Out of all the AF exams from the Advanced Diploma, the AF7 had the lowest pass rate, not including the discontinued AF3. Could this be caused by the shorter 2-hour exam time compared to other AF exams that allow 3 hours? You would assume this to be an easier exam, the test time is an hour shorter, its only 20 credits compared to all the other AF exams that give 30 and it’s only useful for one specific and specialised topic.
So why is it so hard to pass? In 2018 the pass rate was only 44.23%, better than the previous 2017 pass rate of 43.74%, but still very low for what would look like the easiest at an initial glance. However, looking at what an individual can advise on once they have achieved the credits for passing the exam, it gives you a much better understanding on why this is and should be one of the hardest to obtain. The FCA announced in October 2017 that the CII Level 4 Certificate in Pension Transfer Advice, which comprises of the CII RO1, RO2, RO4 & AF7, met their requirements to be a Pensions Transfer Specialist. But this will not last for long as from 2020 Pension Transfer Specialists must either have their full Level 4 Diploma in Financial Advice/Planning or obtain the full qualification for Retail Investment Advice, so for those who only have your Certificate in Pension Transfer Advice, I’m afraid you will have to get more exams done before 2020.
The CII states that ‘the objective of the pension transfer qualification is to develop the specialist knowledge and skills needed for advising on the transfer of safeguarded benefits. Maintaining up-to-date knowledge of current legislation is a key factor in passing this exam, with Pension Transfers on the news all the time, the regulations are constantly being updated along with FCA consultations.
Here are the links to the CII exam papers for April 2018 and October 2018, looking into these papers in more detail you will see a question in Section A about the statutory transfer process, it includes who is responsible for the various elements and the timescales that must be given. For maximum marks to be awarded I think you will need to produce an articulate, accurate and detailed answer as this undoubtedly is an important process. As an example, a client would need specific timescales given to them by a trustee, they have a clear responsibility to inform their client of a statement of entitlement, setting a guaranteed date and if they need to take financial advice, all of this must be explained in detail.
The standard testing structure of AF subjects requires candidates to pick out the relevant factors out of the information given to obtain the maximum amount of marks on offer. This is the best type of question to practising prior to any AF exam. If you are preparing to take an AF exam you should be familiarising yourself with these question formats and practice your answers to ensure they are precise and articulate.
Understanding the process, you should be able to explain if a transfer should go ahead by analysing the case studies in section B of the paper. With the use of practising with previous exam papers and understanding how to articulate your answers should mean a higher pass rate next year if all candidates understand the process and methodology of how to answer the questions.
This does mean that with the pending changes for 2020, that there is some uncertainty amongst the Pensions Transfer Specialists about their job security. If you don’t already hold the full Level 4 Diploma by 2020, what will happen to you in your existing role if you do not get the Diploma in time, are you ready for the change?
I would like to thank Catriona Standingford for her article on www.professionalparaplanner.co.uk newsletter for the inspiration of my article, a fantastic page to keep up to date with changes and gain further insight to the financial services industry.
I specialise in financial services recruitment, covering the Sussex, Kent and London area, with my colleagues covering all the other areas of the UK. should you find that you are looking for a change in role, are concerned that you may not be able to achieve the Diploma in time as your employer refuse to help with your exams or maybe know someone who is looking for a new role. Please feel free to contact me, Daniel Milliner on 0117 9450450 for a confidential chat.
