Whether you are preparing for your exams, or simply want to keep your knowledge up-to-date, Professional Paraplanner’s Development Zone can help.
Every month, in conjunction with Brand Financial Training, we provide a series of questions from across the syllabus which aim to test your knowledge of the financial services market, as part of your overall self development training goals and exam techniques.
The following questions relate to examinable Tax year 24/25, examinable by the CII until 31 August 2025.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website.
We hope you find our Q&A useful in helping you achieve your qualifications.
QUESTIONS
1. Glen runs a small financial advisory firm in Bristol. He prefers to spend time generating income for the firm, rather than completing paperwork. Which of the following is his firm unable to contract out to a compliance consultant?
A. Remedial work.
B. Technical support.
C. Regulatory obligations.
D. File audits.
2. When considering the performance of equities over the long term, it is true to say that
A. risk has no relation to time horizon.
B. the longer equities can be held the better the chances of riding out downturns.
C. disasters such as war have no long – or short-term impact on equity portfolios.
D. equities have always outperformed every other asset class for all holding periods.
3. Steven is a higher-rate taxpayer and has received £2,000 interest from a savings account. Regarding the tax position of the interest, it is true to say that it will have been paid
A. gross and he will pay 40% tax on £1,000 with the remainder exempt under his personal savings allowance.
B. gross and he will pay 40% tax on £1,500 with the remainder exempt under his personal savings allowance.
C. net and he will pay 20% tax on the grossed-up amount.
D. gross and he will pay 20% tax on £1,500 with the remainder exempt under his personal savings allowance.
4. Harry, aged 25, inherits a flexi-access drawdown fund from his father Paul who died at the age of 60 without any dependents. If Harry wishes to purchase a nominee’s annuity, he should be aware that
A. this is only possible from undrawn funds.
B. the payments are always taxed as Harry’s income.
C. he will not be able to draw a pension commencement lump sum (PCLS).
D. he can only purchase a dependent’s annuity.
5. Kevin is employed and receives sick pay from his employer. This is paid at full pay for six months and then half pay for a further six months. In arranging an income protection policy, he will be able to take out cover based on
A. half pay for months 7 – 12 and full pay from month 13.
B. half pay from month 7 only.
C. full pay from month 13 only.
D. full pay from the start of the policy only.
6. The most important outcome of the fact-finding process is
A. completion of a printed questionnaire with full answers.
B. a clear understanding of the client’s goals and expectations.
C. gaining the client’s trust to allow them to express true facts.
D. obtaining all the ‘hard’ information and as many ‘soft’ facts.
7. An investment trust has a net asset value per share of 150p with a share price of 100p. It is therefore trading at a
A. premium of 50%.
B. discount of 33.33%.
C. premium of 33.33%.
D. discount of 50%.
8. Which arrangement is classified as a pre-funded care plan?
A. Long term care bond.
B. Immediate care annuity.
C. Equity release mortgage.
D. Health cash plan.
9. Ken and Graham are both in their 70s and have plenty of income to meet their day-to-day needs; they would like to release a lump sum from their property to carry out some home improvements. They do not wish to give up ownership of their home and would like the amount they owe to remain constant. Which of the following schemes are most likely to suit their needs?
A. A full home reversion plan.
B. An interest-only mortgage with repayments.
C. An interest-only mortgage without repayments.
D. A shared appreciation mortgage.
10. Paddy has entered into an individual voluntary agreement with his creditors. At the end of the agreed period how does the insolvency practitioner share the accumulated amount?
A. It is split between the creditors equally.
B. It is paid to the creditors in proportion to the loans involved.
C. The oldest debt is paid first and the latest is paid last.
D. The debts are paid according to the size with the smallest being paid first.
