Tag Archives: AFA factfind

DipFA Factfind Exam Tips: How can I analyse protection needs of a family?

The DipFA factfind exam set for Jan 12th 2017 is fast approaching. Our lead tutor Betul Cuninghame explores some concepts worth considering here:exam analyst

When recommending protection policies, always imagine the effects of the financial risks on the family and think in detail. It is not a good practice to see only one aspect of such risks and making recommendations on that basis. Recommending  life cover equal to the mortgage debt only without giving any extra money for other costs after death may not suffice!

EXAMPLE: the death of a parent may mean that:

  • no more income will come from that parent,
  • mortgage is no longer affordable;
  • it may result in repossession due to non-payment of mortgage
  • repossession may bring homelessness to the remaining members of the family
  • the other parent will lose his/her job to look after the children etc.
  • funeral costs and other costs to be paid from the other parent’s income or savings until s/he gets grant of probate – s/he can’t access any savings of the deceased until s/he gets grant of probate, resulting in costly bills to be paid by other means.

All these risks require careful analysis and proportionate amounts to overcome financial issues after the events. Having a life cover just equal to the mortgage debt will only pay off the mortgage but it will not leave any money for the other costs after death of that parent e.g. funeral costs, legal costs (probate), bills to be paid (one parent’s income may not be sufficient to pay the whole household bills) etc.

So, either

  • increase the lump sum amount to cover these extra costs and to provide income with the remaining amount OR
  • have another cover to supplement the life cover: e.g. Life cover to pay off the mortgage as well as a FIB to provide income to cover all these extra costs after the death of one parent.

You should be able to decide what amount of cover would be appropriate and justify it in your reports.

For more help and support with your upcoming factfind exam see how we can help you at our dedicated DipFA Training web site

IFS DipFA Fact Find exam 7th July 2016

The Fact Find for the next exam has just been released, and there is plenty to get your teeth into!rp_finance-role1-300x200.jpg

What is covered?

The fact find covers a wide variety of topics, such as;

  • Inheritance Tax Planning
  • Final Salary Pensions
  • Investment Planning
  • Ethical Investments

and more, all to be researched and then written up in a 3 hour exam.

As always, there may also be areas or information missing or incomplete, which you will be expected to spot and account for, followed by some amendments on the day.

What does the exam look like?

Remember, the exam is there to test your knowledge, understanding, and crucially the application of that knowledge to the client’s situation and needs.

You will have to write or type out a full Suitability Report from scratch in three hours.  Whilst the report may not fully resemble a ‘real life’ report, (it is after all an exam) that is a tall order.

A good thing to remember is that you need to explain your recommendations, and why they are suitable for the clients, even if it seems ‘obvious’.

How should you prepare?

Research and Practice!

Reading and studying the required areas covered in the Fact Find is essential. Web searching the basics and then following up with the IFS Study Topic Folders is useful for most candidates.

Then once you have formulated some solid recommendations practice delivering your report in the 3 hour limit.

Remember though that anything can come up as an amendment on the day if the subject is in the syllabus!

Where can I get help?

For those looking to gain extra support on top of the IFS help and guidance, Futuretrend are running online courses and a one day course in London on 11th June 2016

However you choose to study, Good Luck to all those engaging with this exam!

Paul Davis

IFS DipFA Fact Find Exam July 2015

The Fact Find for the next IFS Factfind exam has just been released, and there is a lot to get your teeth into!

What is covered?exam analyst

The fact find covers a wide variety of topics, such as;

Trust Planning

Final Salary Pensions

Investment Planning

Protection Planning

Mortgage Advice

and others, all to be researched and then written up in a 3 hour exam.

 

As always, there may also be areas or information missing or incomplete, which you will be expected to spot and account for, followed by some amendments on the day.

What does the exam look like?

Remember, the exam is there to test your knowledge, understanding, and crucially the application of that knowledge to the client’s situation and needs.

You will have to write or type out a full Suitability Report from scratch in three hours.  Whilst the report may not fully resemble a ‘real life’ report, (it is after all an exam) that is a tall order.

 

A good thing to remember is that you need to explain your recommendations, and why they are suitable for the clients, even if it seems ‘obvious’.

How should you prepare?

Research and Practice!

Reading and studying the required areas covered in the Fact Find is essential. The IFS Study Topic Folders are a good place to start.

Then once you have formulated some solid recommendations practice delivering your report in the 3 hour limit.

Remember though that anything can come up as an amendment on the day if the subject is in the syllabus!

Where can I get help?

Further help can be found via Futuretrend’s DipFA fact find training courses.

