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CFP® professional competency exam

Examiner feedback: February 2014 exam

Note from the FPI: Answers to the question papers are normally not released and going

forward question papers and memoranda will not be released at all. The FPI Certification

Department is however of the opinion that releasing the latest paper with some guidance

notes on how to answer a typical Professional Competency Exam question will render much

more benefit to candidates going forward. Not all the questions to the February 2014 paper

will be released and these questions below have been selected for release.

Case study 2: Investment planning (Alex Ngcobo)

CLIENT OVERVIEW

Alex Ngobo (34) is a marketing manager with a large retail group. His taxable income for

the 2013/2014 tax-year amounts to R254 000. He is single, but has a daughter (10) from a

previous relationship whom he supports by paying a monthly maintenance amount to her

mother.

Alex’s uncle died during 2013 and Alex was surprised to find out that his uncle had

bequeathed a cash amount of R2 500 000 to him. The executor contacted Alex in early

February and indicated that since the estate is almost finalized he can expect payment of

the amount by the end of February.

Financial planning components covered in question

Amount of marks included in question

Type of Question

Marks allocated

Investments 17

Knowledge 6

Financial Management 2

Comprehension 0

Retirement / EB 0

Application 7

Estate planning 0

Analysis and synthesis 6

Risk planning 0

Evaluation 6

Tax planning 6 TOTAL 25

Health care benefits 0

Ethics and regulatory environment 0

TOTAL 25

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Alex grew up in a low-income household and had to work throughout his time at university

to pay for his tuition and associated fees. He would thus not wish to sacrifice any portion of

the funds on unnecessary fees, but he understands that he would have to take on an amount

investment risk to achieve growth. He just feels he does not want to take any more risk

than required to achieve his objective.

He plans to earmark the funds for the purchase of a house at age 40, i.e. in 6 years’ time.

He would like to have an amount of R5 000 000 available at that time for this purpose.

Should he die before that age he would like the investment to be available to his daughter

in the most cost-effective and expedient manner.

He received an above-inflation salary increase at the end of 2013 and would thus like to

contribute R750 per month on a debit-order basis to the investment as well. He does not

want to commit to an escalating contribution as he is unsure about the level of future salary

increases.

Alex consulted two independent financial advisers during January, requesting proposals

regarding the investment of the legacy. The two advisers presented him with the following

two options - each as being the most suitable to Alex’s needs:

Option 1: Stanlib Equity Fund and the Stanlib ALSI 40 Fund (investment split equally)

Initial advice fee: 0%

On-going advice fee: 0.75%

Option 2: Coronation Balanced Defensive Fund and the Prudential Inflation Plus Fund

(investment split equally)

Initial advice fee: 0%

On-going advice fee: 0.75%

The following attachments are provided:

• Fund fact sheets for all four funds above

• A comparative analysis you conducted in respect of the two investment options

QUESTION [25 marks]

When providing advice on investment options, one needs to decide on the most suitable

investment vehicle, as well as the most suitable investment fund for the proposed

investment.

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Write a report to Alex that includes the following:

• An evaluation of the two investment options in terms of suitability for Alex’s

needs, as outlined above; make specific reference to fees and risk and return;

(12 marks)

• An evaluation of the most suitable investment vehicle for the investment in terms

of suitability of Alex’s needs, considering direct and Longterm Policy options;

(6 marks)

• Your advice as to the most suitable vehicle and investment fund option for Alex

(5 marks)

Your report may not exceed 5 (five) pages and detailed calculations are not required.

Marks will also be allocated for structure, logic, flow and appropriate language usage.

Only 5 pages will be marked.

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Aspects to consider when analysing the question and the facts related to Alex:

• There is no one correct way in which the question could be approached.

• This type of scenario is typically what a CFP® professional should be able to

handle in practice.

• This is a professional competency exam, not a post graduate qualification

exam. Candidates will be tested against the FPI Competency Profile in terms

of bringing the knowledge, skill and abilities expected from a CFP® professional

together in a question paper. Refer to the FPI Competency Profile Collection

matrix (pg 6), Analysis matrix (pg 7) and Synthesis matrix (pg 8) for the specific

fundamental financial planning practices that will assist in deciding which

approach to follow in answering a question like this. Please download a copy of

the FPI Financial Planner Competency Profile for ease of reference.

• When considering suitability of advice, it is critical to link the advice

specifically to the client’s objectives, needs and risk appetite. Marks will be

attracted if this is evident from the answer.

