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How to Pass the Final Exam of the DipFA
I have been helping students gain the 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 grade in this challenging exam.
I’m going to share with you various tips that come from reports from examiners, students I’ve worked with over the years and share with you a really good structure that can help you prepare.
First of all, what is a final exam anyway?
How is the exam going?
This is a soon-to-be-typed 3-hour written exam where you have to pre-digest a case study and then create a carefully written report for your fictitious client.
We deliver the case study to you in advance, approximately two weeks. You have time to prepare, read up on areas of weakness, put together some numbers to support your report, and write it in full in advance. And you should, why not, that’s why they send it to you first.
On the exam day you will get some complications viz. some subtle changes to the exam field that might change your report a bit, but if you’ve prepared well enough, these last-minute changes won’t cause you too much trouble.
Imagine your customer
The case study will be as real as possible, there will be some anomalies and these should be checked. However, you should treat him or her as a real person and write the report to that person, not to the examiner, although you will want to impress him or her in order to gain marks. Be careful with too much enthusiasm as you may make a mistake and the examiner may judge you for overdoing the technical aspects.
Plain language is so important, keep in mind who the customer is and write in a way that they will understand. Picture them sitting with their feet up over a cup of tea, reading your report and trying to figure out if they’re sipping their brew.
It is important to appreciate the grades you get on paper so that you can focus on the right area.
You get a total of 150 marks –
- 10 for introduction, summary
- 10 to calculate affordability
- 30 for presentation, language, style
- 100 for your options, recommendations and tips.
So spend some time on a well-crafted introduction, calculations and style and you’ll already score 50 and only need 75 to pass.
A time-honored building
- Purpose of the report
- Synopsis of the situation
- Summary of objectives
- More information is needed
- Attitude to risk
- Estimated affordability
- Immediate improvements/quick fixes
- Next steps
Begin the report by writing to the client and addressing them by name and speaking in the first person, e.g. “Brian, we’ve been talking about your desire to buy an apartment overseas, and for that I’m going to take a look at . . .”
Agree on the purpose of the report and this should relate to its aims and objectives. Discuss the information gathered, but keep it brief, don’t just repeat what’s in the findings of fact. Summarize it in your own words and in language that suits the client
This is where you might want to start making some assumptions so that you can clearly agree with his goals. This can be followed by a few questions to ask if you need more information or if you want to confirm or clarify something. Assumptions are fine as long as you know how to clarify them or just ask the client for confirmation. I know I wouldn’t make any assumptions in real life, but would I?
Only when you and your client know where you’re going can you really dig into the report and decide what it needs to do.
Here you can get some useful points to show your knowledge of Income Tax and National Insurance to work out how much money a customer can afford to pay for your regular income product that you will recommend.
Don’t lay out your calculations like a textbook; instead, write them so the customer can understand them. Narrate each line of numbers so they know what you mean and can follow along.
Be specific, obviously you will get marks for correct answer. But you’ll get more points for working on the road. It’s like doing math exams at school.
Immediate improvements/quick fixes
There might be some really quick things that could improve your customers’ position that don’t deserve a headline in the recommendations section.
For example, changing the name of an investment from a husband to a wife to reduce taxation or paying off a credit card or other high-interest loan with money from deposits.
This section is worth 100 marks and is the core of the entire report. Break your recommendations down and allocate time based on how important they are. Try to decide how many marks the examiner might assign to each section and then spend an appropriate amount of time on each.
Try to prioritize them as this is a good financial planning practice.
Write down the options for the customer, explain them and talk to the customer.
Make your recommendations and justify why, using actual figures where you can. Don’t leave the client open-ended and too “we’ll decide when we meet again.”
You want to get reviews with a solid recommendation for a legitimate reason.
If you are not qualified to give advice, refer them to someone who is or another professional such as a lawyer.
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?
The last part of the report is the next steps section. This is where you’ll want to wrap things up, give the client clear direction so they know their next steps, confirm your review arrangements, perhaps a fee structure.
Some final tips
Watch your time – 3 hours is a long time to sit on the beach doing nothing, but it goes by very quickly when you’re enjoying yourself. But seriously plan your time and make sure you complete the report. You get the most marks in the first few minutes of any part, so you should at least start each part.
Presentation and structure. It should be clearly defined and should look like a real professional report with headings, sub-headings. Maybe tables, 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 these days are visual and a picture can say more than a thousand words.
All technical terms are explained. Don’t throw in a technical term without explaining it, just don’t. Anything that is a bit complicated should be explained in terms that the customer can understand. Beware of TLAs – three letter acronyms – our world is full of them, you know what they mean, but does your customer?
Less is more. Good communication is powerful and uses few words, just look at posters and flyers; they are conservative in their use of words. Why bother when a short concise statement will suffice. Also, you only have 3 hours to write.
Here are some useful ideas and tips, I hope you agree. Remember to prepare as much as possible in advance to make your exam as successful as possible. Best of luck
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