 

IFS DipFA Fact Find Exam April 2015 – Possibly the most challenging one yet!

So, here we are, the Fact Find for the April exam has been released.  There are some intriguing exam analystaspects to these hypothetical clients’ situations.

There is a complex arrangement of the client’s financial affairs at death, and some interesting aspects of their current financial affairs.  In many ways, the IFS have delivered a more challenging exam than we have seen for a while, yet perhaps this is actually more realistic in terms of how people’s actual financial arrangements are in real life.

However, as in all fact find exams, regardless of how “life like” or not the exam is, the scenario is actually there to test your knowledge, and crucially, the application of that knowledge, to the clients circumstances, needs and objectives.

This blog summarises some of the key issues candidates will need to consider for this exam, and some pointers that students may find useful to review and refresh themselves of in addition to other study – this blog is not a comprehensive guide to the exam but should get you started.

As always, a solid understanding of taxation is required.  Anyone not fully clued up on the tax treatment of pensions, income and investments should immediately head to the IFS Study Folders (issued by the IFS when they started the DipFA course), and look up the Taxation folder, as well as the Retirement Planning folder.

 

For this particular exam, some key areas are;

  • Technical knowledge of Defined Benefit pensions (Final Salary) – is there a little ‘trap’ here for the unwary?!
  • Inheritance Tax options and planning
  • Investment planning and risk, especially around ethical investments

This is most definitely not a comprehensive list, and of course don’t forget, anything in the syllabus can be considered relevant for the exam.  The amendments on the day can cover any issue covered in the Study Folders, or related to these areas.  Candidates would be well advised to at least review the sections of the Study Folders for areas of advice they are not familiar with prior to the exam itself.  According to recent Examiner’s reports, many candidates are missing out on marks as a result of not sufficiently addressing the amendments on the day.  If there are gaps in your knowledge compared to the syllabus, you run the risk of being caught out

 

Further help can be found via Futuretrend’s DipFA fact find training courses.

Which Financial Advisor Diploma should you study?

A Summary of the IFS and CII Financial Advisor  Diploma Courses

This blog summarises the basic elements of both the IFS and CII image-calc
Diploma courses.  It should be noted that neither is “better” or more “difficult” than the other, it is simply a question of which qualification route is more suitable for you.  Whilst I cannot offer individual career advice, hopefully the information in this blog will help you if you are trying to decide which option to choose.

What does the Diploma qualify you to do?

The qualification means that you can advise on regulated collective pensions and investment products, including all types of funds; as well as insurance products.  The qualification does not cover mortgage advice which requires a separate qualification.  The qualification does not cover Discretionary Investment Management or advice on Direct Securities (Stocks and Shares), both of which require additional or different qualifications

Candidates should make their own decisions based upon their own requirements and career plans.  Full details are on the relevant professional bodies’ websites.  The information in this blog is based on the relevant websites.

CII

http://www.cii.co.uk/qualifications/diploma-in-regulated-financial-planning-qualification/

IFS

http://institute.ifslearning.ac.uk/Qualifications/QualificationsinFinancialAdvice/DipFA.aspx

 

What is the Diploma and what does it involve?

 Both the IFS and CII Diplomas are recognised as compliant qualifications for Investment Advisers, that is those wishing to advise on pensions and investments, which technically means holding the FCA Approved Person status CF30.  Both the IFS and CII options are recognised by the FCA as appropriate qualifications, and are at an academic level called QCF Level 4 which has been confirmed as such by OfQual (the exams regulator).

It is worth remembering that the syllabus is issued by the FCA, and each Diploma therefore meets that syllabus.  However, despite the fact they share the same syllabus, they are tested very differently;

 

  • The CII route has a greater emphasis on ‘technical’ knowledge and there is more maths. There are five multiple choice exams and one written exam, with each technical area of the syllabus being tested separately then all the areas being brought together for the last written exam.  For candidates that are looking to focus on investments, are comfortable with multiple choice assessments, prefer a more technical approach, or who don’t really fancy writing essays (see IFS below), this is probably a solid route to consider.

 

  • The IFS route has a greater emphasis on a more holistic or generalist approach, and is less ‘technical’ with less emphasis on maths. However, it only has one multiple choice exam (regulations and ethics), and instead has two demanding essay based assessments, which have to be written at an academic standard equivalent to the first year at University. In both written assessments, technical knowledge is tested as part of an overall written assignment.  For candidates that are looking at more general financial planning, are less ‘technical’, or who prefer the essay option, this is probably a solid route.

