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28 May 2020

For Professional Paraplanner’s TDQ (Training, Development and Qualifications) series, we have teamed up with key support providers, such as Brand Financial Training, to provide our readers with the very best in training, development and exam support.
This series aims to provide you with valuable advice and guidance materials to help you achieve your training goals, perfect your exam techniques and test your knowledge of the financial services market.
The following 10 questions, which can also be found in our February 2020 issue, relate to examinable Tax year 19/20, examinable by the CII until 31 August 2020.


These questions relate to examinable Tax year 19/20, examinable by the CII until 31 August 2020.

1. The term ’mental accounting’ refers to a client who:
A. can calculate their net asset position.
B. has a different attitude to risk in respect of different objectives.
C. has a preference for visual data as opposed to verbal explanations.
D. has capacity to grasp stochastic modelling and the use of probability techniques.

2. Fred and Nancy have a Child Trust Fund for their 11-year-old daughter as well as holding a Cash ISA and a Stocks and Shares ISA. They are looking around for better providers and have asked you for advice as to the type of transfer they can do. Which of the following would they be unable to do?
A. The Child Trust Fund to a Cash ISA
B. The Child Trust Fund to a Junior ISA
C. The Stocks & Shares ISA to a Cash ISA
D. The Cash ISA to another Cash ISA

3. In what circumstances might Fred’s conventional lifetime annuity amount fall from that paid in a previous year? Tick all that apply.
A. Fred has just married.
B. Fred chose a with profit annuity at outset.
C. Fred chose an annuity linked to RPI.
D. Fred has reached the end of the guarantee period.

4. Tim is in a partnership with Nigel and they have agreed to set up a buy and sell agreement. The associated life assurance policies should be written as:
A. own life policies in trust for the other partner
B. own life
C. life of another
D. own life in trust for their dependants

5. Which of the following is specifically exempt from the Consumer Credit Act 1974?
A. Building societies
B. Debt restructuring services
C. Credit card issuers
D. Payday loan companies

6. How do you calculate a company’s dividend yield?

7. Which type of bottom-up active management style aims to capitalise on existing trends continuing?
A. Value
C. Contrarianism
D. Momentum

8. Under what circumstances will insurance companies offer higher annuity rates for “impaired lives”?
A. When the annuitant is unable to perform a number of Activities of Daily Living
B. When someone has been rated when proposing for life assurance
C. When a joint annuity will not commence until after the first death
D. Where the medical condition or the lifestyle of the annuitant signal a shorter than average life expectancy

9. Rob is applying for a mortgage to buy a commercial property. He should be aware that it will:
A. not be a regulated mortgage contract
B. be classed as a business loan
C. be treated as other regulated mortgage contracts
D. be classed as a lifetime mortgage

10. If a local authority regards unpaid care costs as a debt and looks to recover them through the courts, what is the maximum debt recovery period?
A. Two years
B. Three years
C. Four years
D. Six years

Professional Paraplanner