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cii r01

R01 exam: how to pass

The CII’s R01 exam, Financial Services, Regulation and Ethics, has a pass rate of 63.77% for 2018 (the latest available).

The exam has 100 questions, and you have 2 hours to complete it. 87 questions are single-response questions that only need one answer. 13 of the 100 are pesky multiple-response question that require more than one answer. These are much harder to answer.

Here are 6 tips to make sure you pass the exam first time – or at least make it more likely!

  1. Put in the hard yards. The CII recommend around 60 hours of study and most people will, unfortunately, need this and perhaps more. Why? Because R01 covers a really broad syllabus ranging from an overview of the savings, investment and pension products, to social security benefits and legal aspects like LPAs. The main focus is, of course, regulation and this isn’t most people’s idea of fun!
  2. Work smarter, not harder. It’s not just about how much study you do, but it’s also about the quality of your study. Most people learn best by ‘doing stuff’, rather than just reading (which is passive). For example, use highlighter pens, write summary notes and use the CII online RevisionMate practice questions. You might also use our audio material so that you can learn on the go.
  3. Focus on chapters 5, 6 and 7 of the CII R01 study text.  The R01 exam questions are not allocated equally across each chapter in the study text. So if time is short, why wouldn’t you focus on the chapters that are most heavily examined? These three chapters not only account for all of the tricky multiple response questions (which will require a greater level of understanding), but also over half the overall questions in the R01 exam.  In other words, you are likely to fail R01 without a decent grasp of this content.
  4. Focus on the content you don’t know. You are likely to be familiar with at least some of the content. As few people will read the study text from cover to cover, focus your reading on the bits you are unfamiliar with. Why? The fact is that some knowledge goes a long way. Even if you don’t know the answer to a question, a little knowledge will help you to eliminate one or more of the incorrect answers. This leads me on to the next tip.
  5. Guess! Questions in R01 are marked positively so if you guess and get it wrong, you don’t lose anything. If you get it right then, bingo, one mark closer to the pass mark. Use a process of elimination to reduce the likely number of options but if in doubt, guess!
  6. Read the exam questions twice. Trust me, if the question gives you information, you’ll need to use it somehow. The CII doesn’t give information to just ‘pad out’ a question. So read the question twice and ask yourself: ‘how do they expect me to use this information?’.

R01 resources:

Click here for our FREE R01 practice question

Click here for a student’s point of view on R01

Be prepared. Good preparation leads to success. If you want to know how you can learn on the go and fit it in around everything else, click here for details.

Until the next time

The Diploma Doctor

R03 exam

R03 exam: how to pass

The CII’s R03 exam, Personal Taxation, has the lowest pass rate for the core R0 exams. Figures for 2018 (the latest available) show that R03 had a pass rate of just 52.99%. And do you know what, it will probably feel tough.

The CII R03 exam has 50 questions, and you have 1 hour to complete it. 28 questions are single-response questions that only need one answer. 11 of the 50 are pesky multiple-response question that require more than one answer. These are much harder to answer.

Here are 10 tips to make sure you pass the exam first time – or at least make it more likely!

