With discussions over the Retail Distribution Review (RDR) drawing to an initial conclusion, Mike Goldsmith of Wizard Learning considers what it takes to achieve Chartered status with the Personal Finance Society and also briefly assesses a couple of alternatives.

Many of you will be aware of the proposals outlined in the FSA’s RDR discussion paper and the debates that have followed. The review gives real impetus to advisers and other professionals working within the financial planning sector, to achieve higher-level qualifications and professional standards. For example, one of the requirements to achieve the RDR’s proposed “Professional Financial Planner” designation, is for firms to have Chartered status (or equivalent). This may sound onerous but you also need to consider some of the benefits to firms in achieving this level, such as less intensive FSA regulation and lower minimum capital requirements.

The primary aim of this article is to help you understand the route towards Chartered status with the CII’s Personal Finance Society both individually and as an organisation. I shall also discuss one or two alternative routes that people may wish to take.

Achieving individual Chartered status

There are 3 levels of qualification with the CII that provide the route for an inexperienced individual towards becoming a Chartered Financial Planner. Those wishing to earn this status need to accumulate a minimum number of 290 credits from the CII’s exams (or those of other professional bodies considered suitable). Each exam passed, provides a number of credits. As the individual works through the qualifications, a minimum number of credits will need to be achieved from exams at the 2 higher levels in addition to the credits already gained.

The first step is the certificate in financial planning (CertPFS). This qualification has no entry requirements. There are 5 examination subjects that need to be passed to achieve the 70 credits required for the certificate award. Four of these are multiple choice, whilst the final requires written answers to 2 case study scenarios:

• CF1 UK financial services, regulation and ethics (2 hours, 100 question exam, 15 credits);
• CF2 Investment and risk (2 hours, 100 question exam, 20 credits);
• CF3 Financial protection (1 hour, 50 question exam, 10 credits);
• CF4 Retirement planning (1 hour, 50 question exam, 10 credits);
• CF5 Integrated financial planning (2 hours, case study based written exam, 15 credits).

For those working in particular advisory fields, there are further qualifications at certificate level. These have been developed to meet regulatory requirements in their respective fields:

• The Certificate in long term care insurance requires the individual to pass exams CF1-5 and also CF8 Long term care insurance (2 hours, 75 multiple choice questions, 15 credits).
• The Certificate in mortgage advice requires the individual to pass CF1 and CF6 Mortgage advice (3 hours, 125 multiple choice questions, 20 credits).
• The Certificate in equity release requires the individual to pass CF1, CF6 and ER1 Equity release (2 hours, 75 multiple choice questions, 15 credits).

The next stage is the diploma in financial planning (DipPFS). There are entry requirements at this level. Individuals need to have achieved either the certificate in financial planning or its CII predecessor, the old financial planning certificate. Equivalent qualifications approved by the Financial Services Skills Council from other awarding bodies are also acceptable.Individuals need to gain 140 credits to achieve the diploma. A minimum of 80 of these credits would need to be at diploma level. The certificate in financial planning counts as 70 credits towards the diploma.

There are 7 diploma exam subjects to choose from:

• J01 Personal tax (2 hours, 15 questions – short written answers, 20 credits);
• J02 Trusts (2 hours, 15 questions – short written answers, 20 credits);
• J03 The tax and legal aspects of business (2 hours, 15 questions – short written answers, 20 credits);
• J04 Pension funding options (2 hours, 15 questions – short written answers, 20 credits);
• J05 Pension income options (2 hours, 15 questions – short written answers, 20 credits);
• J06 Investment principles (2 hours, 15 questions – short written answers, 20 credits); and
• J07 Supervision in a regulated environment (2 hours, 15 questions – short written answers, 20 credits).

Once the diploma has been achieved, the final stage is the advanced diploma in financial planning (APFS). Providing the individual has at least 5 years relevant experience as well, successfully achieving the required number of credits will gain individual Chartered status.Of the 290 credits required in total, 120 must have been achieved from the advanced diploma subjects. The diploma in financial planning counts as 140 credits towards the advanced diploma.

There are 5 advanced diploma exam subjects to choose from of which AF5 – The financial planning process is compulsory:

• AF1 Personal tax and trust planning (3 hours, case study written answers to questions, 30 credits);
• AF2 Business financial planning (3 hours, case study written answers to questions, 30 credits);
• AF3 Pension planning (3 hours, case study written answers to questions, 30 credits);
• AF4 Investment planning (3 hours, case study written answers to questions, 30 credits);
• AF5 The financial planning process (3 hours, case study written answers to questions, 30 credits).

All of the CII qualifications require students to assimilate and apply a considerable amount of technical understanding even at certificate level. To do themselves justice therefore, students should spend an appropriate amount of time on planning and implementing a disciplined programme of study, especially where this revolves around their work/family situation.As a guide, the CII recommends the following study time for each level:

• Certificate in financial planning – 280 hours;
• Diploma in financial planning – 360 hours;
• Advanced diploma in financial planning – 570 hours.

