Focus on the CII R06 Fact-Finding Questions

One thing you can pretty much guarantee in the CII R06 exam is a fact-finding question. Here, we discuss the subjects usually covered, the purpose of this type of question, and the typical information you would need to know to answer it successfully.

The fact-finding question usually appears at the start of the questions for one of the case studies and is often in the format of ‘identify the additional information an adviser would require in order to advise the client on their…’. The subject area is usually quite broad such as investments, protection, pensions, or even more generally the client’s financial affairs. Sometimes, there is a more specific subject covered such as a SIPP or perhaps one of the client’s investments – we’ve seen a fact-finding question on a with-profits investment bond, for example.

The purpose of these questions is to test your understanding of the information you would need to know about your clients in order to provide financial advice so, in fact, most of the answers are quite straightforward and candidates tend to perform well on these questions. When you receive the case studies, take a step back and ask yourself, if these were my clients, what else would I need to know about them and their financial affairs? I expect a flurry of questions will pop into your head. Of course, if the information is already provided in the fact-find, you will not earn a mark (but the good news is you won’t lose a mark either!).

These questions are usually worth in excess of 10 marks so if you are well prepared, there are usually some quick and easy marks to kickstart your exam

Typical Generic Information

Typical information you would need to know about your client would include:

• Missing personal information such as health status/family/dependants
• Details of existing investments such as current values/charges/performance/projections/fund choices
• If any inheritances are due/any gifts planned
• ATR/CFL
• Income/expenditure
• Liabilities/debts
• Objectives/priorities/timescales
• Wills

So, if any of this data is missing, you are likely to need to know it.

In certain client scenarios, you will need to be more specific in your answers. For example, if you know one of the clients has a long-term illness, you would perhaps need to ask about life expectancy/prognosis/state benefits/care requirements.

Subject-Specific Information

Other relevant points for investments could be:

• Amount of emergency fund required
• Use of ISA allowance/CGT exempt amounts
• New products/existing products still suitable
• Tax rates/use of tax allowances
• Willingness to transfer assets to a spouse/civil partner
• Base cost of investments/any withdrawals
• Ethical preferences

Other relevant information for advising on protection could be:

• Current premium/cost to replace
• Critical illness included
• Sum assured/term
• Guaranteed or reviewable premiums/loading
• Use of trusts

Other relevant factors for pensions may include:

• Planned retirement age/s
• Lump sums needed/target income/flexible income required
• Salary Sacrifice
• BR19/State pension forecast
• Contribution history/carry forward
• Lifetime allowance considerations/transitional benefits
• Enhanced annuity rates (if one of the clients is in ill health)
• Nominations
• DB scheme – PPF/SRA/PCLS/accrual rate/dependants benefits/CETV

These are not exhaustive lists, and some of these points may be relevant to more than one subject e.g., a client’s ethical preferences are likely to apply to their pension planning as well as investments.

For further revision in this area, we would suggest you look at as many past CII exam guides and our past analyses for more exam technique practice on fact-finding-style questions.

Soon, we will be releasing our R06 case study analysis for the September exam and within this, we will provide a number of fact-finding question examples that we think may be tested based on the two case studies.

Grab the resources you need!

If you’re studying for your CII R06 exam, and you’re wanting to feel more confident on exam day, grab our free taster analysis to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the R06 case study analysis taster now!