  1. Put in the hard yards. The CII recommend around 60 hours of study and most people will, unfortunately, need this and perhaps more. Why? Because R03 covers all the main aspects of UK taxation – income tax, capital gains tax and inheritance tax. It also includes the taxation of investments. But it also includes national insurance and VAT and these are likely to be unfamiliar territory for most people.
  2. Work smarter, not harder. It’s not just about how much study you do, but it’s also about the quality of your study. Most people learn best by ‘doing stuff’, rather than just reading (which is passive). For example, use highlighter pens, write summary notes and use the CII online RevisionMate practice questions. You might also use our audio material so that you can learn on the go. Click here for details.
  3. Focus on chapters 9, 10 and 11 of the CII R03 study text.  The CII R03 study text follows the sequence of the syllabus. The questions are not allocated equally across each chapter in the study text so if time is short, why wouldn’t you focus on the chapters that are most heavily examined? These three chapters not only account for all of the tricky multiple response questions (which will require a greater level of understanding), but also half the overall questions in the R03 exam.  Click here to see the R03 exam syllabus.
  4. Focus on the content you don’t know. Most people will be familiar with some elements of the content. As few people read the study text from cover to cover, focus your reading on the bits you are unfamiliar with. Why? The fact is that some knowledge goes a long way. Even if you don’t know the answer to a question, a little knowledge will help you to eliminate one or more of the incorrect answers. This leads me on to the next tip.
  5. Guess! Questions in R03 are marked positively so if you guess and get it wrong, you don’t lose anything. If you get it right then, bingo, one mark closer to the pass mark. Use a process of elimination to reduce the likely number of options but if in doubt, guess. Never leave a question unanswered.
  6. When studying, don’t get bogged down in lengthy complex calculations. A lack of time in the exam will probably be your biggest challenge with R03. That’s the bad news. You have just over a minute to answer each question. So the good news is that the CII can’t expect you to do long complicated calculations because you won’t have time. As a result, when revising, don’t seek out the most complex scenarios because they can’t test you on them.
  7. Practice, practice, practice. There really is no substitute for answering R03 practice questions. Start using these early on in your preparation. Most people learn from their mistakes – so make lots of them during your prep so you don’t make them in the exam.  Don’t leave practice questions until just before you sit the R03 exam.
  8. Complete the R03 CII exam guide at least twice. As I said earlier, time pressure is the biggest issue for many people. Do your practice runs under exam condition so you get a feel about what it’ll be like in the exam. You also get familiar with the tax tables and the information they provide in the exam for you (which you don’t need to remember). The CII exam guide is the best guide there is as to what your actual exam will look like. Click here to access this.
  9. Read the exam questions twice. Trust me, if the question gives you information, you’ll need to use it somehow. The CII doesn’t give information to just ‘pad out’ a question. So read the question twice and ask yourself: ‘how do they expect me to use this information?’.
  10. Take a calculator into the exam. Around 10-15 questions in a typical exam will need a calculator. Whilst many of these are straightforward, you’d be surprised how many people turn up on our workshops and can’t use a calculator. So practice beforehand and make sure you are familiar with your calculator.

R03 exam resources:

Click here for our FREE practice questions

Be prepared. Good preparation leads to success. If you want to know how you can learn on the go and fit it in around everything else, click here for details.

Until the next time.

The Diploma Doctor

R05

CII R05 exam: FREE practice questions

Are you revising for the CII’s R05 exam? Know someone who is? Want to test your R05 knowledge? Then read on…..!

We’ve put together 10 multiple choice questions for you as a taster of what you can expect in the R05 exam. This exam has a pass rate of 76% which makes it the easiest CII R0 exam.

That said, you should still expect to be tested on areas such as state benefits, general insurance products such as PMI, long term care and business assurance so just about everyone will still need to brush-up on the more unfamiliar elements of the syllabus.

Click here for the CII R05 exam syllabus. Be aware. The number of questions you will get in the exam are NOT spread equally across the syllabus.

We’ve helped over 6,000 people prepare for the CII R0 exams over the past 12 months (1st November 2018 to the 1st November 2019). We don’t sell multiple choice questions but we are here to help as much as we can with your R05 exam.

Now, onto the practice questions. See how well you do on these. You’ll find the answers at the end of the post.

R05 questions

All figures are based on the 2019/20 tax year.

1. John is worried about providing an income for his family if he is unable to work through accident or sickness over the long term. Which protection policy would be MOST suitable?

A. Personal accident and sickness

B. Accident, sickness and unemployment cover

C. Critical illness

D. Income protection insurance

2. Usef, age 68, recently had a stroke and he now needs supervision. Which state benefit will he qualify for as a result?

A. Attendance allowance

B. Personal independence payment

C. Carers’ allowance

D. Disability living allowance

3. A couple want to arrange life cover to meet an inheritance tax liability whilst keeping costs to a minimum. If they write the policy under a suitable trust, the BEST way of arranging the whole of life policy is:

A. as two single life of another policies

B. on a joint life first death

C. on a joint life second death

D. as two single life policies

4. What tax is paid on the proceeds of an offshore life policy on someone who is a UK resident when it is surrendered?

A. Income tax is paid on the full surrender value

B. Income tax is paid on the amount the value exceeds the premium(s) paid

C. CGT on the full surrender value

D. CGT on the amount the value exceeds the premium(s) paid

5. Ami has just received a £1/2 million lifetime transfer from her father. What type of life policy would be MOST suitable to pay the potential inheritance tax liability?