Once the goal of Chartered status has been achieved, it needs to be maintained. All those who attain it, have to undertake to follow a programme of Continuing Professional Development. This is an extremely important commitment and should be taken seriously to maintain the status that individual students have achieved.

Achieving organisational Chartered status

Firms can achieve chartered status providing at least 50% of their executive directors/partners hold CII Chartered status (or a suitable alternative professional body) and at least 90% of customer facing staff are CII/PFS members.

Alternatives to CII titles

There are some designations that are relevant to discuss at this point as potential alternatives to the above route. The CFP (Certified Financial Planner) qualification is awarded by the Institute of Financial Planning. Again a three-step process is undertaken to achieve this qualification.

• The first 2 involve the student completing suitable basic and higher financial planning qualifications such as the CII’s certificate and diploma in financial planning.
• Providing the individual has at least 3 years relevant experience, the final step involves completion of a case study financial plan. This can either be completed on your own or with the help of a preparation day. If so wished, the individual can go on a 4 day, fast track course with completion of the case study at the end of it.

Advocates of this qualification say that it provides a highly worthwhile and practical route enabling individuals to write an appropriate financial plan through its main stages. However, some critics have stated that the qualification lacks the technical depth offered by the CII’s exams.In November 2007, the ifs School of Finance introduced its chartered title the Chartered Associate of the ifs School of Finance (CAifs). The CAifs title is not exam based but neither is it an easy way around the challenge of qualifications. It can only be gained by those who are already associates of the ifs School of Finance and who have 3 years’ relevant experience. To be an associate of this body requires completion of a bachelor’s degree in financial services from the University of Manchester. Few people however, in the financial planning sector would have achieved this qualification other than perhaps, people working for banking organisations. Its relevance throughout the sector therefore, will be limited.

We await the outcomes of the RDR and it will be interesting to see what the FSA finally confirm as minimum requirements for the Professional Financial Planner status in terms of qualifications. The drive towards higher standards of skill and technical ability can however, only be a good thing for customers in terms of their fair treatment and improvements to market efficiency.

Mike Goldsmith
Managing Director
Wizard Learning – www.wizardlearning.com

We have just finished the most recent phase of CII exams and as paraplanners exams play a vital role in increasing our technical knowledge whilst demonstrating our technical competence.

It is generally up to us to be the most technically qualified part of the industry and therefore as exams are important for us it is imperative that we understand how exams work.  This way we will be able to give ourselves the best possible chance of passing the actual exam.

The Wizard Learning team of trainers has prepared a short guide to preparing for and passing exams which they have allowed us to put on the site.  Don’t forget that you can get a 5% discount from Wizard Leaning by clicking here.

We hope that it will be of some use.

Passing any exam requires you to know and understand what level of ability is required of you on the day. It is one thing studying but you also need to have the appropriate technique to answer questions accurately whether in a multiple choice exam or a written paper.

To be successful first time, you need to prepare yourself thoroughly during the weeks leading up to the exam and for the day itself. The following guidance we hope will help you in that preparation:

1. Planning your studies

We all lead busy lives with many distractions! It is easy to leave your studies to the last minute but by doing so you place yourself at an immediate disadvantage. Equally when deciding on a revision plan, it is quite unrealistic to set yourself long hours of study over weeks and weeks as you will be unlikely to be able to adhere to such a schedule.

It is more practical to decide well before the exam how many hours you can truly devote to your revision and break up that time during each week to short bursts of effective study.

The examining institute provides an estimate of the recommended study hours for an individual new to the subject matter. This will give you a guide as to how long you should revise for. More experienced students are likely to be able to devote less time to their studies and still stand a good chance of passing – although you can probably never do enough!

2. Structuring your studies and using time effectively

The first step with studying many qualifications is to find out exactly what the examiners require from you. The CII and other institutes publish a syllabus for each of the subjects that they examine. This provides some detail as to what degree of competence candidates are expected to attain. Make sure that you use the syllabus to establish the level of depth you are expected to study to. Is it just a case of pure knowledge or is it a higher level of understanding? Do the examiners require you to be able to apply your knowledge and understanding in given scenarios? From here you can plan your approach to studying certain syllabus areas and the learning tools you will use.

One common mistake that many people make is to only read passively from a single set of study notes before taking their exam. They are then dumbfounded when they don’t pass as they are convinced that they had accumulated sufficient knowledge. Apart from being a really tedious way to revise for most people, it is also often only effective if used in conjunction with other ways of revising. Breaking down the information contained in study material into your own notes is often a very useful start towards success. However, these should not simply be the study material regurgitated, but an easy to read summary of the relevant chapter or section covered. Many people find that they learn well by summarising on paper what they have been reading as this action begins to stimulate other parts of the brain.