 

I tutor and train candidates for each route, so I know that each route is a demanding and difficult route to take!  However, on an individual basis, candidates may feel that a particular route is more suitable for themselves.  Some-one who is very uncomfortable doing essays may be better off with the CII route, whereas some-one who is uncomfortable with more technical questions may be better off with the IFS route.

 

Even though the two Diplomas are equal in the eyes of the FCA’s requirements that does not mean that the IFS and CII necessarily see each other’s qualification as equal!  A recent article described the cost incurred by a Diploma qualified adviser who switched from being an IFS member to a CII member (1).  Some-body switching from one diploma route to another would need to apply for credits based on their existing exams, which is assessed on an individual basis each time.  Therefore, before commencing a Diploma, students should seriously consider which body they wish to study with based upon their own requirements and future career plans.

 

Timescales may also be important to you.  All of the CII Multiple Choice exams, and the one IFS Multiple Choice exam, can be accessed all year round at your own convenience.  However, the final CII paper, R06, is quarterly.  The last two written assessments from the IFS (called Advanced Financial Advice or AFA) are also quarterly and are taken one after the other.

 Comparison Table – see notes below

 

  Cost Modules/Units Study Time(hours) Summary of Assessment Pass Mark
IFS £684 3 400 ·      One Multiple Choice exam (FSRE)·      One Coursework (4,000 word essay and short questions)

·      One Written Exam (Suitability Report 3 hour written exam)

·      Together known as AFA

·      70% for the Multiple Choice Exam·      50% for the two written assessments
CII £1,059 6 370 ·      Five Multiple Choice Exams (R0 1 to 5) 

 

·      One Written Exam (Fact Find 3 hour exam short answers) (R06)

·      65% to 70% for the Multiple Choice exams·      55% for the Fact Find exam

 

Notes –

  • IFS – The costs of the IFS option can be reduced to £575 if you decide not to take up the IFS online tutor option. However, if you decide to ‘de-link’ the IFS FSRE and AFA to take the qualification in less or more than the 9 months’ timetable, the costs may increase.  The IFS costs include the Study Texts automatically.

 

  • CII – The CII Option is more expensive if you are not a CII member – frankly it just wouldn’t make sense not to join the CII! The CII option does not automatically include the Study Texts, so I have included them above.  However, if the Study Texts are not bought, the cost can be reduced significantly.  The above option is called the Diploma in Regulated Planning.

 

  • Re-sits will cost more in all cases.

 

Another option for existing CII exam holders

 

There is another CII Option, called the Diploma in Financial Planning.  This is useful for those who already hold other CII credits at Diploma level.  On a personal basis you can pick and choose from a wide range of R0 and J0 diploma level papers, and then provide Structured Gap Fill to ensure you meet the syllabus of the post RDR Level 4 FCA requirements.  However, be aware that the Gap Fill is genuine Structured Gap Fill!

 

 

Other Qualifications

 There are a wide range of approved qualifications, so this blog focuses on the ones that I train on.  The IFS and CII Diploma routes are the main routes for financial advisers, however there are others.  For those looking at stock-broking, the CISI also offers courses for investment advisers working solely in investment advice for stockbrokers, wealth managers, etc.  For such students and also those aiming for fund management or international investment based careers, there is also the CFA route.

 

Make Your Choice!

Whichever route you choose is ultimately up to you, as each Diploma achieves the regulatory requirements, albeit in different ways.  Some firms have a clear internal policy preference for a particular route so in those cases the choice may be made for you!

 

I hope this explanation and comparison of the two main Diploma options has helped you.

 

Paul Davis,

BA (Hons), Cert.Mgmt (Open), Dip. PFS

References

 

Notes –

All reference to external websites and bodies is taken at the readers own risk, as Lewis Davis Ltd accept no responsibility for the accuracy of any external website or organisation.  Errors and Omissions excepted.

The terms IFS, CII, CISI and CFA are registered trademarks and the use of these terms by Lewis Davis Ltd does not imply any association or accreditation by those bodies of Lewis

Paul provides  DipFA FSRE Training, Advanced Financial Advice Training and various  CII modules Training for Futuretrend

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IFS DipFA Fact Find exam date 03/07/14

Some pointers…exam analyst

The Exam due for the July sitting provides a fairly complex financial planning scenario, based on the needs of a fictional Mr and Mrs Osbourne

Many of the issues present in the exam are very similar to “real life” scenarios so the IFS have provided a suitable exam challenge for students looking to qualify as financial advisers.

However, as in all fact find exams, regardless of how “life like” or not the exam is, the scenario is actually there to test your knowledge, and crucially, the application of that knowledge, to the client’s circumstances, needs and objectives.

