Adviser anger at ‘flawed’ CII exam question on IHT

This is such a relief

I too sat this paper and reading this article has confirmed to me that I'm NOT after all an idiot. I read and re read the question and was questionning my own knowledge because I really was under the impresion that no IHT was due on a PET (which a gift to a Bare Trust counts as, which was what they were asking about if I remember correctly) unless death has occurred in the first 7 years from the date of gift. In the question summary, both clients were alive and well. I actually ended up writing a note to the examiner as I said it's impossible to calculate IHT on a PET unless you tell us if and when the gifting party has died and they hadn't. I shall wait and se what it does to my marks. I think we should get marks if we have answerd the question correctly, which in the circumstances for calculatiung the IHT on the PET was Nil! Especially if we say why there is no IHT, i.e. death has not occurred. How can a correct answer not get full marks, just becuase it was badly worded?

Posted by: Duncan Ellis

cii exam flaw AF1

I am so pleased to learn(or not) there was a mistake in the actual question. I spent ages trying to work out what the question was asking and kept re reading the quesiton, thinking I had missed the words 'on death'. I thought I had totally lost the plot and it did affect me for the rest of the paper. Even in the bit of spare time I had at the end I revisted the quesiton but kept drawing a blank! It is very unfair and unfortunate the CII did not get the questions suitably checked.

Posted by: susan tague

CII---always been dodgy

Ever since I've known them-30 years ago now, the CII seemed to me to be less accountable than it should be. It's attitude to and skills in education are questionable. For example I see colleagues whom the CII has failed in an exam not being given any useful feedback from the CII's examiners. I would rather see a professional body take over from the PFS-a proper one which set exam standards and oversaw ethical behaviour. I believe that if the FSA breaks up a professional body would be in a strong position to thrive. I think that such a professional body should be limited to IFA membership

Posted by: snooks

Other technical eerors by CII

I did some revision before my JO2 exam last month and I noticed a pretty basic error in one of the tests on the CII on-line 'revisionmate' service. The error was in question 10 re Chapter 3 'Investment and administration of trusts'. The question was: Which of the following are characteristics of a charitable trust that differentiate them from other trusts? (i) They are subject to the law on perpetuities. (ii) They can continue indefinitely. (iii) They will not fail. Choose one answer from: a. (i) and (iii) only. b. (ii) and (iii) only. Incorrect , syllabus reference 3.4 c. (i) and (ii) only. d. (i), (ii) and (iii). I answered (b) i.e. only (ii) and (iii) are correct because (i) is wrong - Charitable Trusts are NOT subject to the law on perpetuities. The Revisionmate system said I was wrong and that (c) was the correct answer, but it was not. (i) and (ii) cannot be the correct answer because they are contradictory. If a charitable trust was subject to the law on perpetuities, then how could it continue indefinitely? I brought this to the attention of the CII and they e-mailed me to say that I was right and that they had corrected the answer on the system. How does this kind of thing happen? Exactly who are the so-called 'experts' who set the CII questions and vet the revision system? It's not really good enough to see such fundamental errors when people are studying and revising for these exams. It's even more annoying to me that I had to point out such a basic error to the CII, as it endorses my own opinion that like most aspects of the RDR, these additional 'Diploma' exams are simply a pointless exercise in FSA job justification and exam fee generation for the CII. My taking and (hopefully) passing a couple of exams (the content of which would appear not to have changed much since I took my old AFPC exams) will not fundamentally improve the quality or depth of advice that I (like most experienced and professional IFAs) already give to my clients. Raising the bar is one thing, but exams that achieve nothing in real terms are a waste of time and money. What will the choices be in the next crop of CII exams when someone decides that Diploma level is not professional enough? D027 - Getting in and out of a car, G035 Eating using a knife and fork and P044 -Writing your own name and address? Ah well - Must go. I have got to fill an application form in for a job as a 'financial adviser' at my local Abbey Nationwide Bank of West Scotland branch (or whatever they are called these days). As I see it, those buggers in banking seem to be getting away with everything from topping up cash ISAs direct from client's current accounts, to selling with-profits bonds to blind pensioners. It may be unethical, but they do seem to have nice company cars, so if you can't beat em.......