A. Whole of life

B. Level term

C. Decreasing term

D. Gift inter vivos

6.  Here is a description of a benefit provided by an income protection insurance policy: ‘this benefit is paid if someone is unable to return to their previous work, but can undertake some lower paid work elsewhere.’  What is the name of this benefit?

A. Proportionate benefit

B. Recurrence benefit

C. Rehabilitation benefit

D. Waiver of premium benefit

7. The typical survival period on a critical illness policy is:

A. 4 days

B. 28 days

C. 6 months

D. 12 months

8. Mo is concerned about the care and medical treatment he will receive if he loses mental capacity.  His current health is deteriorating, but he still has capacity. What type of new arrangement, if any, would be suitable?

A. Power of attorney

B. Enduring power of attorney    

C. Lasting power of attorney

D. None. His deteriorating health means that it is too late to make any arrangement

9.  Mavis is seeking funding from her local authority towards the cost of her long term care.  Her total income is £200 per week and she has assets of £20,000.  What would the local authority assess her weekly income as being (before the personal expenses allowance is deducted)?

A. £200

B. £212

C. £223

D. £224 

10. With partnership protection, which legal arrangement would NOT normally qualify for IHT business relief?

A. Automatic accrual

B. Buy and sell

C. Cross-option agreement

D. shareholder trust

R05 Resources

Here are some other tips and information that you might find useful:

Click here for tips on how to approach the R05 exam

Preparation tips and exam technique for R05. Click here

Answers: 1: D; 2: A; 3: C; 4: B; 5: D; 6: A; 7: B; 8: C; 9: C; 10: B.

Remember, good preparation is the key. Hope that you found this useful. Until the next time

The Diploma Doctor

CII R04 exam

CII R04 exam: Free practice questions

Are you revising for the CII’s R04 exam? Know someone who is? Want to test your R04 knowledge? Then read on…..!

We’ve put together 10 multiple choice questions for you as a taster of what you can expect in the R04 exam. This exam has a pass rate of just 57.89%.

Click for the CII R04 exam syllabus. This shows the distribution of questions throughout the R04 exam and where those pesky multiple-response questions are.

We’ve helped over 6,000 people prepare for the CII R0 exams over the past 12 months (1st October 2018 to the 1st October 2019). We don’t sell multiple choice questions but we are here to help as much as we can with your R04 exam.

What we do offer is unique R04 MP3 audio material, written by the authors of the CII study text. This provides over 5 hours of dedicated R04 material that enables you to fit your study around your business and social life – not the other way around.  Click here for further details.

Now, onto these practice questions. See how well you do on these R04 exam style questions. You’ll find the answers at the end.

R04 questions

All figures are based on the 2019/20 tax year.

Questions 1 to 6 inclusive have only one correct answer.

1. Susan reached her State pension age in 2015.  She started working in 1977, was never contracted out and was always employed. What earnings related State pensions, if any, does Susan receive?

A. None, she didn’t qualify for earnings related pensions

B. S2P only

C. SERPS and S2P only

D. State graduated pension, SERPS and S2P

2. Jamie, who is 46, has taxable earnings of £40,000.   His employer wants to pay a pension contribution of £90,000 into a pension on his behalf in the current tax year. No other contributions have been paid and he has no unused annual allowance to carry forward.  How much will the annual allowance charge be and who will be responsible for paying it?

A. £10,000 payable by Jamie

B. £10,000 payable by Jamie’s employer

C. £20,000 payable by Jamie

D. £20,000 payable by Jamie’s employer

3. An individual had benefits valued at £2.1 million on 5 April 2006 and applied for primary protection.  What will their primary protection factor be?

A. 28.6%

B. 40%

C. 60%

D. 71.4%

4. Which employee would be an eligible jobholder?

A. Amy, who is age 32 and who has a salary of £19,000

B. Pradeev, who is age 62 and has a salary of £9,000

C. Brian, who is age 18 and who has worked for them for 6 months

D. Laura, who is age 66 and has a salary of £17,000

5. Harry left his company’s defined benefit scheme after completing 18 months of service and he has elected to take a return of his personal contributions.  If the gross refund is £32,000, how much will Harry receive?

A. £16,000

B. £22,000

C. £25,600

D. £32,000

6. How, if at all, will any protected payment increase between the calculation of the starting amount and the date an individual reaches their State pension age?

A. It will not increase

B. It will increase in line with the national average earnings index

C. It will increase in line with the triple lock guarantee

D. It will increase in line with the consumer prices index

The remaining questions – 7 to 10 – have more than one correct answer.

