Our Post-Exam Review of the April 2023 CII R06 Exam
The exam guide 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.
This article is correct as at 29 June 2023.
You can access the exam guide here.
Case Study 1
Case Study 1 introduced us to Ken and Mary.
Their financial aims were to:
- Ensure that they have sufficient income throughout retirement.
- Review the ongoing suitability of Ken’s personal pension arrangements.
- Improve the tax-efficiency of their financial arrangements following Ken’s return to work.
Question Our Analysis
State the additional information that a financial adviser would require in order to advise Ken and Mary on the suitability of their current financial arrangements. The model answers to the two fact-finding questions we included in our analysis for Ken and Mary covered this in full.
Explain to Ken why he may wish to stop taking the withdrawals from his flexi-access drawdown (FAD) arrangement. Within our question ‘recommend and justify actions to ensure a sufficient, sustainable income in retirement’, we covered why Ken should stop withdrawals from his FAD.
Explain to Ken why he should make further pension contributions when he returns to part-time employment. Within Aim 1, we had provided a model answer to recommend and justify why Ken should maximise his pension contributions. This, together with our question ‘factors to consider when maximising Ken’s pension contributions’ in Aim 2 should have provided candidates with enough information for maximum marks.
Recommend and justify a range of actions that Ken and Mary can take to improve the overall tax-efficiency of their financial arrangements when Ken returns to part-time employment. We had provided a model answer to this exact question.
Identify the key factors that Ken should take into consideration before making any changes to the underlying investments in his self-invested personal pension (SIPP). We had included a number of ‘factors’ questions relating to Ken’s pensions. These model answers could have been used to answer this question.
Identify the key information that a financial adviser should take into consideration when preparing a cashflow model to assist Ken and Mary with their financial planning. This question and model answer were included in our generic section.
State the reasons why Ken should include his two children as part of the death benefit nomination on his SIPP. Although we had considered their death benefit nominations, we had not specifically covered them in relation to the two children. Luckily only a few marks were on offer for this curveball question.
Case Study 2
Onto case study two where we met Nick and Shirin.
Their financial aims were to:
- Improve the suitability and tax efficiency of their current financial arrangements.
- Ensure that they can retire when Nick reaches age 60.
- Ensure that their financial protection arrangements are adequate for their needs.
Question Our Analysis
Outline to Nick and Shirin the key factors that may result in them failing to meet their plan to retire when Nick is 60, based on their current circumstances. This ‘factors’ question was not specifically covered in the analysis. We had included a number of ‘factors’ questions for Nick and Shirin so we hope that candidates could have used the practice to help answer this question.
Recommend and justify a range of actions that Nick and Shirin could take to improve their ability to retire with an adequate level of income, when Nick attains age 60. The two ‘recommend and justify’ questions in our analysis, under their aim of ensuring they can retire at 60, covered enough content to answer this question in full.
Explain why it might be of benefit to Nick and Shirin to use a range of different asset classes within their pension and ISA holdings. We had covered asset diversification in detail within case study 1 and 2 and in our self -test questions section.
Explain to Nick and Shirin their potential entitlement to Statutory Sick Pay and the conditions that must be met for this to be paid to them. Our analysis included a question on Statutory Sick Pay which covered most of the marks on offer.
(i) Outline to Nick and Shirin the key differences between a critical illness policy and an income protection policy.
(ii) Explain to Nick and Shirin the reasons why they might consider replacing their existing level term assurance policy with a more suitable policy to protect their mortgage.
(i)Whilst we had not directly compared the two types of protection most of the answers were included in our recommendations for critical illness and income protection.
(i) Our question on identifying weaknesses in their protection arrangements on death/ill-health could have been used as a starting point for this question.
Identify five advantages and five disadvantages for Nick and Shirin if they choose to continue to invest their excess income in Individual Savings Accounts (ISAs), rather than making overpayments to their mortgage. We had listed the benefits and drawbacks of making overpayments to their mortgage which could have been adapted to answer this question.
Identify eight key issues that a financial adviser should discuss with Nick and Shirin at the next annual review. This review question was included in case study 1 and could have been adapted for Nick and Shirin.
Overall, this paper was a good test of both technical knowledge and financial planning advice processes; although there were some twists on standard questions such as including the children on the death benefit nominations.
We are sure that candidates who prepared well for the style of questions and used our analysis would have gained a good mark.
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!