Posted by: Nick Plumb

Cii Exams

I'm not surprised people think the Cii doesn't do their job properly. They say they are "not for profit". Thats the first joke. Then when you fail to pass an exam, they don't give feedback. The problem is with the examiners. They get paid pittance and simply can't be bothered to consider an answer. If it doesn't match the bullet points, you don't get enough marks. And as for their revision day workshops - a total waste of money. Actually a great fee earner for them! If you have any money sense, borrow material from friends who have done exams, do recent papers, pass the exam and don't ever bother with the Cii again. They have taken all of us for a ride for way to long.

Posted by: Harry

CII Professionals or Jokers?

I too sat the AF1 exam and must admit I was totally bemused by the question and how they could justify the marks. I did answer regarding the implications on death but just took it I had missed what they were looking for In addition to the exam I also attended a CII training day in London and the tutor was a joke when it came to any questions on Trusts. I have complained however although they acknowdged the e-mail and despite me chasing they have completely ignored me. Its a good job I dont run my business like they do theirs

Posted by: John Webb

CII & PFS

I have never understood why the CII don't actually have salaried technical staff considering the millions that they rake in. This would give the authors and trainers some accountability. They rely only on contractors who therefore have little accountability. The people involved will also not be technical trainers running their own business as they don't allow this. Therefore they never or are unable to react to technical queries that are raised on their material, they have a standard "push of" response.

Posted by: Jim

Too specialised

I have little respect for the CII mainly because they display an arrogant attitude to the industry, that comes through in their exam questions. One doesn't pass a CII exam by demonstrating one's knowledge, but by displaying one's knowledge of what the CII know, which is so often flawed. A good exam elicits the level of knowledge of the the examined, not the amount of uncritical reading they have achieved.Having explained my opinion on the CII I was therefore intrigued to read Nick Plumb's post, not specifically on the fact of the errors, which I tend take as axiomatic, but on the content of the questions. For some years I was employed by the Inland Revenue in what was the Estate Duty Office (later the CTO for any youngsters reading this), and Trust law was an important part of the job. Indeed it was necessary to pass exams in the subject . So when I left I can reasonably say that I had a decent knowledge of the subject. And I have even used Trusts in the implementation of financial planning in subsequent years! But never once in 40 years have I needed to refer to the perpetuities rule or even the structure of charitable trusts. If we had got to that stage in the financial planning process then that part of the equation would have been passed over to the solicitor, the expert in that area. What troubles me now, and has done for many years, is the introverted nature of teachers in this industry. They become so involved in the minutiae of their own subject, and so full of ego over their own knowledge, that they believe advisers are deficient if they do not approach the same level of irrelevant competence. Rightly or wrongly I have always seen an adviser as being significantly less knowledgeable than an accountant, or solicitor, or tax adviser in those particular subjects, but having a quality level of knowledge in all the disciplines so they can pull them all together at a level that is useful, in a planning mode, to the client. And the corollary of that is that the adviser accepts that once a higher level of expertise is required in a particular area other professionals are brought into play. Whilst I have met quite a few solicitors and accountants who thought they were good at financial counselling (mainly incorrectly) I have never met an adviser who pretends to be an accountant, solicitor, Hedge Fund manager, etc. The depth of many of these courses, and especially the Trust course, is way beyond what is necessary to be competent in providing decent advice to the level of client who would use an adviser (the likes of Bernie Ecclestone is unlikely to use an IFA a primary adviser because we do not have the knowledge or products to meet his needs). What advisers need is width not depth. We need to know the various types of Trust, their consequences and their taxation. I have seen poor planning because advisers do not know which trusts to use, but I have never come across a planning problem caused by the perpetuities rule. We do not need to know the finer points of legal structures. Neither do we need to know the finer points of taxation or accountancy because, in general, we are not handling the specifics; we are not dealing with the Inland Revenue. But we do need to know ALL the general structures, so we can use the appropriate ones. I suspect that this is a point that also goes over the heads of those in the FSA. Their insistence on higher and higher level exams is actually likely to provide less effective financial advice because advisers will become more and more knowledge orientated, narrower in their approach, and less solution orientated. How often have you come across a person who specialises in a certain subject putting forward that topic as the solution for everything from colds to mending car engines! I have no problem with the process of professionalism and exams. My objection is that too often the exams are not suited for the job, but are imposed by people who are driven by a different agenda. And I put both the CII and the FSA in this category.

Posted by: Glen McKeown

cii exams

Good luck to all in the resits. I find all of the exams through CII ambiguous, incorrect grammar with the questions tedious and long winded.I wonder if the literature warrants a re think - the amonunt charged should be more than enough to cover costs.

Posted by: b yeoman