There is no right or wrong way to making notes other than they should ideally be clear and concise for the person reading them later on when revising. Many people find that the use of colours or highlighter pens (for example, on headings or key point summaries) enables essential information to stand out and be easily remembered. Others favour a more illustrative approach to their studies for example through the use of mind maps, diagrams, tables, flowcharts etc.

With an ever more busy and hectic lifestyle, we often find that what bits of spare time we have are only available when we are on the move. Pocket sized revision notes and key facts are available from some. These can ideally be read whilst using public transport for instance.

Another highly effective method of study that we recommend is used alongside the methods already discussed, is to practice with past exam papers and exam style questions. There is no substitute for actually tackling questions in a previous paper to get a sound understanding of the examiners’ requirements. Practicing with these tests is even more effective if done under exam conditions. Checking the answers to multiple choice papers will enable you identify the areas of the syllabus that you are strongest at along with those that need to be developed further. Checking written papers will help you actually understand the style and content of the answers that the examiners are looking for. Both types will help with refining your exam technique.

Wizard Learning’s system enables you to assess how you are progressing with your revision. As well as a comprehensive bank of multiple choice questions for each of the subjects we offer, we now have a wide range of case studies and exam style assessments for the CII’s Diploma and Advanced Diploma subjects. In addition, we offer a monthly PD facility with associated questions to keep you up to date with the latest developments in the industry.

3. Just before the exam

In the days leading up to the exam, try to manage your time effectively. On the one hand, you don’t want to overdo the studying, on the other; your last few days could be highly effective if managed properly.

At this stage, it will be unlikely that you can learn very much that is new. Therefore to undo the cellophane wrapping on your study book with a couple of days to go is being ambitious to say the least!

Try as far as possible, to revise in relaxed, quiet conditions and use your time in short bursts. Go over any revision notes that you have prepared or look at key headings to assist with memory recall. Then run through practice exam questions to improve technique and further embed what you have learnt. Remember to take regular breaks during this time.

Try and get enough rest just before the exam so that you are sufficiently refreshed and alert on the day. On the day itself, ensure before you leave, that you have your exam permit and the required identification. Take a supply of food and drink with you. This often helps maintain concentration. You will also need to take a supply of spare pencils, pens, highlighter pens and a ruler. In most exams, you will need to bring a silent, non programmable calculator with you. Arrive at the venue with at least half an hour to spare to ensure that any necessary admission administration is taken care of by the invigilators and to enable you to settle into your place comfortably.

4. During the exam

This is where all your practice and preparation comes into effect! Although it might not seem a lot, the examiners have given you plenty of time to answer questions adequately.
Have a brief flick through the paper and the questions being asked. Sub-consciously, this helps to start to bring information to the front of your mind. It also helps you to plan the order in which you are going to answer questions and how you will tackle them. As a suggestion, deal with those questions that you are most able answer. This gets marks “on to the board” and provides you with an incentive to tackle the rest of the exam positively. Leave those that are less clear to answer until later on in the exam when you have hopefully more time set aside.

Many candidates use highlighter pens to make key questions parts stand out. This is a good technique to get used to as it helps the mind concentrate on exactly what the question is asking. Always ensure that you read the question being set. This is especially important with the limited time that you have in answering written papers.

Make sure that you give questions the attention they deserve with the marks on offer.

Don’t take half an hour of a three hour 200 mark exam answering a question worth one mark even if you are an expert on the subject! Equally, don’t write one line on an answer worth 20 marks!

With multiple choice exams answer every question even if you feel that you are merely taking an educated guess! Make sure that you adhere to the examiner’s instructions with written exams and answer sufficient questions to gain maximum marks.  Try to give yourself sufficient time at the end of the paper to check through your answers. Alter those that you have misread or know that you have misinterpreted. This could give you some vital extra marks at the last moment. If you have done your job and answered a question to the best of your ability in accordance with the marking scheme, then leave it – you are unlikely to be able to improve upon it.

Best of luck!

There are so many exams and qualifications around these days that it is sometimes hard to work out which CFP people are referring to (should always be Certified Financial Planner in my book) and how many credits you actually need to get to Diploma level.  We also have the CII, PFS, IFS and IFP providing exams and qualifications that it is easy to get confused.  Our friends at Wizard Learning have prepared a very useful guide which you can download by clicking here.  We have also negotiated a discount for users of The Paraplanner and you can find out more about this shortly.

In coming months we will be focusing on education and development issues and have some exciting plans in the pipeline. In the meantime, we know how hard most of you work to improve your own knowledge and skills by studying for and taking exams from the wide range available to you! In order to recognise your achievements, we have set this page up for you to share your success with other paraplanners. It is also a good place to share any exam tips (or horror stories) from which we can all learn.

So, please feel free to add your own exam passes and stories by adding a comment below.