7. Jane was a member of an occupational money purchase scheme for 8 months before she left the scheme last July. What options MUST the scheme offer her?

A. Refund of her contributions

B. Preserved benefit

C. The scheme does not have to offer any preserved benefits

D. A transfer value

8. What are considered to be potential advantages of taking an income via a flexi-access drawdown?

A. Guaranteed level of income

B. Funds remain invested and have the potential to achieve capital growth

C. The member can adjust the income levels to help manage their income tax liability

D. Income is paid tax-free to the member

E. The full tax free cash lump sum can be taken at commencement

9. Sunil is writing a suitability report having recommended a drawdown arrangement to a client. What risk warnings does he have to include to meet the FCA COBs requirements?

A. The levels of income provided may not be sustainable

B. Annuity or scheme pension rates may be at a worse level in the future

C. Regular reviews must be undertaken

D. There may be tax implications

E. Drawdown pensions are complex and so advice must be taken

10Liam has a SIPP with a current fund value of £350,000.  It holds a commercial property and it borrowed £50,000 to finance this purchase three years ago. If Liam would like to use the SIPP to buy a further residential flat, commercial property and some shares in his own limited company, the SIPP:

A. could borrow a further £150,000 if necessary towards the purchase of a second commercial property

B. is able to purchase the flats

C. can purchase shares in Liam’s limited company

D. scheme administrator will be subject to an unauthorised member payments charge of 40% of the value of the prohibited asset if it invests in taxable property

E. scheme administrator will become liable to the scheme sanction charge of 15% of the value of the prohibited asset if the SIPP invests in taxable property

R04 Resources

Here are some other tips and information you might find useful:

CII R04 exam: the 5 myths. Click here

Five top tips for R0 exam success – part 1. Click here

Five top tips for R0 exam success – part 2. Click here

Answers: 1: C; 2: C; 3: B; 4: A; 5: B; 6: D; 7: B and D; 8: B, C and D; 9: A, B and D; 10: C and E.

Remember, good preparation is the key. If you want to know how to learn on the go, then click here. Hope that you found this useful. Until the next time

The Diploma Doctor

r02

R02 exam: FREE practice questions

Are you revising for the CII’s R02 exam? Know someone who is? Nothing better to do and want to test your R02 knowledge? Then read on…..!

We’ve put together 10 single-response multiple choice questions for you as a taster of what you can expect in the R02 exam. With this exam, your main challenge isn’t completing it in the time allowed (like R03). It’s more about understanding a very wide range of investments solutions – some of which, you probably won’t have come across before.

We’ve helped over 6,000 people prepare for the CII R0 exams over the past 12 months (1st July 2018 to the 1st July 2019). We don’t sell multiple choice questions but we are here to help as much as we can with your R02 exam.

What we do offer is unique R02 MP3 audio material. This provides around 4 hours of dedicated material that enables you to fit your study around your business and social life – not the other way around.  Click here for further details.

Now, onto the practice questions. These are based on the 2019/20 tax year. See how well you do on these R02 exam style questions. You’ll find the answers at the end.

Here goes……..

1. In a period when interest rates have fallen substantially, the nominal value of a conventional fixed interest security at maturity will:

A. increase significantly.

B. decrease significantly.

C. remain constant.

D. increase in line with inflation.

2. A government can use fiscal measures to address declining GDP by:

A. reducing the Bank of England’s target inflation rate.

B. increasing the rate of Value Added Tax.

C. reducing the level of gilt issues.

D. reducing the burden of Corporation Tax.

3. A financial adviser has recommended collective investments which are negatively correlated to each other. This will ensure that they:

A. are capable of generating income and growth.

B. have a degree of diversification.

C. have a combined beta of 0.

D. have an alpha with a negative value.

4. Portfolio X consists of blue chip ordinary shares and portfolio Y consists of unlisted shares. What type of risk is likely to be significantly higher for portfolio Y when compared to portfolio X?

A. Market risk.

B. Event risk.

C. Inflation risk.

D. Liquidity risk.

5. If a client has a collective investment where the share price is currently at a significant discount to the net asset value, what type of investment is it?

