Our Post-Exam Review of the January 2023 CII R06 Exam
Last updated on August 3rd, 2023 at 7:31 am
The exam guide from the January 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 28 March 2023.
You can access the exam guide here.
Case Study 1
Case Study 1 introduced us to Jim and Carol, both aged 62 and married, planning to retire in six months’ time.
Their financial aims were to:
- Ensure they have adequate income in retirement
- Review the suitability of their investments in advance of their retirement
- Consider a range of options in respect of Carol’s inheritance and to review their potential IHT liability
Question Our Analysis
State the additional information that a financial adviser would require to enable them to advise Jim and Carol on how they could generate an adequate income in retirement. We supply fact finding model answers to each main objective and so this was fully covered.
Explain, in detail, to Jim and Carol why they might wish to purchase an annuity using some of their pension funds to meet some of their retirement income needs. We also provided the advantages and disadvantages of them buying an annuity with their pension funds.
Explain to Jim and Carol why it is important for them to regularly review the level of income that they draw from their pension funds, if they decide to set up flexi-access drawdown (FAD) arrangements We provided content on the safe withdrawal rate and stress testing which could have been used to answer this question as well as the factors they need to consider when reviewing their pensions at the next annual review.
Outline the reasons why Jim and Carol’s current investment holdings may not be suitable to meet their retirement needs Within aim 2 we had provided a model answer which commented on the suitability of their current savings and investments to use for retirement income as well as table of the benefits and drawbacks of their existing fund choices.
Explain how a deed of variation should be set up, and identify the key information that must be included in this document. This was covered in full with an explanation of how it is set up and the formalities which must be incorporated.
Identify the key factors that Jim and Carol should take into consideration when reviewing the ongoing suitability of their whole-of-life policy, when the policy reaches its first review date later this year. Within our self-test section we had included a question on the information needed to advise on the policy all of which could have been used to answer this question.
Recommend and justify the actions that Jim and Carol could take to improve the tax-efficiency of their existing financial arrangements. We had provided a model answer for this exact question.
Case Study 2
Onto case study two where we met Jenny, aged 48, who had recently finalised her divorce.
Her financial aims were to:
- Ensure her protection arrangements are adequate for her needs
- Consider investment options following the divorce settlement
- Execute the pension sharing order.
Question Our Analysis
State the additional information a financial adviser would require in order to advise Jenny on identifying a suitable level of emergency fund. We had provided analysis which covered why the holding in her existing cash account may be unsuitable some of this information may have been useful as a starting point for this question.
Explain to Jenny why it is important to review her current protection arrangements. Our analysis covered Jenny’s key weaknesses in her current protection arrangements which could have been used to answer this question.
Identify five benefits and five drawbacks for Jenny of taking out an individual Private Medical Insurance (PMI) policy in her own name. We included the factors that Jenny should consider before deciding on whether to take out PMI through her ex-husband’s company provider. This would have helped identify the drawbacks of taking out a policy in her own name as well as some of the benefits.
Outline the key factors that you would take into consideration when devising a long-term investment strategy for Jenny. The fact-finding model answer on consideration of investment options for Jenny following her divorce would have been useful in identifying the factors that would need to be taken into account.
Outline the options she has in respect of the pension sharing order and state the factors that a financial adviser should take into account when making a recommendation. Pension sharing was covered in full including the advantages to jenny as well as the strategies available to her and the factors an adviser would need to consider when suggesting a solution for the pension credit.
Jenny is considering using some of the cash lump sum from her divorce to pay her daughter’s university tuition fees and university living expenses. Explain to Jenny why a student loan might be a more suitable option. The information on student loans was given as well as a breakdown of tuition fees and maintenance loans all of which could have been used to answer this question.
Identify eight issues that a financial adviser should discuss with Jenny at the next annual review. Our review question for Jenny included the key events relevant to her that should be considered at a review.
Overall, this paper seemed to be at a similar standard to past exams albeit with some new areas such as student loans being examined.
We feel sure that students using our analysis to prepare for their R06 exam would have gained a good pass.
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!
