I have been involved with the CFP for over 25 years and have seen many common themes of the case studies that fail the assessment process. Having been a CFP case study assessor, trained assessors and adjudicated financial plan assessments between 2000 and 2015, I have assessed over 1,000 plans in that time.
Here are my top tips to avoid the common pitfalls when embarking on the CFP CISI L7 case study financial plan assessment.
Being CII Chartered Financial Planner already won’t save you time:
I regularly see people overestimate their abilities and believe that they can save time on the CISI L7 case study. Many CII Chartered Financial Planners believe that they can save 100+ hours because they are already chartered. Experience tells me that this is not true. Why? Because the case study requires you to evaluate and meet four client objectives all at the same time. CII exams do not test this; they tend to test one or two conflicting objectives but never four!
Using current rates for assumptions:
Assumptions are a tricky area to get your head around. I’ve written about my three-step process that I recommend setting them, namely:
1. Review history
2. Where are you now
3. What does the future hold (after all your plan is forward looking)
I regularly see a real lack of understanding between that forward-looking element and the financial plan itself. Even FCA says that regulated advisers should NOT rely on past performance, so why ignore the future element when steps one and two are past performance data?
Doing protection element of the plan first:
Some of the case studies state that the client’s biggest concern is protection in the event of death or long-term illness of one or both. What is written in section 17 of your case study is the CLIENT’S opinion only; it is NOT the CISI prescribing which areas that you should tackle first in the plan! I commonly see that those who tackle the protection area first often forget that it needs to be revisited a second time after the other objectives have been met. This is because the initial approach is to protect the client’s current income stream but then you will continue to spend and reallocate money to meet their other objectives. That then means that the income protection needs have changed and now your original recommendations won’t meet your changes. Instead, I recommend tackling the protection after the short term and retirement planning has been completed. You will then know how you are reallocating the clients’ money.
Brush up your estate planning technical knowledge:
I normally recommend tackling the estate planning section last. But by the time most people get to that point, they are often running out of energy. Experience tells me that most people then often rush the estate planning section and rely on their existing technical knowledge. The result is a virtual 100% failure rate of this learning outcome! I see a couple of common themes:
1. Treating unmarried couples as married and ignoring PETs and other gifts.
2. Believing that all IHT bills need to have a protection policy to pay the bill; you need to look carefully at the case study wording about that. In some cases, the clients are clear that they are not bothered about protecting the value of their estate upon death. In that case there is no need to recommend protection policies.
3. Inaccurate IHT calculations – I regularly see incorrect IHT calculations and when I challenge people, they tell me that estate planning is their speciality area! That’s very worrying.
Please, please brush up your IHT technical calculations and estate planning knowledge BEFORE starting your case study.
Not marking your financial plan before submission:
When I was assessing plans, I could easily tell which plans had been marked before candidates had submitted it for formal assessment. Here are the benefits of marking your plan before submitting it:
1. You catch all the typos! Typos make the assessors job much harder, and they can get annoyed with you if you leave lots in your plan. Why submit a financial plan for a client that is full of typos? Would you send it out like that to a real client? No. Then don’t do it for this assessment either.
2. You see all your inconsistencies! Your plan takes 150-200 hours to complete and you are likely to forget some of the nuances that you want to tell the clients. If your notes are very clear, this leads to paragraphs in your plan that appear to conflict. These inconsistencies mean that the assessor cannot CLEARLY see what you are saying. You will then fail the learning outcomes relating to those areas.
3. Following on from point three above, you might also fail other learning outcomes if your inconsistencies cause knock-on effects elsewhere in your plan. I see this happening quite frequently.
