Our Post-Exam Review of the April 2016 CII R06 Exam

It’s that time again to see how we did in our R06 pre-exam analysis, now that the CII have released the paper from their April 2016 exam. This will be of interest to those sitting R06 in the near future.

Case Study 1

Case study 1 focused on Paul and Giselle. Their goals were to: provide financial security for the family in the event of death or serious illness, ensure their investments are tax-efficient, ensure they have sufficient income in retirement and to effect a suitable savings plan for Giselle.

On first glance, the exam questions for case study 1 didn’t seem to particularly follow the familiar format of fact finding and recommend and justify although there was one of the latter. The paper seemed to be made up of quite a lot of questions that needed ‘explaining’ and ‘identifying’ and ‘commenting’. The first question, for example, was ‘comment on the suitability of existing savings and investments’; this we had covered, so it was a good start for us. Other questions were ‘state the reasons why Paul should be a member of his employer’s workplace pension scheme’ – again we had covered enough detail on workplace pensions to easily answer this question for full marks. The recommend and justify question was on a suitable product that met the family’s protection needs to cover the death of either Paul or Giselle – this, as you would expect, was covered in full, so candidates should have picked up the full 12 marks here easily too.

Other areas were incorporating Giselle’s business – the paper asked for 6 benefits and 4 drawbacks of her doing this and we had covered this in full for the 10 marks. The following question was linked to this one, and students were asked to explain how NI would change if Giselle incorporated. We had stated what Giselle’s current NI situation was, and throughout the answer to the previous question class 1 NI was stated – the well-prepared student would have been able to answer this with the information given. It was only 3 marks so not the end of the world if students didn’t remember the class of NI paid by an employee.

Further questions were ‘why an adviser should not solely rely on a risk-profiling tool to clarify Giselle and Paul’s attitude to risk’. This question has been asked before, so the model answer is incorporated in full in the generic section of our analysis.

A big-mark question asked to ‘identify the information you would require, in respect of Giselle’s existing critical illness policy, to assess its suitability’. This gave 10 marks, and although we had covered critical illness in quite some detail and specifically her existing policy, we only included 5 pieces of further information that would be needed so not the full 10.

When it came to the savings plan for Giselle, the question was ‘explain why a stocks and shares ISA, invested in a fixed-interest fund, could be a suitable investment for her proposed monthly contribution’. In our analysis, we had listed the pros and cons of her setting up a regular premium OEIC or unit trust, which could of course be held in an ISA. If a student had adapted the advantages from this section, then 7 out of the 10 marks could have been achieved. The only question we feel we didn’t cover in sufficient detail was: ‘state the benefits of Paul joining his employer’s death in service scheme’. We hope that most students would have been able to use their own knowledge to have picked up a few marks here. 72 marks were available for case study 1, and we are confident that our analysis would have helped candidates to easily be on track for an overall pass.

Case Study 2

So onto the next case study – this one focused on Ryan and Mylene with two financially independent children. Their goals were given as to: ensure they have sufficient income in retirement, maximise the tax-efficiency of their savings and investments, ensure Rita’s financial affairs are catered for and retain as much of their estate as possible to pass on to their children.

The questions started well with fact finding again – students had to state the additional information that an adviser would require to advise them on income in retirement. We had this covered with 16 bullet points and so we hope that students would have achieved the full 12 marks on offer.

We are also pleased to say that the question on lasting powers of attorney, two recommend and justify questions; one on tax efficiency of savings and investments and the other on reducing their IHT liability as well as a question on Ryan’s auto-enrolment obligations as an employer were ALL covered in full. Also candidates had to state 5 benefits and 5 drawbacks of using a salary sacrifice pension arrangement. This has also been asked before in R06, so a full model answer is included in our generic section of the analysis – covering both the position for employer and employee as requested in the question.

One area in which perhaps we could have gone into more detail was on FAD. There were 12 points on offer to list the factors Ryan should be aware of if he used FAD to take his pension income in retirement. We covered the benefits and drawbacks of Ryan taking an UFPLS, so information from here could have been used to answer this question to gain some of the 12 marks on offer.

Finally, in the review question, this also focused on FAD with students having to list the areas to be discussed at the next meeting should Ryan go down the FAD route. There were 6 marks on offer here, and although our review question didn’t specifically cover FAD, we are confident most students would have been able to answer this drawing from their own experience and knowledge and information in our analysis.

The total marks available for this case study was 78 out of the total 150.

No Real Curve Ball Questions

In summary, the April R06 paper was a fair one with no real curve ball questions and with the majority of predicted questions coming up. We are confident that our analysis covered the knowledge needed for students to have easily achieved a pass.

Grab the resources you need!

If you’re studying for your CII R06 exam, and you’re wanting to walk into the exam feeling confident, 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!

Over to You…

If you’re planning on sitting R06 in July, on what areas will you focus your revision?