• Reduction of tax payable should always be considered, but it should never be

the driving force of the advice. The driving force should always be the person’s

objectives, needs and risk profile.

Guidelines for suitable advice to Alex:

As per instruction in the question, the first section should make reference the fees

and risk and return associated with both options.

In terms of fees the following can be deducted from the fund fact sheets and should

be mentioned to Alex:

o Option 1: An upfront fee of 5.7% is payable but the adviser can discount it

down to 2.28% (5.7% less 3.42%). In this case it will mean that an amount of

R57 000 will be sacrificed with only the balance invested. Other aspects to

mention is that R17.10 of every monthly contribution will be sacrificed in

upfront fees.

o Option 2: No upfront fees are payable to the product providers, resulting in

the full R2.5 mil to be invested. The same will apply to the premiums,

resulting in the full R750 pm invested monthly.

o All admin/management fees should also be considered.

o Option 2 has a higher TER. Candidates should explain that TER is reflected in

unit price, which is thus not a fee for the investor himself.

When discussing the Risk and Return, the following must be considered in advice to

Alex:

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o Option 1: These funds have consistently outperformed option 2 over the last

5 years, with the exception of 2011. Alex’s risk tolerance is important to

take into consideration as he only requires around 12% growth per annum. In

terms of this, the outperformance at the additional risk is not in line with his

needs.

o Option 2: The performance over previous 4 years is adequate for Alex’s

return requirements and the volatility is significantly lower. Candidates

should have considered also an additional Alpha over option 1 with much

lower volatility at 4.49.

Lastly, the candidate should have mentioned that there may be Capital Gains

Tax payable in the year of withdrawal, depending on the capital situation in that

year. To counter this, a slightly higher target should be taken into consideration

to make provision for this.

Summary of relevant fees/Risk and return investment vehicles

Option 1 Option 2

Fees:

Upfront: initial

Advice:

TER:

2.28%

1.14%

0.87%

0%

1.14%

1.67%

Return 19.94% avg p.a. over 5

years

13.63% avg p.a. over 5

years

Risk/Volatility 11.26 4.49

• An evaluation of the most suitable investment vehicle for the investment in terms

of suitability for Alex’s needs, considering direct and Longterm Policy options;

(6 marks)

Both investment vehicle options can only be accessed in one of two ways: either

directly or via a long-term policy such as an endowment or sinking fund on a LISP

platform. RA is not an option if Alex’s liquidity need is considered. Both options

will be fully liquid at the time of Alex turning 40 years old.

Matters to consider when evaluating the options:

OPTION 1:

o Direct: Income and gains will be reported in Alex’s annual income tax return.

Option 1 generates dividend income which will result in no income tax

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implications as it is fully exempt. Until the age of 40 Alex does not consider

any withdrawals with will then also not result in any CGT implications.

However, when the funds are withdrawn, the taxable capital gain will be

included in his taxable income during that year.

o Long-term policy: Because of the nature of these funds, no income tax or

CGT implications on full withdrawal for Alex himself. However, CGT will be

payable in the Individual Policyholder Fund, though as the units will still be

disposed of in order to pay out the full withdrawal value. Thus the full

investment value will not be available to Alex when he withdraws.

OPTION 2:

o Direct: Again, income and capital gains to be included in Alex’s return

annually (whether reinvested or not). Dividend portion is exempt, but

Coronation Balanced Defensive Fund alone generated 3.93% in interest

income during the 2013/2014 tax-year. Similar for the Prudential Fund,

though income split not specific. Actual interest amount will thus most

certainly be in excess of the interest exemption and thus potentially taxable

(depending on Alex’s other income and deductions). As above capital gains

not relevant until age 40 at which time taxable capital gains to be added to

his taxable income.

o Long-term: Interest component to be taxed at the IPF rate of 30%. On full

withdrawal no income tax implications for Alex, but as above units will be

disposed of in order to pay out the full withdrawal value and capital gains

tax thus payable within the IPF – i.e. the full investment value will not be

available on withdrawal at age 40.

• Your advice as to the most suitable vehicle and investment fund option for Alex

(5 marks)

o Investment vehicle: Alex pays tax at a rate of 25%, thus the interest

generated via Option 2 will attract slightly more tax in the long-term policy

structure as opposed to the direct option. BUT the actual rand amount will

be small compared to the benefit on Alex’s death (consider his needs of cost-

effectiveness and expediency): no executor’s fee will be payable and if he

nominates his daughter the value will pay to her (or likely her mother given

she’s a minor) upon submission of the claim. A direct investment would fall

within the estate as no beneficiary can be nominated – and would thus

attract executor’s fees and only be available once the estate is wound up

which could be as long as 12 months or more. Thus long-term option is more

suitable given Alex’s needs.

