With pensions transfer values looking increasingly attractive to retirees, demand is at an all time high. But with ongoing client-suitability concerns and a lack of appetite from many firms to carry out transfers from DB to DC schemes, training demands are on the rise too.
CII qualified advisers lead this market, with some 7,000 CII SPS holders qualified to provide pension transfer advice. To help those looking to join these ranks, the CII is increasing its support.
Existing FCA appropriate unit ‘AF3’ is being split into two new Level 6 units: one focused solely on pension transfers – ‘AF7’ Pension transfers’ – the other – ‘AF8’ Retirement income planning – covering broader pension planning issues.
The final AF3 exam will be held in April 2018 and with three exam sessions in between now and then, this gives those working towards AF3 plenty of time to complete the unit.
AF7 in more detail
| Study hours | Exam format (sat twice-yearly) |
Nominal pass mark | CII credits & level | Study text availability | First exam |
| 100 | 2 hour exam comprising 3–4 compulsory written short answer questions and 2 case study-based questions. | 60% | 20 – Level 6 | Jul 17 | 10 Oct 17 |
AF7 will enable candidates to:
- Explain fundamental aspects of the pension transfer process;
- Explain the implications of transferring between different types of pensions; and
- Advise on pension transfers in a range of client-specific circumstances and scenarios.
New Certificate in Pension Transfers
At the heart of these developments is a new qualification – the Level 4 Certificate in Pension Transfers. This is made up of new Level 6 unit AF7 and three existing Level 4 units: ‘R01’ Financial services regulation and ethics’, ‘R02’ Investment principles and risk’ and ‘R04’ Pensions and retirement planning’.
The Certificate provides the in-depth knowledge and practical skills needed by anyone wanting to advise on pension transfers in this post-pensions freedom era, and is designed for advisers and non-advisers.
By including all the relevant Level 4 technical knowledge, the Certificate satisfies the FCA’s qualification requirements for advising on pension transfers without the need for a pre-existing Level 4 qualification to be held. This enables Paraplanners working to become advisers, for example, to begin specialising in pension transfer advice.
AF7-only for Diploma holders
Advisers holding the either the CII Diploma in Financial Planning or the CII Diploma in Regulated Financial Planning who are looking to become pension transfer specialists, simply need to complete AF7.
Although those holding the Diploma in Financial Planning won’t be awarded the full qualification if all three R0 units aren’t also held, they will satisfy the FCA qualification requirements for advising on pension transfers (FCA approval is expected in February).
No change to the status of AF3 and G60
It is important to note that the introduction of new unit AF7 and the Certificate in Pension Transfers will not impact the FCA ‘appropriate exam’ status of these pre-existing units.
Equally, AF7 and AF3 (or G60 come to that) are not what we refer to as ‘a barred combination’. This means those who pass both units will receive the full 50 Advanced Diploma credits that they jointly award.
To find out more
Full details of ‘AF8’ Retirement income planning will be released during mid-2017, with study material and assessment available from October 2017.
