Our Post-Exam Review of the September 2022 CII R06 Exam
Last updated on August 3rd, 2023 at 7:35 am
The exam guide 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 Tom and Sara, both aged 64 and planning to retire on Tom’s 65th birthday.
Their financial aims were to:
- ensure that they have a sustainable income in retirement
- review their investments to ensure that they are suitable for their retirement
- consider an appropriate method of gifting lump sums to their grandchildren
Question Our Analysis
State the additional information that a financial adviser would require regarding Tom’s pension benefits in his former employer’s defined benefit pension scheme, in order to advise him and Sara on their retirement objectives. In our analysis, we include fact-finding questions on all financial aims; our first fact-finding question was on retirement planning which included all the information needed on Tom’s defined benefit scheme.
Explain to Tom and Sara the main issues that they should consider when deciding if they should use flexi-access drawdown (FAD) in retirement, rather than purchasing an annuity. In our analysis, we had included two tables: one that covered the advantages and disadvantages of them buying an annuity and the other on using flexi-access drawdown.
Tom and Sara are planning to assist their grandchildren with the purchase of their first homes in future years. Explain, in detail, the actions that Tom and Sara should take to ensure that they can use their OEIC holdings to provide tax-efficient lump sums for this purpose. Some of the information needed to answer this question was within our analysis: encashing amounts up to the CGT annual exempt amount, using a trust, and making use of the annual allowance for IHT.
Comment on the suitability of Tom continuing to hold the UK Commercial Property unit trust in his ISA. We had included a table that explained the benefits and drawbacks of maintaining their existing fund choices in their ISAs and OEICs which included the UK Commercial Property unit trust.
Tom and Sara are concerned about the treatment of their estate in the event of their deaths before they draw up their Wills. (i) Explain, in detail, how their assets would be treated in the event of the death of either Tom or Sara, if they died tomorrow. (ii) Identify the key instructions that Tom and Sara should include in their Wills. We had included the laws of intestacy for married couples with children and had commented on whether nominations existed for the pension schemes. We had also included the benefits of having valid Wills in place that included naming those responsible for administering the estate and providing clear instructions as to how the estate is distributed.
Recommend and justify the actions that Tom and Sara could take to improve the tax efficiency of their existing financial arrangements. Within the analysis, we had included the reasons why Tom and Sara should continue making pension contributions, using their annual gift allowances, making a Will and using Junior ISAs.
Case Study 2
Onto Case Study 2 where we met Leo and Karin, both aged 37, married with a daughter aged 7.
Their financial aims were to:
- ensure their protection arrangements are adequate for their needs
- arrange suitable retirement funding for Leo
- improve the tax-efficiency of their current arrangements
Question Our Analysis
State the additional information a financial adviser would require, in order to advise Leo and Karin on ensuring that the family is financially secure in the event of Leo’s death. Our first question was the fact-finding question on the information needed to advise Leo and Karin on their protection needs which included most of the information in the model answer.
Identify the key factors that a financial adviser should consider when reviewing the suitability of Leo’s existing income protection insurance policy. Within our analysis, we had covered off this question by including the factors to consider when advising Leo on whether to retain his existing income protection policy.
Explain, in detail, why setting up a limited company might be a more appropriate option for Leo, rather than remaining self-employed. We had included the benefits and the drawbacks of Leo’s incorporating his business which covered the model answer for this question.
Explain to Leo why he should set up a pension plan as soon as possible. Within our analysis, we had included why Leo should consider making regular contributions to a pension which included the majority of the model answer.
Outline the factors that Leo should consider before deciding whether to invest in a buy-to-let property as part of his retirement planning. We had included the benefits and drawbacks for Leo using a buy-to-let which could have been used to answer this question.
Explain to Leo and Karin why it is important for them to review the investment funds held in their stocks & shares ISAs on a regular basis. We had included analysis that covered why they should review their investment portfolio some of which could have been used to answer this question.
Identify eight issues that a financial adviser should discuss with Leo and Karin at the next annual review. Our last question within the main section was about the factors an adviser should take into account at their next annual review.
Overall, this paper was a fair test of the syllabus, and we feel confident that anyone using our analysis would have achieved 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!