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o Investment Fund: Option 2, whilst producing significantly lower returns p.a.

over reported periods it is more suitable to Alex as an investor. This meets

his return objectives with significantly lower investment risk.

Marks have also been allocated for structure, logic, flow and appropriate language usage.

The page limit was 5 pages.

Critical evaluation of performance of students

Evaluate how questions were answered

by candidates

Candidates did not interpret the question properly

Where marks were lost in general Candidates failed to identify the various characteristics in evaluating

the two investment options (fees/cost/Risk/Return) and at times did

not provide supportive information.

Common trends and tendencies Tax implications were not included in general

What went well Identification of the various investment vehicles

What went poorly Assuming the applicable Investment vehicle and the applicable

solution (linking the two together)

Assessor Comments (per question)

Question Comment Suggestion for corrective action

N/A

Fees: Information of upfront fees not

included or calculation incorrect.

TER: few candidates failed to identify that the

TER was reflected in the unit price.

The question was fair and valid. However, the most

obvious point of improvement will be w.r.t the learning

material. Most FA’s are tied agents and at times are not

comfortable with company specific information. This

became evident in that some candidates separated the

two funds already incorporated as one fund.

N/A

Risk and Return: Volatility was either not

provided or provided no supporting evidence

was given.

Performance: candidates used an incorrect

assumption in their analysis of the

performance of the funds

Some candidates have failed to comprehend some of the

information/terms given within the fund fact sheet as the

fund information was not generic. Candidates should be

able to interpret both generic and fund specific

information.

N/A

Capital Gain Tax:

Most candidates did not correctly identify the

relevant investment vehicle. If they did, they

did not include the capital gains tax

implications in their analysis.

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Assessor Comments (per question)

Question Comment Suggestion for corrective action

N/A

At times candidates provided the incorrect

tax rate for the client (not acceptable at this

level).

N/A

Layout was poorly articulated and did not

make sense overall (candidates gave

conflicting view regarding the funds chosen

and the applicable investment vehicle).

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Case study 3: Ethics and Regulatory Environment

CLIENT OVERVIEW

After being referred to you by an existing client of yours, you met with Sarah Adams in early

January 2014 for an initial meeting, with a follow-up meeting two weeks later. You

followed your advice process and presented Sarah with the documents in Annexure B and

Annexure C at a meeting on 17 February.

QUESTION [25 marks]

Consider all applicable legislation as well as the Financial Planning Institute’s Code of Ethics

and Professional Responsibility. Provide a detailed analysis, with motivations, regarding

compliance of the financial plan and record of advice with the above legislation and Code.

Your answer may not exceed 4 (four) pages and no calculations are required.

For purposes of your answer you may assume the following:

• All information on product suppliers as well as the financial services provider has

been supplied to Sarah in the appropriate format and as prescribed;

• All annexures referred to have been provided and calculations are correct.

Financial planning components covered in question

Amount of marks included in question

Type of Question

Marks allocated

Investments 0

Knowledge 6

Financial Management 0

Comprehension 6

Retirement / EB 0

Application 0

Estate planning 0

Analysis and synthesis 6

Risk planning 0

Evaluation 7

Tax planning 0 TOTAL 25

Health care benefits 0

Ethics and regulatory environment 25

TOTAL 25

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Annexure A

Record of Advice: Ms S Adams

17 February 2014

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SUMMARY OF FINANCIAL POSITION Our financial analysis and recommendations focused on the following life goals: 1. You would like to be able to retire at the age of 60. You will require income in retirement of R30 000 per month (current value) until the age of 100. 2. Ensure that Casey’s tertiary education is provided for. FINANCIAL PRODUCT/S RECOMMENDED Based on the information supplied and the analysis conducted (as included in your Financial Plan) the most suitable financial product is a retirement annuity, to be invested in the Allan Gray Balanced Fund. Herewith the most important criteria for the selection of the financial product and product provider: CRITERION YES NO COMMENT Institutional securityInstitutional securityInstitutional securityInstitutional security X Allan Gray is a well-established asset manager and an authorized FSP Cost of productCost of productCost of productCost of product X No upfront fees payable Fund choiceFund choiceFund choiceFund choice X Fund selected meets client’s investment growth requirement TerminationTerminationTerminationTermination X Early termination may incur penalty fees Access to capitalAccess to capitalAccess to capitalAccess to capital X Investment may not be accessed until age 55 at which time the retirement capital will become available TaxationTaxationTaxationTaxation X Deductibility of premiums within limits set by the Income Tax Act; income and capital gains within the investment fund not taxed AdministrationAdministrationAdministrationAdministration X Allan Gray is the administrator CommunicationCommunicationCommunicationCommunication X Bi-annual reviews

