I've been helping students through their DipFA qualification for almost two years' now and this article is designed to share all the best practices, tips and strategies that can help you achieve a really good mark in this challenging exam.
I'm going to share with you various tips that have come from examiner's reports, students I've worked with over the years and share with you a really good structure that can help you prepare.
Firstly what is the final exam all about?
How the exam works?
It's a 3 hour written, soon to be typed, exam where you need to digest a case study beforehand and then create a carefully written report to your fictional client.
The case study is delivered to you in advance, about two weeks. You have time to prepare, read up in areas of weakness, put together some figures to back up your report and write it completely in advance. And you should too, why not, that's why they send it to you beforehand.
On the day of the exam, you'll get a couple of wobblies, ie some minor changes to the exam paper that might change your report slowly, but if you've done your preparation well enough, these last minute changes will not cause you too many problems.
Picture your client
The case study will be as real as possible, there will be some anomalies and these need to be verified. However you should treat it as a real person and write the report to this person, not the examiner, although you'll want to impress him or her to gain marks. Care with too much impressing as you might fall foul and the examiner may mark you down for over doing the technical aspects.
Plain language is so important, bear in mind who the client is and write for them to understand. Picture them sitting down with a cup of tea with their feet up, reading your report, and trying to make head or tail of it as they sip their brew.
The marking system
It's important to appreciate the marks you gain from the paper so you can focus in the right area.
You get a total of 150 marks –
- 10 for the introduction, summary
- 10 for calculating affordability
- 30 for presentation, language, style
- 100 for your options, recommendations and advice.
So spend some time on a well crafted introduction, calculations and style and you'll already be on for 50 marks, and you only need 75 to pass.
A time honored structure
- Purpose of report
- Synopsis of situation
- Summary of objectives
- More information needed
- Attitude to Risk
- Affordability Assessed
- Immediate improvements / quick fixes
- Next Steps
The structure explained
Begin the report by writing to the client and address him or her by name and talk in the first person eg "Brian we talked about your desire to purchase a home abroad and to do this I will be looking at …."
Agree the purpose of the report and this should link in with its objectives and aims. Talk about the information gleaned, but be brief here, do not just go repeating what's in the Factfinds. Summarize to suit your own words and language to match the client
It's here you may wish to start making some assumptions so that you can agree his objectives clearly. This may be followed by some questions to ask him if you need more information or to confirm or clarify something. Assumptions are fine, as long as you know how these are to be clarified or you merely ask the client to confirm. I know in real life you would not make any assumptions but do you?
Only when you and your client know where you're going can you really get into the report and decide the action for him to take.
Here you can gain some handy marks for showing your knowledge of Income Tax and National Insurance to work out how much money the client can afford to pay for your regular income product you're going to recommend.
Do not space out your calculations like a textbook; instead write them out for the client to understand. Narrate every line of figures so they know what you mean and can follow.
Be accurate, obviously, you'll get marks for the right answer. But you'll get more marks for the workings out along the way. It's just like doing your maths exams at school.
Immediate improvements / quick fixes
There may be some really quick things that might improve your customers situation and do not merit a heading in the recommendations section.
For example switching investment name from husband to wife to minimize tax or paying off a credit card or other high interest loan with money from deposits.
This section is worth 100 marks and is the meat of the whole report. Break down your recommendations into chunks and allocate time according to how important they are. Try to decide how many marks the examiner may allocate to each section and then spend relevant time on each one.
Try to put them in priority order as this is good financial planning practice.
Put down the options to the client, explain them, and talk to the client as you go.
Make your recommendations and justify why, use real figures where you can. Do not leave it open for the client to decide and too many "we'll decide these when we meet again."
You want to earn marks with a firm recommendation with a justifiable reason why.
If you're not qualified to advise, pass them onto someone who is or another professional such as a solicitor.
Think of your five W's – what, who, how, why and when, for example
- What is the advice
- Who is involved
- How will you make it work?
- Why do they need it
- When should you start it?
The final part of the report is the next steps section. Here you'll want to wrap things up, give a clear direction for the client to know his next steps, confirm your review arrangements, fee structure maybe.
Some final tips
Keep an eye on time – 3 hours is a long time when you're sitting on the beach doing nothing but goes really quickly when you're enjoying yourself. Seriously though, plan your time and make sure you finish the report. You get most marks in the first few minutes of any section, so you need to at least start every section.
Presentation and structure. It needs to be clearly laid out and look like a proper professional report with headings, sub headings. Maybe tables, a series of bullet points, graphics, illustrations. Why not, after all it's for the customer, so maybe a risk graph might work better than a wall of words. Most people, nowdays, are visual in nature and pictures can paint a thousand words.
All technical terms explained. Do not throw in a technical term, without explaining it, just do not. Anything slightly complex will need explaining in words the customer can understand. Beware the TLA – three letter acronyms – our world is full of them, you know what they mean but does your client?
Less is more. Good communication is powerful and uses few words, just take a look at posters and leaflets; they're conservative with their use of words. Why waffle on when a short concise statement will do. Beside you only have 3 hours to write.
Some useful ideas and tips here, I hope you agree. Remember to do as much preparation beforehand to maximize your success in the exam. Good luck