Our Post-Exam Review of the April 2021 CII R06 Exam
Our Post-Exam Review of the April 2021 CII R06 Exam
The question paper from the April sitting of R06 has been released by the CII, prompting us to see how we did in predicting the questions and model answers in our pre-exam analysis.
You can access the exam guide here.
Case Study 1
Case Study 1 introduced us to Jim and Helen, both aged 62, living together and planning to get married in the next few years. Helen was in the process of getting divorced and Jim was a widower.
Their financial aims were to:
- ensure that they can generate an adequate income in retirement
- mitigate Jim’s future Inheritance Tax liability
- ensure that the surviving partner is financially secure in the event of death.
| Question | Our Analysis | |
|---|---|---|
| State the additional information a financial adviser would need to advise Jim and Helen on their retirement planning. (12) | Our first piece of analysis was on the further information that an adviser would need before they could advise Jim and Helen in the area of retirement planning with over 20 bullet points of information. | |
| State 4 advantages and 4 disadvantages for Jim of retaining his SSAS, rather than transferring this to a new personal pension. (8) | Our second piece of analysis was on the SSAS – we gave the main features followed by a table of the advantages and disadvantages with easily enough information to cover the 8 marks on offer. | |
| Explain to Helen the drawbacks of her being subject to a pension sharing order as part of her divorce settlement with Bob. (10) | We had provided the main features of a pension attachment order as well as a table of the disadvantages both of which could be used to answer this question. | |
| Explain why it is important to ensure that Jim and Helen write new Wills. (12) | We also had this question covered with our analysis of their existing Wills and the impact of Helen’s divorce and the fact Jim’s had not been reviewed in some time. We also included information on including an IPDI in Jim’s Will and the impact of the transferable nil rate bands. | |
| Outline the benefits for Jim of transferring part of his stocks and shares ISA into his AIM ISA. (10) (ii) State 6 drawbacks of him retaining his AIM ISA. (6) | Our analysis continued with the main features and benefits of an AIM ISA including the steps they could take to reduce any future IHT liability which included making further contributions to AIM ISAs. | |
| Identify the key issues that a financial adviser should discuss with Helen when advising her on the suitability of her portfolio of shares. (8) | We had analysed both Jim and Helen’s existing investments which included Helen’s individual shareholdings together with the key factors to consider when recommending an investment strategy. | |
| State 8 factors to take into account when reviewing Jim and Helen’s pensions at their next annual review meeting. (8) | We had included a question on the factors that would trigger a review; some of these factors would have been useful in answering this question specifically on their pension plans. | |
Case Study 2
Onto Case Study 2, where we met Dante and Cara, both aged 53, married with two young children.
Their financial aims were to:
- ensure that they have adequate financial protection arrangements in place
- arrange a suitable strategy to repay their interest-only mortgage
- ensure that their pensions and investments are appropriate to their needs.
| Question | Our Analysis | |
|---|---|---|
| State 5 advantages and 5 disadvantages of Dante and Cara retaining their interest-only mortgage, rather than switching to a repayment mortgage. (10) | We had provided a table of the advantages and disadvantages of them changing their mortgage to a repayment mortgage; this information could easily have been adapted to answer this question. | |
| Explain to Dante how his Annual Allowance for pension purposes would be calculated in respect of tax year 2020/2021. (8) (ii) Explain to Dante how the LTA would be applied to his pension benefits at the scheme retirement age.(8) | We had covered both parts of this question in full. | |
| State the additional information needed in respect of Cara’s deferred pension in her former employer’s pension scheme, before recommending a transfer to a personal pension. (10) | We had provided a fact-finding model answer for both Cara and Dante’s pension benefits which could have been used to answer this question. In addition, we had giving the factors to be considered before transferring Cara’s old GPP to a new arrangement. | |
| (i) Identify the additional information needed in respect of Dante and Cara’s current protection arrangements, to be able to advise them on suitability. (14) (ii) Explain 3 advantages and 3 disadvantages of Dante effecting income protection, rather than critical illness, to provide long-term protection should he become ill. (6) | We had this question covered - firstly by giving the information necessary to answer the fact finding question and for part (ii) we have in our generic section all the features of income protection and in the main body we discussed the use of an income protection policy for Dante. | |
| Identify the key factors that Cara should take into account when setting up power of attorney arrangements for her mother. (10) | We had provided analysis on how an LPA is set up and the various requirements as well as the benefits and drawbacks - all of which could have been used to help candidates formulate an answer to this question. | |
| Explain to Dante and Cara why their existing savings, investments and rental property may not be suited to their circumstances. (10) | We had provided analysis on the suitability and tax position of Cara and Dante’s existing investments which included the cash, unit trusts and ISAs and a separate section on the benefits and drawbacks of having a buy-to-let investment. | |
The case studies did throw up some interesting and technical points, but the exam itself asked fair questions which a well-prepared candidate should have been happy with.
The usual mix of questions appeared including fact-finding, ‘factors’ questions and those testing technical knowledge. Anyone studying for this exam sitting using our analysis should have been very happy in the way it would have prepared them for the questions that were asked.
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!