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FEES Upfront fee: None On-going adviser fee: 1% p.a. Total Expense Ratio: 1.78%

REPLACEMENT

CURRENT PRODUCT REPLACEMENT PRODUCT TERTERTERTER 2.98 % 1.78% Exclusions/restrictionsExclusions/restrictionsExclusions/restrictionsExclusions/restrictions None None Financial planneFinancial planneFinancial planneFinancial planner feer feer feer fee 1.14% (incl. VAT) 1.14% (incl. VAT) I, Sarah Jane Adams, hereby acknowledge that this record of advice, in conjunction with the financial plan prepared, represent an accurate record of events. I hereby accept the recommendations presented to me in the financial plan. ________________________________________ __________________________________ SARAH JANE ADAMS DATE

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Annexure B

Financial Plan: Ms S Adams

17 February 2014

INTRODUCTION Thanks for your meeting with me and participating in our two previous meetings. At Sure Financial Planning we aim to build, along with your valuable input, a financial plan that aims to provide you with a framework for your current and future financial well-being. Sure Financial Planning has a team of dedicated, experienced specialist financial planners and associated staff to ensure best practice and best service to all our clients.

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YOUR GOALS We have identified the following as your most important life goals: 1. You would like to be able to retire at the age of 60. You will require income in retirement of R30 000 per month (current value) until the age of 100. 2. Ensure that Casey’s tertiary education is provided for.

YOUR CURRENT SITUATION

PERSONAL INFORMATION Name and Surname: Sarah Jane Adams Date of birth: 28/04/1984 Spouse: John Stephen Adams (32) Children: Casey Anne Adams (2) You and John have been married for 5 years and share jointly in the household expenses. John is an author and is currently mid-way through a novel, which is likely to be published in 2015. In addition to his authoring John is also a part-time lecturer. You are married out of community of property with the accrual regime applicable. Your family home is jointly owned and the bond registered in both your names. The home is situated at 31 Prive Crescent, Rondebosch, Cape Town. You work as the Marketing Director for Web World (Pty) Ltd, an on-line retail company. You have worked for your employer for 3 years. As mentioned your main priorities at the moment are ensuring you save sufficiently for Casey’s tertiary education as well as for your retirement. You and John will both retire when you turn 60.

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ASSETS AND LIABILITIES You provided us with a list of assets, liabilities and investment products. We will keep the full schedule on file, but for purposes of this plan the following are of importance: OM1234OM1234OM1234OM1234 Old Mutual Retirement Annuity Inception: 1 April 2007 Maturity: 31 March 2040 Current value: R421 873 Contribution: R1 300 p.m. Escalation: 6% annually Beneficiaries: Spouse Fund: Old Mutual Balanced Fund DD4455DD4455DD4455DD4455 Discovery Endowment Inception: 1 May 2011 Maturity: 30 April 2016 Current value: R43 000 Lump sum investment Beneficiaries: None noted Fund: Allan Gray Balanced Fund SB0032123SB0032123SB0032123SB0032123 Standard Bank Savings Account Current balance: R31 500 You are also a member of your employer’s pension fund. The current value is R745 213 and you contribute 7.5% of your retirement funding income. Your employer contributes 9% of which 1.5% funds the group risk benefits. When you resigned from your previous employer you transferred the full pension fund value into your current employer’s pension fund.

