Our Post-Exam Review of the April 2019 CII R06 Exam

The CII have released the R06 exam paper from their April sitting so it’s time to look at our pre-exam analysis and see how we did.  

If you haven’t seen the paper yet, you can access it here.

Case Study 1

Case Study 1 focused on Mark and Janice, a married couple with 3 children.  Mark was a self-employed plumber, and Janice worked part time as a veterinary nurse.

Their financial aims were to:

• clear their debts as quickly as possible
• consider the benefits to Mark of incorporating his self-employed business
• review Mark’s existing protection arrangement
• put in place a suitable strategy for long-term retirement planning

The paper had questions which covered their financial aims and started with their first one, which was to clear their debts. The first part of the question asked for an explanation as to why they should use Janice’s inheritance to repay their mortgage arrears, and the second part was to state the benefits and drawbacks of their retaining the inherited property and renting it out.  Our analysis on this aim would have been useful to answer the first part of the question.  With regards the second part, given their current circumstances, we did consider the house would have been better sold rather than rented, however our analysis on this could still have been adapted and used.

The next question tested the possible reasons why Marks’s income protection policy didn’t pay out, and we covered this question in enough detail for candidates to have attained most of the marks on offer here.

Next, we had a three-part question on their retirement planning; firstly, why it may be more suitable for them to make monthly contributions into their personal pensions instead of lump sums; then candidates had to recommend and justify the actions that the clients should take to ensure their plans are suitable to meet their long-term objectives, and lastly, candidates were asked for the drawbacks of using a socially responsible investment strategy.  The recommend-and-justify question was for the most marks and was expected so we had that fully covered; however, the other two questions do suggest that the CII are moving towards asking questions on areas that are not even hinted at in the case studies.  Our generic section has information regarding using an ethical investment strategy, so luckily this would have been very useful in answering the third part of the question.   We will also be expanding our generic section to cover more areas that could come up under what we term ‘curve ball’ questions.

The next question was clearly signposted as a financial aim, so we had the benefits for Mark of remaining self-employed fully covered in the analysis.

The next question also demonstrates a slight twist in the way the CII are asking questions: we were told in the case study that Mark helps his father to manage his finances and personal affairs.  In the question, we are then given more information: that Mark holds a Lasting Power of Attorney (LPA) for property and financial affairs, which hasn’t yet been registered with the Office of the Public Guardian.

We did plan for a question on LPAs and had provided information about the process for setting up an LPA, as well as what would happen if Mark’s father lost mental capacity without having made one.  Using this information would have secured most of the ten marks on offer for question (e).

Case Study 2

The next case study concerned Chris and Anita, a married couple with one adult disabled son.  Chris and Anita’s financial aims were to:

• ensure they have sufficient income in retirement
• improve the tax efficiency of their investments
• provide financial security for Alan

The expected fact-finding question came in this case study, and for 15 marks, candidates had to state the additional information required to advise Chris and Anita on their first financial aim concerning their retirement; this was covered in full in our analysis.

The second question asked candidates to consider the factors when advising Anita to invest in an onshore investment bond instead of the OEICs she already held.  This was not a question signposted in the case study so not one we had anticipated.

There then followed various questions on providing financial security for Alan.  Candidates were asked questions on State benefits, how a disabled trust could be set up as well as the tax implications of his being given a lump sum from his parents – either as a loan or as a gift.  The majority of the marks were for describing a disabled person’s trust, and our analysis covered both the qualifying rules and the tax implications of these, so candidates should have picked up the majority of these marks.

Question (e) was a two-part question on the couple’s workplace pension schemes; we had covered Anita’s position in full, but candidates will have had to draw on their own knowledge and understanding for the benefits and drawbacks of Chris’s staying in the default fund.

The last two questions were covered in full in our analysis; these were on the tax position of their OEICs and the benefits of Chris’s retaining his current DB pension scheme entitlement.  Candidates would have scored full marks using our analysis for these two questions.

In summary, this paper did seem different from previous papers and may signal a change in the format and content of this paper moving forward.  However, we covered the majority of the questions that came up, and candidates who had studied well for R06 should have gained a pass.  We will of course be keeping a sharp eye on developments with this paper, and as there did seem to be more ‘curve ball questions than normal, we will be expanding our generic section to cover more areas that could come up unexpectedly.

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!