CF5 Advice

Credit-Crunched

I too failed i asked for my percentage and i acheived a whopping 51 percent. I really thought i ahd nailed the exam paper so i am pretty gutted. I am now going to sit cefa4 and cross qualify as in my area the next cf5 exam is october and i want to get moving on the j0 exams. any ideas on if this is wise, i have cf1-4 and if i get cefa4 can i then claim full fpc qualification?

trophycabinet

Thats really bad luck.

My advise would be to resit the cf5 exam, you were only 4 percent away and on a different paper you may well have passed.

My next available date for cf5 in my home town is october, so had a look at other locations and found some in june and july. My advise would be to just resit at another location as soon as you can, which will be much more productive than waiting till october. You could then get a head start on the dreaded J0 exams about october/nov time without the hassle of revising for the cefa.

runmichellerun

Hello. I took CF5 for the first time in July and found out today that I passed. I had been reading this thread throughout studying and found the following tips were absolutely essential:

1. Don't bother with the coursebook. I only read one chapter, which didn't help me at all. Buy the case study book instead and practice, practice, practice.

2. If you don't know the answer to the question they're asking you, leave it till you've finished the questions you DO know how to answer, then think about it at the end if you have time.

3. Putting the portfolio together will take the longest amount of time of all questions in the exam. Make sure you leave plenty of time to do it (I was rushing towards the end, and missed a couple of vital points which I thought afterwards might have cost me the exam)

4. Make sure you practice writing lots before hand as two hours of writing when you're only used to typing can be a killer!

Hope that helps.

Myrmidon_J

I thought I'd dig up this old turnip, as I'm officially "bricking it" at the prospect of taking my (CF5) exam tomorrow.

I scored between 91-95% on CF1 through CF4, but this one has me baffled on so many levels!

I have the CF5 course book, which isn't nearly as helpful as the CF1-CF4 books... I've also got four or five past papers, and the 'model answers' to the portfolio questions are just ridiculous.

In the one I just attempted, it stated clearly in the case study that the clients did not want to invest in any insurance bonds. And yet, in the 'model' answer: an (insurance) Guaranteed Income Bond. Not only is this contrary to the stated wishies of the clients, tax is (deemed to be) paid at 20% - whilst one of the clients is a non-taxpayer!

In the same case study, the client states that he wishes to "maximise" his pension contribution. And yet, in the model answer, the contribution is £8,000 short of the maximum - allowing for all tax reliefs, etc.

The clients want to maximise tax-efficiency, and yet the model answer includes income generated from a property fund, liable to (non-reclaimable) tax at 20% - where a UK Equity Income fund (also available) pays just 10% on a higher yield.

Aaaarrrggh!

Does anyone know how much flexibility there is in the answers? I'm not ignorant enough to assume that there is only one answer, or arrogant enough to assume that I know everything, but come on!

Am I supposed to ignore the case study entirely and make !!!! up? That's what they seem to be implying...

(Another issue: one mock paper has the model answer quoting income from a standard deposit account gross (for a non-taxpayer, as, clearly, they can fill in an R85 form), whilst another paper has the model answer quoting income from the same standard deposit account net - for a non-taxpayer!)

Please, someone give me a free confidence boost?

dunstonh

In the one I just attempted, it stated clearly in the case study that the clients did not want to invest in any insurance bonds. And yet, in the 'model' answer: an (insurance) Guaranteed Income Bond. Not only is this contrary to the stated wishies of the clients, tax is (deemed to be) paid at 20% - whilst one of the clients is a non-taxpayer!

Whilst historically, guaranteed income bonds used to be available in the life assurance tax wrapper, more recently they have been available in unwrapped form or via the ISA tax wrapper.

In many ways, it would be nice to have the life assurance tax wrapper used again as it would effectively be tax free for basic rate taxpayers. I seem to recall it was around 1996/7 ish that HMRC altered the taxation on structured products in the life assurance wrapper. The early ones after the change had to have a longer term. From memory it went to 6 years minimum.

In reality, you are never going to get a client come to you and say "I dont want to use the life assurance tax wrapper". So, the question saying he doesnt want to use it just shows the lack of reality. However, the objective in the question is for you to think of other tax wrappers/products by ruling one out.