RECOMMENDATIONS AND STRATEGIES Let us deal with your two stated goals individually. Saving for Casey’s tertiary education: Based on the information you provided the current value for a year of tertiary study is R60 000. Casey would probably be in her first year of study at age 19 – thus in 17 years’ time. The analysis (see annexure) indicates that with an average annual investment return of 12% the value of the Discovery endowment policy in 17 years’ time will be sufficient to cover the education needs. For purposes of our analysis we have assumed the cost of study increases annually with an inflation rate of 6%. The Allan Gray Balanced Fund has managed, since inception, to provide an annual investment return in excess of 12%. Whilst one must always bear in mind that past

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performance is not an indication of future performance, the fund choice is appropriate at present. I would thus recommend that you maintain this investment in the current investment fund. We will consider this investment to be allocated to that specific purpose and will not take it into account for any other financial needs. Saving for your retirement: Based on the information you provided you would require an income of R30 000 per month from the age of 60 until the age of 100. The income must escalate at inflation annually. The analysis (see annexure) indicates a shortfall in retirement capital which necessitates an additional saving of R165 780 annually, or R13 815 per month if you wish to accumulate sufficient capital at retirement to meet your stated goal. Your current retirement savings amount to R67 500 per annum towards your pension fund (this includes your own as well as your employer’s contribution) PLUS R15 600 per annum towards your retirement annuity. This is a total of R83 100 per annum/R6 925 per month. There are a number of strategies you can consider in the context of the retirement situation. You can either: • Retire later – this enables your savings to accumulate for longer, with additional contributions; OR • Contribute more; OR • Take on more investment risk – this will enable your savings to grow at a faster rate. As discussed you want to combine the benefits of additional contributions and somewhat more investment risk. We discussed a number of savings vehicle options and I recommend that additional savings be made into a retirement annuity. You will benefit from the deductibility of the additional premiums and in addition growth within the fund will be free of taxation. We discussed a number of investment fund options and I recommend the Allan Gray Balanced Fund. We explored the possible range or returns over various investment periods. You indicated that you feel comfortable with the level of volatility within this fund. You will find the summary of the range of returns over the various investment periods in the annexures hereto.

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I would recommend that you take out a second retirement annuity with Allan Gray with a regular monthly contribution of R10 000, escalating at 6% annually. Investment to be in the Allan Gray Balanced Fund. I would further recommend that you transfer the existing Old Mutual retirement annuity to the new Allan Gray retirement annuity in terms of section 14 of the Pension Funds Act. The benefits of such a consolidation are: • We can monitor consolidated performance against your goals • No fees payable in respect of the transfer • One set of administration fees payable

FEES As discussed our on-going financial advice fee is 1% per annum of all your assets managed by ourselves. No initial adviser fee is payable. The on-going fee is calculated annually and is payable monthly. You will notice this fee reflected on the investment statement you will receive periodically from Allan Gray. In addition to the advice fee there is also an administration fee payable. This fee is paid to the administrators of your investment, thus Allan Gray. At present Allan Gray unit trusts provide a manager fee discount equal to the administration fee which means that the administration fee is discounted in total. The Total Expense Ratio of the chosen fund is currently 1.78%. This is not an additional fee paid by the investor but is a measure of the costs incurred in managing the fund – as such it is already included in the unit price.

NEXT STEPS Once you have indicated acceptance of these financial planning recommendations we will complete all requirements necessary to implement the recommendations as soon as possible. As part of our service offering to you we will be in contact with you twice annually for a review of your financial plan. Given that the financial planning environment is constantly changing and influenced by legislation, the investment environment and your personal circumstances impact directly on your financial plan it is imperative that we ensure the appropriateness of the plan to your needs at all times.

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ANNEXURES (Please note for examination purposes these have not been included) Please find the following attached in the annexures that follow: • A copy of the disclosure document presented to you at our initial meeting • The calculations/analysis referred to above which form the basis of our recommendations, along with all assumptions used. • Investment vehicle descriptions: endowment policy and retirement annuity policy

Notes to candidates to consider in such a question:

Again these are no one correct answer or correct format in which answers can be

presented. The following is a guideline as to what candidates could have considered.

Important: the question did not ask for shortcomings but for a detailed analysis of all

aspects that should be complied with.

In answering such a question, it is imperative that candidates understand the various

requirements well and know where the overlap between the FPI Code of Ethics and FAIS

General Code of Conduct is. It is further important to reference the various sections that

would be mentioned in the answer as to facilitate the assessment of the question.

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General Code of Conduct for Authorised

Financial Services Providers and

Representatives

BN 80 of 2003 (‘the General Code’)

Comments

Part II section 2 – General duty of provider Diligence questionable. Is replacement in the interest of the client? If not, comment on this with

suitable motivation why this is your opinion

Part II section 3 – Specific duties of provider

section 3(1) (a) (i) –(viii)

The documentation included in the annexures are found to meet this requirement (with regards

to representations made and information provided to a client by the provider)

Part III section 4 and 5 The information is compliant with these sections – this was assumed in the facts of the case

study.

