Our Post-Exam Review of the July 2016 CII R06 Exam

It’s that time again when we nervously open the exam paper from the last R06 sitting and see how good we were at predicting the questions for our pre-exam analysis – of interest to CII R06 candidates.

Case Study 1

Case Study 1, this time, focused on John and Ann; a married couple with two children who have agreed to an amicable divorce.  Their goals were to: ensure adequate financial protection for their children until they finished their education; ensure their assets are invested in line with their attitude to risk; arrange for a suitable and tax‐efficient division of assets on divorce and ensure sufficient funding is in place to meet future university fees.

The exam followed the usual format with the first question on fact-finding – this time on the additional information needed to achieve their goal of a suitable and tax efficient division of assets on divorce.  Our analysis started with the main factors that we felt needed to be considered and continued with more specifics regarding their tax position and pensions.

It was obvious that a pension sharing question would come up and this was Question (b) where candidates were asked to explain offsetting and give 6 pros and 6 cons – for a total of 19 marks.  We had this fully covered in our analysis with enough detail to get most of the marks on offer.

We had a lot of detail on protection, obviously not knowing where the exam question was going to focus.  It turned out to be one the weaknesses in their arrangements following the divorce (these could have been picked out from the analysis) and a suitable life policy for John to protect maintenance payments.  We had five recommendations for setting up the policy so all candidates had to do was justify them to get another five.

Next, was a question on the multi-asset managed fund – quite a lot of marks as well (8).  We had information on what these funds are but didn’t specifically cover four benefits and four drawbacks. It will be interesting to see the model answer when this is available, but most delegates we know would have been able to explain how different asset classes work well when held in a pension fund.

The first case study had a total of 74 marks out of the total paper of 150, and we are pleased to say that most we had covered in enough detail to be on track for a pass.

Case Study 2

So onto the next case study – this one focused on Joe and Pam married with adult children.

We were told that Joe’s defined benefit pension scheme is in deficit so no surprise that the first question was ‘explain how his pension benefits would be treated under the Pension Protection Fund should the scheme become insolvent’.  We did, of course, have this completely covered in the analysis and candidates should have got the 8 marks on offer.

Next, a question on how financial advice is paid for; candidates needed to state four benefits and four drawbacks of their paying fund-based fees and on an hourly cost basis – 16 marks in total all covered off in our ‘generic section’ which delegates were directed to within the analysis.

Next, the question on topping up Pam’s basic State pension – again fully expected so full information was given on her making Class 3 and Class 3A National Insurance Contributions.

Part (ii) of the same question was a little more unexpected in that it asked candidates to identify the advantages of paying into a Personal Pension rather than buying added State pension.  This, we hadn’t expected so our analysis didn’t specifically cover this, but we believe that most well-prepared candidates would have used existing knowledge to have a very good stab at the answer here.

The next two questions on investments replicated exactly two questions we had in our analysis so we can confidently say we had covered the answers in full – as there were 19 marks on offer candidates must have been very pleased!

The penultimate question was also a dream for anyone using our analysis; ‘explain to Joe and Pam why an investment into a discretionary trust could be a suitable arrangement for their intended gift to the grandchildren’.  This has come up so many times before so we had plenty of detail in our analysis for delegates to get the eight marks.

Finally, the last question and, as is often the case, it was a review question; although the answer to our review question was more generic than the exam question, it was on IHT and we had plenty of information in the analysis for candidates to pick out what should be considered at the next annual review with regards to mitigating their liability.

Happy Candidates

All in all, we are delighted that our pre-exam analysis covered all the topics in the exam with no curve ball questions at all this time round.  Candidates must have been very happy about that!

Grab the resources you need!

If you’re studying for your CII R06 exam, and you’re wanting to walk into the exam feeling confident, 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!

Over to You…

If you’re planning on sitting R06 in October, on what areas will you focus your revision?