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Top tips ahead of CII R06 and AF5 exam sittings

Last-minute preparation for the next round starting on 16 April

In order to complete the level 6 Advanced Diploma in Financial Planning, a student must pass the compulsory unit AF5: Financial Planning Process. Anyone that holds the level 4 Diploma in Regulated Financial Planning will already have passed R06: Financial Planning Practice.

These exams do have a few things in common. They are both three hours long, a pass gives 30 credits, the nominal pass mark is 55 per cent and candidates receive client information two weeks before the exam. But that is probably where their similarity ends.

R06

R06 comprises two written case studies and when the information is released, this includes what the clients’ financial aims are.

Candidates should then spend the two weeks planning and preparing for the types of question that might be asked around both sets of client’s financial aims. The exam is fairly formulaic and the questions are usually based on:

  • Fact finding
  • Recommending and justifying a particular product
  • Explaining why a product might be suitable
  • Explaining something technical such as powers of attorney
  • Financial planning reviews

Each financial aim should be considered carefully and candidates would do well to think about each of these points for each of the financial aim given. We might be able to predict with accuracy the types of question asked but it is anyone’s guess which aim they will be concerning. It is also worth thinking about any relatively new legislation or products in case these are included.

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In the past, there have been curve ball questions no one could have predicted. In most cases, a candidate will be able to use their own experience and knowledge in order to answer them but, even if they are completely blind-sided, it should not affect the result, as long as they are well prepared otherwise.

AF5

AF5 is different in that the information received two weeks prior to the exam is a replication of a client fact find and the aims of the client are not given. Having said that, information is given throughout which should give clues as to where the questions might be going on the day.

On the day of the AF5 exam, the client(s) immediate objectives and longer-term objectives are given. It really does not matter if a candidate has identified a short-term objective which in the exam turns out to be a long-term one.

The types of question asked in the AF5 exam also include fact finding. This is usually, but not always, the first question delegates will face and involves identifying the additional information needed as an adviser to help the client(s) with their immediate and longer-term objectives.

If the question concerns all of the objectives (which it has in the past), this gives around 30 marks. If it just focuses on two of the objectives, the marks are still around 20, so anyone must prepare a fact-finding answer to all of the objectives they have identified.

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AF5 also uses “recommend and justify” question types. This could be on changes that should be made to an investment portfolio or an actual product. The important thing to remember is that there will be one mark for the recommendation and one for the justification, so do not forget to do both (the same applies for R06).

Other common questions include having to comment on a particular aspect of financial planning, reviews or investment risk, which could be on any of the investments the clients hold (or might be inheriting). Again, delegates would do well to prepare a good model answer beforehand that can easily be adapted to the actual area being tested.

AF5 may also include curveballs that could not have been predicted no matter how much preparation had been done. However, like R06, if a delegate does not know anything about that subject but has prepared well for the other areas, it should not mean a fail.

The pass rates for both exams are good. In 2017, 73.4 per cent of candidates passed R06 – one of the highest out of the R0 exams. Although AF5 was slightly lower, at 64.6 per cent, this was still the highest pass rate out of the AF exams.

Catriona Standingford is managing director at Brand Financial Training

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