This blog summarises some of the key issues students will need to consider for this exam, and some pointers that students may find useful to review and refresh themselves of in addition to other study – this blog is not a comprehensive guide to the exam but should get you started.

As always, a solid understanding of taxation is required.  Anyone not fully clued up on the tax treatment of income and investments should immediately head to the IFS Study Folders (issued by the IFS when they started the DipFA course), and look up the Taxation folder.  This is particularly crucial as Mrs Osborne is a higher rate taxpayer and both clients have assets.

Additionally some specific areas to consider are;

Retirement planning including ‘final salary pension’ schemes

Needs based Protection planning including reviewing existing policies

Share Incentive Plans

This is most definitely not a comprehensive list, and of course don’t forget, anything in the syllabus can be considered relevant for the exam.  The amendments on the day can cover any issue covered in the Study Folders, or related to these areas.  Students would be well advised to at least review the sections of the Study Folders for areas of advice they are not familiar with prior to the exam itself.  According to recent Examiner’s reports, many students are missing out on marks as a result of not sufficiently addressing the amendments on the day.  If there are gaps in your knowledge compared to the syllabus, you run the risk of being caught out!

Further support can be found by booking attendance at one of Futuretrend’s DipFA courses.

Paul Davis, BA (Hons); Cert Mgmt (Open); Dip. PFS .

 

IFS DipFA Fact Find exam date 10/04/14

IFS DipFA Fact Find exam date 10/04/14exam analyst

Some pointers…

The Exam due for the April provides a relatively straight forward financial planning scenario, based as it is on a single fictional client, Alexander Eyre.

Many of the issues present in the exam are very similar to “real life” scenarios so the IFS have provided a suitable exam challenge for students looking to qualify as financial advisers.

 

However, as in all fact find exams, regardless of how “life like” or not the exam is, the scenario is actually there to test your knowledge, and crucially, the application of that knowledge, to the client’s circumstances, needs and objectives.

 

This blog summarises some of the key issues students will need to consider for this exam, and some pointers that students may find useful to review and refresh themselves of in addition to other study – this blog is not a comprehensive guide to the exam but should get you started.

 

As always, a solid understanding of taxation is required.  Anyone not fully clued up on the tax treatment of income and investments should immediately head to the IFS Study Folders (issued by the IFS when they started the DipFA course), and look up the Taxation folder.  This is particularly crucial as Mr Eyre has both self employment and paid employment income, as well as various liquid assets already accumulated.

Additionally some specific areas to consider are;

Trust Rules and taxation plus Trust investment planning

Retirement planning

Needs based Protection planning

 

This is most definitely not a comprehensive list, and of course don’t forget, anything in the syllabus can be considered relevant for the exam.  The amendments on the day can cover any issue covered in the Study Folders, or related to these areas.  Students would be well advised to at least review the sections of the Study Folders for areas of advice they are not familiar with prior to the exam itself.  According to recent Examiner’s reports, many students are missing out on marks as a result of not sufficiently addressing the amendments on the day.  If there are gaps in your knowledge compared to the syllabus, you run the risk of being caught out!

Further support can be found by booking attendance at one of Futuretrend’s DipFA courses.

Paul Davis, Dip. PFS, Futuretrend Tutor.

 

IFS DipFA Exam (date 16/0513)

IFS DipFA Exam (date 16/0513)

Some pointers…

The Fact Find presents us with a scenario for a Mr & Mrs Atkinson.  The scenario presented provides a number of challenges for students across a diverse range of advice areas.  Students must remember that the scenario presented is there to test your knowledge, and crucially, the application of that knowledge to the client’s circumstances and the suitability of your advice.

This blog summarises some of the key issues students will need to consider for this exam, and some pointers about specific parts of the IFS DipFA Study Folders that students may find useful to review and refresh themselves of in addition to other study – this blog is not a comprehensive guide to the exam but should get you started.

Anyone not fully clued up on taxation basics should immediately head to the IFS Study Folders (issued by the IFS when they started the DipFA course), and look up Topic 2 and Topic 3 in the Taxation folder.

Additionally, in preparation for one of our courses, some specific areas to consider for further study are;

  • Defined Benefit (final salary) schemes, in Retirement Topic 5.3.2
  • Tax efficient saving and investing, in Investments Topic 12
  • Protection Planning, in Protection Topic 9
  • Clients attitude to Risk, in Investments Topic 14.2.1
  • Retirement Planning Topic 7

This is most definitely not a comprehensive list, and of course don’t forget, anything in the syllabus can be considered relevant for the exam.