A. Investment trust.

B. OEIC.

C. Exchange Traded Fund.

D. Unit trust.

6. Alicia has fully surrendered an onshore single premium investment bond with a chargeable gain of £20,000 after 5 years. If she has no other savings income and her taxable income is £36,000, she should be aware that:

A. the full gain would be subject to 20% income tax.

B. the full gain would be subject to an additional 25% income tax.

C. she would have a personal savings allowance of £1,000.

D. she would have a personal savings allowance of £500.

7. A client who invests in a new issue of VCT shares would benefit from its tax treatment because:

A. the proceeds on death will be free of inheritance tax.

B. income tax relief is available at 30% up to a maximum of £200,000 per tax year.

C. shares must only be kept for three years to benefit from income tax relief.

D. an investor can potentially carry back income tax relief to the previous tax year.

8. Neil has agreed to have his portfolio managed on a passive basis. This means that he:

A. believes active fund managers will consistently outperform the benchmark index.

B. believes active fund managers will consistently underperform the benchmark index.

C. has increased his risk profile.

D. has reduced his risk profile.

9. What is the running yield on a corporate bond that has a clean price of £114, a par value of £100 and pays 5.2% income?

A. 4.56%.

B. 5.2%.

C. 7.85%.

D. 8.6%.

10. When agreeing the benchmark for an investment portfolio with a client, what is it always important to do?

A. Select the lowest risk benchmark from the available choices.

B. Use one constructed using Modern Portfolio Theory.

C. Use one that matches the mix of assets in the portfolio.

D. Select a benchmark that is positively correlated with the portfolio’s underlying assets.

R02 Resources

Here are some other tips and information you might find useful:

CII R02 exam: the 5 myths. Click here

How to pass R02. Click here

Answers: 1: C; 2: D; 3: B; 4: D; 5: A; 6: D; 7: B; 8: B; 9: A; 10: C.

Remember, good preparation is the key. Hope that you found this useful. Until the next time

The Diploma Doctor

R0 exam: technique

It will hopefully go without saying that if you are sitting a R0 exam – well any exam really – it is also important to know about exam technique.

In a recent conversation, I was told that because most of the R0 exams are multiple choice, there is no such thing as exam technique. I don’t agree with this; technique will still make a difference for many people.

You should look at exam preparation as two parts; what you do before the exam and what you do in the exam itself.  I’ll now look at both of these areas in more detail.

Pre-exam preparation

Here are five tips on how to approach your pre-R0 exam preparation:

  1. Look at the syllabus and the learning outcomes.  This covers the scope of the exam and tells you what you should be able to do. It is important because the exam questions are based on the learning outcomes in the syllabus, not the study text. In R01, for example, there are 11 learning outcomes and the number of questions on each one varies from 29 to 2. Each learning outcome is not treated the same way and because of this, some areas should receive more study time than others.
  2. Study the CII Exam Guide. This is available as part of your exam entry via the CII’s on-line RevisionMate. The Exam Guide will give you the opportunity to see a complete exam paper. You should complete this at least twice under exam conditions.
  3. Read through elements of the CII study text. Unless you are new to the subject, just focus on the areas you don’t know. Look at the questions within the text and the useful summaries at the end of each chapter.
  4. Use the RevisionMate practice questions. These are based on each chapter of the CII study text and they’re intended to help you check you’ve remember what you’ve read. These are similar to the standard expected in the actual exam so make sure you use them.  
  5. Familiarise yourself with the tax tables. These can be found at the back of an Exam Guide. A lot of information will be provided such as the main allowances, tax rates and the main social security benefits.  The exam isn’t really about having to remember this information, it’s about using and applying it. So don’t spend time trying to remember stuff that you don’t need to.

Visit our dedicated revision hub if you want to access a free video or look at tips on a specific R0 exam. Click here.

To get a student’s point of view on R01, click here.

In the R0 exam: technique

Now, moving on, let’s look at some tips in the exam itself.  If you have revised thoroughly, an R0 exam shouldn’t be a problem.  That’s the theory.  Although there is not a great amount of exam technique involved in a multiple choice exam, most people will drop marks as a result of poor technique and some candidates will fail the exam because of it.

