Our Post-Exam Review of the July 2021 CII R06 Exam
The question paper from the July 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 Dan and Sara a married couple with two small children.
They were both employed with employer benefits. They had an offset mortgage along with stocks and shares ISAs and inherited unit trusts.
Their financial aims were to:
- ensure that their financial protection arrangements are adequate for their needs
- arrange a suitable savings strategy to pay for their children’s university costs
- ensure that their savings and investments are appropriate for their needs
| Question | Our Analysis | |
|---|---|---|
| State the additional information that a financial adviser would require about Dan and Sara’s existing financial arrangements, to assess their current financial position. (15) | This aim was covered with various pieces of analysis; firstly we commented on their existing protection arrangements; then the further information that would be needed before advising them in this area. | |
| Explain to Dan and Sara how their current offset mortgage operates. (8) | Our analysis included an explanation of how Dan and Sara’s offset mortgage works. | |
| State the process that a financial adviser should follow in advising Dan and Sara how to establish a suitable strategy for their savings and investments to meet their future objectives. (10) | We had included the process an adviser should follow when advising on investment planning which could have been used to answer this particular question. | |
| State five benefits and five drawbacks of Dan and Sara setting up Junior ISAs to fund their children’s potential university costs. (10) | We had included a table of the pros and cons of saving for the university costs via any existing CTFs or Junior ISAs. | |
| State five benefits and five drawbacks of Sara joining her employer’s group PMI scheme. (10) | Our analysis included the features of PMI, the factors that should be considered before making a decision to join the scheme as well as the tax implications; within this candidates could have picked out the benefits and the drawbacks. | |
| Identify the benefits of Dan and Sara establishing a family income benefit (FIB) policy for their family’s protection needs. (10) | We had included a table with the details of a FIB and the justification for taking it out; this could have been used to answer this question. | |
| Recommend and justify the actions that Dan and Sara could take now to improve the tax efficiency of their current financial arrangements. (11) | We had included analysis on what Dan could do to improve the situation regarding the tapering of his income tax personal allowance as well as why they should both consider increasing their pension contributions. | |
Case Study 2
Onto Case Study 2 where we met June aged 71; her husband had recently died following a heart attack. She had two children and four grandchildren with various investments including an inherited SIPP.
Her financial aims were to ensure that:
- she has sufficient income throughout retirement
- her investments meet her ongoing needs
- her estate is passed to her children in an IHT efficient manner
| Question | Our Analysis | |
|---|---|---|
| Explain why June should be treated as being a vulnerable client and identify the actions that a financial adviser should take due to her vulnerability during the advice process. (10). | This had clearly been signposted in the case study and so we had covered this in full in our analysis. | |
| State the further information that a financial adviser would require to enable them to identify a suitable level of ongoing income for June, following the recent death of her husband. (12) | We had included a fact-finding model answer regarding ensuring she has enough income throughout retirement as well as the factors that would need to be considered. | |
| Identify and explain the various methods by which June could draw benefits from Colin’s pension arrangements (12) | We had included the options available to June from the SIPP she had inherited from Colin. | |
| Explain to June why retaining Colin’s portfolio of AIM shares may not be suitable for her. (10) | We had included a section on the suitability of June retaining the AIM shares which should have enabled candidates to pick up most marks on offer. | |
| Explain to June why she could consider using a combination of income and capital withdrawals from her inherited OEIC portfolio to provide her with additional income. (10). | We had included a table that explained how June could maximise income using her ISAs and OEICs (as well as his SIPP). | |
| State seven benefits and seven drawbacks for June of proceeding to set up a discounted gift trust. (14) | We had included an explanation of what a DGT is and how one could help secure an income in retirement as well as help with IHT. | |
| State eight factors that an adviser should take into account when reviewing June’s income needs at the next annual review meeting. (8) | We had included the model answer to the factors an adviser should consider when reviewing a pension at an annual review, much of which could have been used to answer this question. | |
Overall, this paper was fair and provided a good mix of technical and fact-finding questions, including some well-signposted topics in the case studies along with some information that didn’t seem to appear in the questions.
We feel sure that anyone using our analysis would have been able to provide a comprehensive answer to each of the questions in this paper.
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!