In reality, if the life assurance wrapper was suitable and was ruled out by the client you would have someone wanting to transact against best advice. I would love to see the exam board look at the realities of the compliance requirements of dealing with an insistent client (against best advice).

Does anyone know how much flexibility there is in the answers? I'm not ignorant enough to assume that there is only one answer, or arrogant enough to assume that I know everything, but come on!

Its not so much your answer but the way you answer. Indeed, exam technique accounts for far too many points in these exams. Give your reasons for elimination and inclusion and dont worry about variences. Also, assume generics. Just because you know xyz company offers a product that fits the need, if it is not within the generic specifications of a type then dont mention it.

(Another issue: one mock paper has the model answer quoting income from a standard deposit account gross (for a non-taxpayer, as, clearly, they can fill in an R85 form), whilst another paper has the model answer quoting income from the same standard deposit account net - for a non-taxpayer!)

They may have been looking for the answer that by default, the interest is paid net and you have to fill in the R85 to get it paid gross.

Please, someone give me a free confidence boost?

I have stuck the CII exams but assume that the CEFA one is similar.

Always try to find an NS&I solution first. Remember to total the portfolio (yes, you get 1 point for putting Total £xxxx / 100%" at the bottom of the table. Be heavy on the cash. Stick to generic product types and see if you can get some help on exam technique. i.e. layout and how they want to phrase an answer to a certain question. With the CII exams, when they use the term "state" as in "state what you consider.." that means list in bullet point form

Myrmidon_J

dunstonh wrote:

Whilst historically, guaranteed income bonds used to be available in the life assurance tax wrapper, more recently they have been available in unwrapped form or via the ISA tax wrapper.

This would make the question a great deal more interesting (and complex). In the product list supplied, however, the description read:

Insurance guaranteed income bonds.
Note to candidates: these are insurance-based products, rather than derivatives-based or so-called "precipice bonds."

Whilst the case study stated:

"They do not wish to invest in any insurance bonds."

And the model answer included:

Axis Insurance 5 year GIB: £37,735

I mean, Jesus tap-dancing Christ! :mad:
Am I missing something incredibly obvious here?

You're quite right that the test is somewhat divorced from reality (negating an entire tax wrapper apparently for no legitimate reason), but I was nevertheless assuming that it wouldn't be quite so absurd!

They may have been looking for the answer that by default, the interest is paid net and you have to fill in the R85 to get it paid gross.

Again - this, I could understand.

Instead, in one answer, they only gave the gross amount, and in another, only the net amount - with no mention of the R85 form!

Gah.

I think you're right about exam technique. I'm going to imitate the model answers (in terms of structure) as best I can, and obviously make sure to read the question. My timing is usually pretty good - as a history graduate, I've written 17 sides of A4 in a two hour exam before now!

Thanks for your advice. (Or is it for discussion purposes only? )

dunstonh

Am I missing something incredibly obvious here?

No. That is a bad question/answer. I would have put in my answer that I felt the insurance GIB was suitable as it ...list the needs it matched... but as they did not want to invest in any insurance bonds I ruled it out on that basis (the exam board are not interested in compliance requirements so dont go there).

Thanks for your advice. (Or is it for discussion purposes only? )

Depends if you pass

Myrmidon_J

Well, that was interesting...

May have passed; may have failed totally.

10% of the marks were in respect of NS&I Children's Bonus Bonds. I mean, what? Still, 15% of the marks were for what I considered to be "very easy" calculations...

We'll see. (And I'll post the result!)

Aegis

Myrmidon_J wrote: »

Well, that was interesting...

May have passed; may have failed totally.

10% of the marks were in respect of NS&I Children's Bonus Bonds. I mean, what? Still, 15% of the marks were for what I considered to be "very easy" calculations...

We'll see. (And I'll post the result!)

I'm glad I was sitting J06 rather that CF5 today then! They didn't throw out any particularly obscure topics today.

Myrmidon_J

Aegis wrote:

I'm glad I was sitting J06 rather that CF5 today then! They didn't throw out any particularly obscure topics today.

Aren't you the lucky one?
Hope you passed.

I think exams are, to an extent, a bit of a lottery...

Post your result!
(In seventeen months time... How long does it take to mark a paper? :mad:)