Private Client Investment Advice and Management
PCIAM December 2016 exam support
The PCIAM is examined by a three hour written exam and the next exam is Thursday 8 December.
And this exam follows a well-trodden path; it has used the same format and same structure and similar questions for many years.
There are 100 marks.
Section A represents 40% of the marks (40) and consists of ten compulsory short answer questions.
Answers should be bullet-pointed to provide relevant points to answer the (exact!) question set (including ‘show all your working’) and these questions are VERY much like the AF4: there will be knowledge, understanding an analysis style questions. Get the details down, show your workings step-by-step, exactly as you would in any written CII exam.
If you are continuing on to the PCIAM exam from AF4, you will have a reasonable knowledge of the syllabus and you will be able to answer most of the questions well.
This is a good section to start the exam with.
It gets points on the board early, there will be some ‘low-hanging fruit’ and you can harvest your marks.
You can only get a maximum of 40 marks in this section, so give it 40% worth of your time and no more.
Section B represents 20% of the marks and is one essay from a choice of three
This is an ‘’essay’’ question/answer worth 20 marks.
The good news is that with a reasonable level of knowledge (your AF4 Investment Planning studies) and an understanding of the exam technique (see further), you can get a good score here….exam technique is key and learning/practicing how to write a critically evaluating essay will ensure you get some decent marks.
We’ve provided you with some great background on how to write a good essay in your PCIAM online course – and here’s a quick summary:
1. Write an introduction paragraph and put the question being asked into context – tell them what you are going to tell them.
Try and answer the question in one sentence.
For each paragraph of ‘content’:
2. Set out your data from any actual/real examples; provide an analysis of the pros and cons of the subject under question and illustrate any perceived/actual strengths and weaknesses…in your opinion…with fact/data/analysis on every point you make.
Start each paragraph with a little more detail on the answer you gave in your introduction.
3. Provide a conclusive/significant summary – this is where you conclude your discussions of the various points and paragraphs of analysis to finish with a description of anything significant, any impact, any solutions from the analysis.
Even if you are short of time at the end (very likely, as there is a lot to get down in 3 hours), you should outline your essay framework and plan and get some credit from the examiner for your structure and plan.
Remember: answer the question asked, not the one you wanted to be asked or you thought was being asked. When you are asked to ‘critically assess’ a statement/subject you will be expected to put forward both sides of the argument, giving only one perspective will only get you one side of the marks.
Use the key words and phrases from the question being asked and structure your essay content around those key areas – remember, structure it properly, answer the question being asked and you will get decent marks.
I would give yourself about an hour for section A; half-hour for section B and about hour and half for section C; seriously think about doing section A first, then section C and finally section B.
This is probably the question that you are less familiar with – so, practice, practice, practice with answering old essay questions. If you are coming off the AF4 study you will NOT need to do much more study; it is practice, practice, practice with the exam questions which will be the most effective study.
We’ll be providing you with much more guidance on this in our Investment forum: https://expertpensions.co.uk/forums/forum/investments-exam-discussion/
Section C represents 40% of the marks and is one compulsory question based on a case study.
As financial advisers/paraplanners this is right up your street!
I’d even think about doing this section first. When I sat the exam I did this section after section A; section A of the PCIAM was the warm-up, section C was where you pick-up the marks that will get you a pass. Unlike many of those who sit this exam, you actually give advice and actually deal with clients.
Section C is a case study scenario with details about their objectives and aims, attitude to risk, existing portfolio and arrangements such as pensions, protection plans and inheritance. You are then asked a number of questions around the scenario.
There is one question type that is critical here: analysis of the client’s portfolio.
Good news – you do this every single day!
Bad news – it is an exam and the clock is ticking and funny things happen under those conditions….so, have a plan: help yourself by remembering a few key points about ANY investment portfolio:
1. What is the strategy of the current portfolio and how does it relate to the client’s needs
2. Outline the investment management style,
3. Outline the asset allocation and how it relates to benchmark
4. Summarise the risks, time horizon, accessibility/liquidity and taxation of the investments being used to deliver client’s objectives – and whether they match?
5. Finish with an assessment of how the portfolio could be adjusted to suit the client.
This is a very practical exam and you will be required to demonstrate up-to-date knowledge and the ability to apply that knowledge into the client circumstance – this is exactly what you do on a daily basis! The PCIAM is made for financial advisers.
If asked to make recommendations, be very specific – exactly as you would in your suitability letters:
“I recommend that he effects this plan so that he can obtain higher rate tax relief of 40% on his pension contribution. He does not need to access these funds until he wishes to retire at age 60. He will have tax advantaged/tax-effective growth within the fund. He can also draw up-to 25% of his fund at retirement, or from an uncrystallised flexible lump sum, free from income tax and capital gains tax from age 55. The balance of the remaining funds can be used to provide a taxable income or a series of lump sums at the level required to meet his income or capital objectives’’
The next exam is Thursday 8 December and this exam follows a well-trodden path; it has used the same format and same structure and similar questions for many years; 8 weeks to practice as many questions as possible…..and practising the different types of questions.
All the best for now.
Over the next weeks we’ll keep you up to speed with more guidance and more tips.
We have just updated our online PCIAM course and we are open for business!