You will be presented with amendments to the Fact Find on the day.  The amendments on the day can cover any issue covered in the Study Folders, or related to these areas.  Students would be well advised to at least review the sections of the Study Folders for areas of advice they are not familiar with prior to the exam itself.

Further support can be found by booking attendance at one of Futuretrend’s DipFA Fact find courses, or on the remote support option.

Paul Davis, Dip. PFS, Futuretrend Tutor.

 

Some pointers for IFS DipFA Exam (07/03/13)

IFS DipFA Exam (date 07/03/13)

Some pointers…

The Fact Find presents us with a scenario for a Mr and Mrs Franey.  In my opinion the scenario in this exam is not a million miles removed from any number of real life cases that many Advisers may have seen during their career.

However, regardless of how life-like or not Students may feel the scenario is; it is of course actually there to test your knowledge, and crucially, the application of that knowledge to the client’s circumstances and the suitability of your advice.

This blog summarises some of the key issues students will need to consider for this exam, and some pointers about specific parts of the IFS DipFA Study Folders that students may find useful to review and refresh themselves of in addition to other study – this blog is not a comprehensive guide to the exam but should get you started.

In this scenario, the clients have exposure to income tax and national insurance as both an employee and as a sole trader.  A solid understanding of the rules relating to Income Tax and National Insurance (N.I.) is essential.  Anyone not fully clued up on these basics for both employed and self employed clients should immediately head to the IFS Study Folders (issued by the IFS when they started the DipFA course), and look up Topic 2 and Topic 3 in the Taxation folder.  Also be aware of N.I. Contributions once over State Retirement Age.

Additionally, in preparation for one of our courses, some of the required subject specific areas to consider for further study are;

  • Defined Benefit (Final Salary) pensions.  See Retirement Topic 5.3.2
  • Needs Based Protection Planning.  See Protection Topic 9
  • Investment Advice.  See Investments Topic 14

This is most definitely not a comprehensive list, and of course don’t forget, anything in the syllabus can be considered relevant for the exam.  The amendments on the day can cover any issue covered in the Study Folders, or related to these areas.  Students would be well advised to at least review the sections of the Study Folders for areas of advice they are not familiar with prior to the exam itself.  According to recent Examiner’s reports, many students are missing out on marks as a result of not sufficiently addressing the amendments on the day.  If there are gaps in your knowledge compared to the syllabus, you run the risk of being caught out!

Further support can be found by booking attendance at one of Futuretrend’s DipFA Exam Workshops, or on the remote support option.

Good Luck!

Paul Davis, Dip. PFS, Futuretrend Tutor.

Some pointers for IFS DipFA Exam (14/02/13)

IFS DipFA Exam (date 14/02/13)

Some pointers…

The Fact Find presents us with a scenario for a Mr Teague.  As usual, the IFS Exam Fact Find details a client scenario that stretches the imagination…the client is 28 years old with a child to provide for and yet has somehow managed to accumulate some £129,000 in liquid assets in his own name!

However, the scenario is of course not necessarily meant to be representative of real life, it is actually there to test your knowledge, and crucially, the application of that knowledge to the client’s circumstances and the suitability of your advice.  So, as usual, let’s not get hung up over how realistic or not the scenario is.

This blog summarises some of the key issues students will need to consider for this exam, and some pointers about specific parts of the IFS DipFA Study Folders that students may find useful to review and refresh themselves of in addition to other study – this blog is not a comprehensive guide to the exam but should get you started.

  • In this scenario, the client has exposure to income tax and national insurance as both an employee and as a self employed freelancer.  A solid understanding of the rules relating to Income Tax and National Insurance is essential

Anyone not fully clued up on these basics for both employed and self employed clients should immediately head to the IFS Study Folders (issued by the IFS when they started the DipFA course), and look up Topic 2 and Topic 3 in the Taxation folder.

Additionally, in preparation for one of our courses, some specific areas to consider for further study are;

  • Investments including Investment (Stocks & Shares) ISA accounts see Investment Topics 12.1 for ISAs; and 10.2 for Unit Trusts as well as 11.2 for With Profits Investments
  • Student Loan repayments and liabilities
  • Enterprise Investment Schemes see Investments 12.5
  • Warrants see Investment Topic 5.1

This is most definitely not a comprehensive list, and of course don’t forget, anything in the syllabus can be considered relevant for the exam.  The amendments on the day can cover any issue covered in the Study Folders, or related to these areas.  Students would be well advised to at least review the sections of the Study Folders for areas of advice they are not familiar with prior to the exam itself.

Further support can be found by booking attendance at one of Futuretrend’s DipFA Factfind Course, or on the remote support option.

Paul Davis, Dip. PFS, Futuretrend Tutor.