Part VI section 7 – Information about the

Financial Service

section 7 (1) (a) and (c) (vii) – (xiii)

The question here to determine is whether the client was placed in a position to make an

informed decision

It appears that not all disclosures were made to the client – comment on which disclosures

according to you are not made

Part VII section 8 – Furnishing of Advice:

Suitability

section 8 (1) (a)

Section 8 (1) (b)

Section 8 (1) (c)

Section 8(1) (d)

Section 8 (4)(a) (b)

(a) Requirement not fully met – what about risk planning for instance?

(b) Full analysis not conducted.

(c) Even though it appears that a risk tolerance discussion took place; no discussions took place

around cash flow and affordability

(d) Not all disclosures with regards to replacements were made. Again, was client placed in a

position to make an informed decision?

(4)(a)(b) No, only specific needs were addressed-provider needs to bring this to the attention of

the client and alert the client of the clear existence of risk to the client as soon as possible.

Part VII section 9 – Record of advice:

Section 9 (1)(a) – (d)

Section 9(2)

Record of advice not compliant with section 9 of the general code as a brief summary as per (a)

was not provided, does not reflect which other financial products were considered. It does

through provide a brief explanation of why the product selected is likely to satisfy the clients

identified needs and objectives.

Requirement met as copy of ROA provided to client

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FPI Code of Ethics and Professional Responsibility (‘FPI

Code’)

Comments

Part 1: Principles of conduct – 8 Principles Principles 6 and 8 appears not to be met, this ties in with Part II section 2 of the General Code

above

Standards of conduct – 10 elements These elements serve to direct the member of the FPI in respect of how the principles of

conduct must be applied within their conduct towards their clients etc. Students could have

discussed any of the ten elements in relation to the facts of the case study. Merely quoting the

FPI Code word for word with no application did not suffice

Part 2: Financial Planning Practice Standards

This part of the FPI Code also refers to the Six-steps of

the Financial Planning Process

Reference to the said six-steps in relation to the case study facts, were acceptable. Merely

mentioning what the six-steps are with no application to the case study did not suffice either.

*Important to note that the first two steps of the six-step process had already been complied

with as per the assumptions provided in the case study (this ties with Part III section 4 and 5 of

the General Code)

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Additional notes with aim to assist with preparation of PCE exams:

The CFP ®Professional Competency Exam (‘PCE’) is set at an NQF 8 level. It is therefore expected

that students should be able to refer to the correct legislation in the correct format. There is no

such thing for instance as “section 9 of the FAIS” that refers to a Record of Advice. A statement like

this is grossly and totally incorrect as does not reflect the level of professionalism the Financial

Planning Institute of Southern Africa NPC (‘the FPI’) require. Correct reference would be, using the

same example: “Part VII section 9 of the General Code of Conduct for Authorised Financial Services

Providers and Representatives (‘the General Code’) refers to a Record of advice.”

Furthermore indicate clearly which legislation you are referring to by quoting in the beginning of

your answer that the General Code of Conduct for Authorised Financial Services Providers and

Representatives will be referred to as “the General Code” and the FPI Code of Ethics and

Professional Standards will be referred to as “the FPI Code”. The Financial Advisory and

Intermediary Services Act 37 of 2002 will be referred to as “the FAIS Act”.

Do not expect the assessor and/or moderator to make any assumptions on your behalf. You need to

state clearly for instance: “the record of advice is not compliant with section 9 of the General Code

of Conduct for Authorised Financial Services Providers and Representatives (‘the General Code’) in

that it does not reflect which other financial products were considered. The client was therefore not

placed in a position to make an informed decision in terms of section 8(2) of the General Code.

Refrain from mentioning merely: Section 9 of the code was not complied with. Why not and which

code?

Critical evaluation of performance of students

Evaluate how questions

were answered by

students

Students generally applied the 6 Step planning process to answer the

questions or/and merely listed legislative requirements

Where marks were lost in

general

Candidates tended to list the regulatory requirements, however did not apply

it to the ROA and Financial Plan provided

Common trends and

tendencies

Candidates generally provided answers that were not required i.e. explaining

implementation and review process

What went well Some candidates did in fact interpret the question correctly - and subsequently

provided answers that were required in terms of analysing the relevant

legislation and codes of conduct.

What went poorly Candidates did not interpret the question correctly in terms of what was

required, and thus either listed the 6 step planning process or provided a list of

applicable legislation