Our Post-Exam Review of the April 2024 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 13 June 2024.
You can access the exam guide here.
Case Study 1
Case Study 1 introduced us to Andrea, aged 64, who has just finalised her divorce from Carl.
Her financial aims were to:
- ensure she can generate a sustainable income throughout retirement;
- review the suitability of the assets she has received from Carl as part of the divorce settlement;
- improve the tax-efficiency of her current financial arrangements
| Question | Our Analysis |
|---|---|
| State the additional information that a financial adviser would require in order to advise Andrea on the suitability of the assets that she has received from Carl in the divorce settlement to meet her financial objectives. | The fact-finding section of our analysis for Andrea covered this in full, and we had included a specific question relating to the additional information needed on the OEICs and pharmaceutical shares received from Carl. |
| Explain, in detail, to Andrea the current and future tax treatment of the individual equities and OEICs that she has received from Carl. | The taxation of both these assets was always likely to be tested, so full model answers were provided. |
| Explain the key reasons why Andrea should invest some of her current cash holdings in other asset classes. | It was clear from the case study that Andrea had too much held in cash and therefore we had covered, in detail, the reasons for reducing the holdings and investing in other assets. |
| Explain the issues that Andrea should take into consideration when exploring the options available to her for future PMI cover, following the termination of her membership of Carl’s employer’s scheme. | Whilst we did not cover this specific question, throughout our analysis, we had considered some of the key issues relating to the PMI scheme which could have been adapted to help answer this question. |
| State six benefits and six drawbacks for Andrea of retaining the existing portfolio of individual pharmaceutical shares. | Our analysis provided model answers for the pros and cons of retaining the shares. |
| Explain to Andrea why it is important to review her pension arrangements in advance of retirement. | Whilst we had not covered a review question relating to pensions specifically, we did look at the issues relating to reviewing her finances more generally. Some of these points could have been used to answer this question. We had also detailed the factors to consider before advising Andrea on her retirement objectives, again we hope candidates could have adapted these model answers to address this question. |
| Recommend and justify a range of actions that Andrea could take to improve the tax-efficiency of her financial arrangements. | Improving tax efficiency was one of the client’s stated goals, so we had anticipated a related question and our analysis had therefore covered this in full. |
Case Study 2
Onto case study two where we met Joshua and Amina, a married couple with three children.
Their financial aims were to:
- review and improve their existing protection arrangements;
- review the ongoing suitability of the company structure for Joshua’s business;
- improve their current retirement savings provision.
| Question | Our Analysis |
|---|---|
| Explain, in detail, to Joshua and Amina how they could make use of the existing Limited company structure to improve their current financial arrangements. | We had analysed in detail the potential benefits of maintaining the Limited company structure. |
| Explain briefly to Joshua how his future profits would be treated for tax purposes if he decides to become self-employed. | Whilst our analysis hadn’t specifically covered the taxation of future profits, we had covered the benefits of becoming self-employed. We hope candidates could have picked up the additional marks on this question by also stating the points relating to the tax rates and allowances that would apply to the profits. |
| State five advantages and five disadvantages for Amina of investing the bonus in her employer’s workplace pension scheme, rather than taking this as salary. | We are pleased to say we had covered this exact question in our analysis. |
| Explain to Joshua how the target date fund held by his qualifying workplace pension scheme operates. | Our analysis hadn’t covered the workings of the target date fund. We hope candidates were able to use their existing knowledge to pick up good marks here. |
| Explain to Amina why she should review the fund choices in her Stocks & Shares ISA and pension fund on a regular basis. | Our analysis included a number of review questions which could have been used to pick up the majority of marks on offer here. |
| Identify the key areas of weakness in Joshua and Amina’s current protection arrangements. | Our ‘SWOT’ analysis table detailed the weaknesses of their financial arrangements. We also included a specific question in relation to their protection arrangements. |
| Recommend and justify a suitable personal protection product that would provide a tax-free lump sum for Amina in the event of Joshua’s death prior to the children attaining age 18. | We hope candidates picked up on our Top Tip for ‘Recommend and justify’ questions relating to protection and they were able to identify that the examiner was looking for a policy to provide a ‘LUMP SUM’ on ‘DEATH’ hence a term assurance plan - not CIC, Income protection or family income benefit (FIB)! The generic section in our analysis covered details of term assurance and the recommendations we provided on the FIB features could have been used for a term assurance policy. |
| Identify eight key issues that a financial adviser should discuss with Joshua and Amina at their next annual review. | This is a standard question which we see in most of the R06 exams, so we had included this exact question within our analysis. |
Chartered Insurance Institute (2024). R06 – Financial planning practice: April 2024 Examination Guide. Retrieved from www.cii.co.uk.
This was a typical R06 paper. Core financial planning skills were tested with standard fact-finding and review questions and a standard ‘recommend and justify’ question. Analysis skills and technical knowledge were tested with questions about their existing funds and the taxation of their arrangements, which all could have been anticipated from the case studies.
From the examiner’s comments, it appeared some candidates may have tripped up on the questions that used the wording client’s ‘arrangements’. Answers would need to have included details, not just on the client’s existing policies but all arrangements in relation to their finances such as future State Pensions and salary structure.
That said, overall examiner comments were positive, and candidates who were familiar with the R06 questions and had used our analysis would have performed well in this exam.
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!
