Our Post-Exam Review of the September 2021 CII R06 Exam
The question paper from the September 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 John and Karen, a married couple with two small children. John was self-employed, and Karen did not work but was considering returning to part-time work in 2 years’ time.
Their financial aims were to:
- arrange for adequate protection to be in place for their new mortgage
- ensure John’s income is structured in an appropriate manner
- ensure that they have sufficient assets to enable them to retire when John reaches 60
|(i) State six benefits and six drawbacks for John of becoming an employee of his current client. (12) |
(ii) Explain briefly to John the reasons why deciding to remain self-employed may cause him problems from a tax perspective. (4)
|We had provided a table covering the advantages and disadvantages of John being employed.
We had included analysis on the implications of John being treated as an employee as well as a table including the disadvantages of him staying self-employed.
|(i) State the reasons why Karen should consider making a regular pension contribution even though she has no earned income. (8) |
(ii) Explain to John and Karen how the Marriage Allowance could be used to improve their current tax position. (8)
|We had analysis on the benefits of making monthly contributions into pensions and also analysis within the second case study on why a client should consider increasing contributions, some of which would have been used to apply to Karen’s situation.
The Marriage allowance was covered in full and candidates should have scored full marks here.
|Explain to John how his benefit in his former employer’s defined benefit occupational pension scheme would be treated if the scheme enters the Pension Protection Fund. (8)||We had included a question on the protection John would receive if the PPF took over his former employer’s pension scheme.|
|(i) Identify the key reasons why John’s current investment strategy for his personal pension may not be suitable for him over the long-term. (7) |
(ii) Outline the benefits for John of using the services of a financial adviser on an ongoing basis to review his pension investment strategy. (10)
|We had included a table on the advantages and disadvantages of John being invested in a cautious lifestyle fund.
Within our generic section, we had included the benefits of receiving and acting upon advice from a financial adviser which could have been used to answer this question.
|State five benefits and five drawbacks of replacing John and Karen’s existing level term assurance policy with a suitable decreasing term assurance policy. (10)||Within our generic section, we have the necessary product information on decreasing term assurance policies as well as analysis on their current mortgage situation all of which could have been used to answer this question.|
|Explain to John and Karen why they should consider using Lifetime ISAs for the purpose of long-term savings. (8||Within Section 8 - our self-test questions we had included a question on the main features and benefits of a Lifetime ISAs which should have enabled candidates to score maximum marks.|
Case Study 2
Onto Case Study 2 where we met Steve and Trish aged 65 and 62. They had two adult children, one of which had learning difficulties.
Their financial aims were to:
- ensure that their financial arrangements are tax-efficient
- maximise the value of their estate for their beneficiaries
- maintain their standard of living in retirement
|State the additional information that a financial adviser would require to advise Steve and Trish on their savings and investments. (15)||We always include fact find questions and model answers in our analysis, so this was covered in full.|
|Identify six reasons why a financial adviser should not solely rely on a computer-based risk profiling tool to confirm Steve and Trish’s attitude to risk. (6)||This question was covered in our generic section and candidates, therefore, had the necessary information to score full marks.|
|(i) State three benefits and three drawbacks of Steve deferring his State Pension. (6) |
(ii) State the key factors that a financial adviser should take into consideration before recommending a fund switch within Trish’s holding as part of her employer’s qualifying workplace pension scheme. (10)
|We had included the ‘factors’ that Steve should consider before deciding whether to defer his State pension which could have been used for the first part of this question.
We had covered the drawbacks of being invested in cash generally for the clients as well as a self-test question explaining to Trish why she should consider moving some of the cash held in her ISA into a range of actively managed funds. These model answers could have been used to answer this question.
|(i) Explain to Steve and Trish why they should both set up Wills. (10) |
(ii) Recommend and justify the actions Steve and Trish could take to immediately reduce their Inheritance Tax liability. (8)
|This was signposted in the case study so our analysis covered how Steve’s estate would be dealt with and distributed upon death as well as what would happen if they both died. The fact that their son had learning difficulties was also covered and should have been included in part (i) of this question.
We had also included a question on the recommendations and justifications to maximise the value of their estate which included the actions they could take now to reduce their liability to IHT.
|State the key information that a financial adviser would need to obtain relating to Steve’s existing pensions, before making a recommendation to consolidate them. (12)||We had included the benefits and drawbacks of Steve consolidating his personal pensions which included charges, any guarantees, exit penalties, all of which could have been used to answer this question.|
|State eight factors that a financial adviser should take into account when reviewing Steve and Trish’s investments at their next annual review. (8)||A review question is always included in the exam so we had provided a model answer specifically on their pension arrangements which could have been adapted to pick up most of these marks.|
Overall, this paper seemed to ask fair questions based on the information given in both case studies, although it was a surprise to see nothing specifically asked about the son with serious learning difficulties (other than needing to have been mentioned as part of the question/answer on Wills).
We are confident that anyone who had used our analysis in preparation for their exam could have provided sufficiently in-depth answers to have gained a 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!