Master the Applied Wealth Management Exam : Essential Tips
Discover valuable tips and strategies to pass the Applied Wealth Management exam and achieve the prestigious Chartered Wealth Manager qualification.
The Applied Wealth Management module is the third and final paper from a suite of three that makes up the Institute’s Level 7 Chartered Wealth Manager (CWM) qualification. This is the CISI’s top award and the benchmark for private client investment advisers and managers, if you want to demonstrate that you have the highest standards of knowledge and expertise.
The pass rate for the AWM exam is reasonable and has hovered around the 60% mark in recent exams. A lot of this will be down to the experience of the candidates and in many respects, the more practical nature of some of the exam questions.
AWM Exam Structure
The structure of the exam is rather like the first paper, Financial Markets, in that:-
- Section A provides a choice of answering four short questions from an available six with each question worth 5 marks
- Section B has two compulsory case studies with associated questions each worth 20 marks
- Section C has a larger case study and questions worth a total of 40 marks.
However, candidates still fail and often for similar reasons.
AWM Exam Technique Tips
Here are my top tips to steer your exam technique to help you pass the first time.
- Use the words in the questions to gain maximum marks
Imagine that you are an investment manager or adviser (not hard hopefully given most candidates’ day-to-day roles!). Now consider that there is a fundamental staged process to providing investment advice namely:
- Understanding client goals,
- Gathering information,
- Performing analysis,
- Making recommendations including their justification
- Reviewing the plan.
Now imagine that these processes in “exam land” rarely overlap. You should be getting an idea of the types of questions you will face in this paper. Relative to a scenario presented, the examiner will specifically ask you using key words and phrases, to carry out one of the parts of the above process. The style is one of the few effective ways that you can objectively assess both a candidate’s advisory skills and knowledge in timed narrative exams.
The reason I start off with this point is that consistent failure to adhere to the specific tasks set in the exam is one of the biggest reasons why people don’t pass. In a day-to-day management or advisory role, we often assess a client’s situation “in the round” that is, whilst gathering information about their circumstances, our brains are whirring away analysing the situation, its pros and cons and maybe, we are even beginning to consider potential solutions.
To summarise, look out for the key words in the question and decide whether you are being asked a “client goals”, fact-finding, analysis, recommendation or review type question. Answer accordingly. It is so easy to deviate away for instance, making recommendations when you should be analysing a situation.
Here are a few examples of what some of the key words and phrases may look like in the exam:
Fact-finding:
- “Identify the further information that you would require from the clients in respect of their protection and pensions savings needs.”
- “What further questions would you ask your client in respect of their investment needs?”
Analysis:
- “Critically assess the merits and pitfalls of Mr X investing into either investment trusts or life assurance investment bonds.”
- “Evaluate the advantages and disadvantages of Miss Y using her available funds to save regularly into either her SIPP or her ISA.”
Recommendations:
- “Recommend a suitable asset allocation to meet your clients’ investment needs in accordance with their risk profile.”
- “Justify your recommendations.”
- Answer the exam sections in any preferred order
Many people answer the questions in these exams in numerical order. This can suit an awful lot of candidates but not everyone. If you don’t think about this, two problems could surface in the exam.
Firstly, you could simply spend too much time on low mark questions at the beginning of the paper, leaving yourself little time at the end to answer questions that are worth a lot more.
Secondly, you need to understand which questions are going to require more thought to answer (e.g. portfolio construction, product recommendations etc) and which are more knowledge-based forms of testing such as understanding features and benefits of different product solutions which could be answered a lot quicker.
You can answer the sections of the paper in ANY order you wish. You just need to clearly identify the questions you have addressed both in the script itself and on the front of your answer book.
In terms of the route you decide to take, go into the exam with a preferred Plan A, but if on the day, the questions don’t suit that route, have an alternative plan that you are comfortable with. As you practise more and more with mock or past examination papers, you will start to feel naturally more comfortable with one strategy over others but just make sure you have practised enough beforehand to be flexible.
- Get to know the different parts of the AWM exam really well
By that I mean, through reading past examiner reports and practising as much as possible yourself, try to get a feel for what the examiner wants from you in each section.
Section A is much more likely to be a test of your knowledge and / or analytical skills and will require you to impart a fair degree of information for the 5 marks per question on offer. You need to be succinct, clear in answering the specific question yet detailed enough with the content to pick up maximum marks. Sounds easy but it isn’t. It gets easier with practice though.
Sections B and C are similar in many ways, often asking you to use all the information in the case study provided to demonstrate your information gathering, analysis and recommendation skills. An obvious tip but necessary – Make your answers as relevant as possible.
If fact-finding, focus on finding out the information that you DON’T know from the case study – not a list of generic questions many of which could have been answered from the scenario presented. You need also to get to grips with just what information is needed from a client in different situations. Take a look at one of your firm’s own fact finds if you can and go through the main sections to identify the elements usually deemed essential. If analysing, could you present your answers in a way that allows the examiner to easily identify relevant points.
My favourite method when analysing different products is to write a series of headings on the answer sheet that will allow me to objectively compare the two arrangements. For instance, if not asked otherwise, what about these headings as a fairly standard template for packaged products?
- Features
- Benefits
- Risks
- Tax treatment
- Charges
You could also use a similar methodology when building a set of recommendations and providing a justification for them. If, for instance, you recommend investments, lay them out in a clear table identifying the investment type, the amount and if required, the income it provides.
When justifying the investments, what about using the following mnemonic to help with your explanations?
R = Risk of the investment
I = Income and capital growth provided / received
T = Tax treatment both internally and to the investor
A = Accessibility or liquidity without unnecessary costs
C = Charges of the investment to the client and again within the fund.
These are a few useful tips to help with your exam technique. As with both the other Chartered Wealth Manager papers, becoming more familiar with the syllabus, understanding it and applying it to different scenarios will help as will exam practice to refine your technique. A good learning or revision course will always help to speed up that process. We can help with that!
Don’t get caught out on the final hurdle. Make sure you go through these tips, understand them and put them into practice! Good luck.
Glascow Applied Wealth Management courses
Glascow Consulting is a CISI Approved Training Provider (UK), we offer a comprehensive revision course over eight days, which includes a mock exam with feedback. For those who wish to study alone and attend a short revision course prior to the exam, we offer a two day revision workshop.
We deliver our courses personally via Zoom to help our students fully understand the syllabus and to guide with exam technique which is often where delegates require most help. We pride ourselves in offering the highest level of support in the UK.
Scheduled Courses
Learn more about our full & revision Applied Wealth Management training courses.
Learn more about the Chartered Wealth Manager Qualification units.
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Find out about our other financial service training including CPD and Consulting.
We are able to deliver an in-company course for you at any location. In addition we offer one-to-one coaching, email support and separate mock exams.
Check our full CISI training course schedule or for specific questions, send us an email or call on 0203 292 9229.
