond and dividend yields, but others include working out warrant conversion premiums and gearing ratios.

Getting to grips with CII’s trickiest R0 exam

Section B of the exam has 15 questions based on case study information. There are standard multi-choice questions with some calculations, as well as questions around the taxation of products and attitude to risk.

Certificate option
For those that wish to complete a full qualification in this area, the CII Level 4 Certificate in Securities Advice and Dealing satisfies the qualification requirement for those advising or dealing in securities.

To complete this qualification, you need to complete four CII units: R01 Financial Services, Regulation and Ethics (20 Diploma credits), R02 Investment Principles and Risk (20 Diploma credits), R03 Personal Taxation (10 Diploma credits) and J12 Securities Advice and Dealing (20 Diploma credits). Each of these are multiple-choice exams which can be sat all year round.

J12 is not one of the most widely talked about CII exams, but it certainly provides an option for an adviser looking to broaden their horizons.

Catriona Standingford is managing director at Brand Financial Training

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  1. I did the exam shortly after it was launched along with J10 Discretionary Investment Management. Combined with R02, there is a fair amount of overlap on the syllabus, but I found the combination interesting and the insights to discretionary management useful even though we remain an advisory only firm and probably will do so for ever as most clients respond quickly enough to advice for us not to need DM permissions.

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