Here are seven golden rules to remember in a R0 exam:

  • Rule 1 – read the question carefully and consider all of the options before attempting to answer. It sounds so basic doesn’t it?  But from past experience, we know that candidates often get questions wrong because they didn’t read the question carefully, or didn’t understand all of the options, before answering it. Remember, if information is provided in the question, it’s there for a reason. You will be expected to use it in some way.
  • Rule 2 – Pay attention to words in bold type and words in capital letters.  For example, negative words will always be in bold capital letters. If is says ‘most likely’, this means that more than one answer could be correct. So the answer the exam is looking for should clearly be more correct than the other options.
  • Rule 3 – do not spend too long on any one question.  You will have just over one minute per question. So keep an eye on the time – you should complete 12 or 13 questions every 15 minutes. The R03 exam, in particular, is a challenge to complete in the time available.
  • Rule 4 – decide how you are going to attempt the questions before the exam.  You can work through all of the questions methodically answering each one in turn, or you may wish to concentrate on those you know best first.  It is possible to flag questions that you want to leave and return to them later, but make sure that you leave sufficient time to do so if you use this approach. Use a practice exam paper before the exam to work out what is best for you.
  • Rule 5 – if in doubt about an answer, then use a process of elimination. Often one or more of the alternative answers will immediately strike you as being incorrect or implausible.  Even if you only have a small amount of knowledge on a topic, you will often be able to eliminate one or even two of the possible answers – this increases your odds of successfully answering the question.
  • Rule 6 – make sure that you answer every question, even those where you have no idea of the correct answer.  The law of averages should mean that you get some marks for guessing!
  • Rule 7 – if you have time at the end, run through your answers or ‘flagged questions’ again to make sure that nothing has been missed and to check for obvious errors.

If you want to work smarter rater than harder, why not listen to our talking books so you can revise while you are on the go. These cover the technical content and also R0 exam technique.

Good luck with your exam and prepare well.

The Diploma Doctor

R0 exam

R0 exams: the power of using the ‘link method’


When studying for your R0 exams, here’s how the ‘Link Method’ can help you

If you’ve ever had a spontaneous thought, triggered by something else; maybe something you see or hear… or a particular smell, you’ll realise that there must be all sorts of ideas connected in your brain that you’re blissfully unaware of, until all of a sudden…  out one pops!

It’s how your brain works. Connections. And, contrary to what I was taught many decades ago at school, we now know that the brain continues to make new brain cells and new connections throughout life. Providing you give it reason to!

If you are revising for your R0 exams, you’ll need to be efficient and effective with your time. The brain learns by associating new information with that which you already know. One popular method that maximises the benefits of this is the link method.

The link method could help you to pass your R0 exams. So what is it? There are three elements to it:

  1. Break down complex ideas and find substitute words or parts of words to represent them.
  2. Create vivid mental images of those ideas by using your amazing imagination
  3. Find associations between those visual images

So lets have a closer look at each step.

Step 1. Substitute words. You’re aiming for a clear and distinct image associated with the idea it’s representing. If the word naturally lends itself to an image you can go straight to the next step. If not, break the word up into syllables and play ‘word association football’, paying attention to the sound blocks, to create memorable pictures associated with those sounds.

In some cases, a list of information may lend itself to you making up a story which includes all of the elements on the list.

It also works if you create an acronym. In the R06 exam, for example, we use the acronym PATHETIC WINE to provide a template to ensure that our answer to to a question covers all the bits that the CII might give you a mark for. In most R06 exams, you’d get around 10% more marks if you SELECTIVELY included the following areas in your answers: Pension death benefits, affordability or budget; taxation; health; emergency fund; trusts; ISAs or National Savings Certificates; capacity for loss and attitude to risk; Wills and guardianship clauses;  inheritances that are expected; nomination forms for pensions and ethical considerations.

In the R01 exam, you can remember what makes a valid trust by using SOW: the subject (beneficiaries) must be clear, there must be an object (another name for the trust property), and Words. Although there is no particular prescribed form of trust wording, it must be clear that a trust was intended.

2. Vivid pictures. Since you’ll need to build strong connections between the ideas to use the Link Method, you will need memorable images, so don’t go for the obvious. Instead, go for something that stands out. At the very least, make sure that it’s an odd colour, bigger or smaller than normal. Remember the Von Restoff Effect and make it outrageous, rude, exaggerated, funny etc etc, because we know that it’s more likely to stick in your head. This makes it more likely you’ll pass your R0 exams.

3. Association.Now you need to imagine the first image doing something to the next image, which in turn does something to the next, etc etc, linking the ideas together like a string of pearls.

Use your imagination and run through the sequence a number of times until you can see that chain of events clearly in your mind, flowing just like a story. If nothing else, try and associate what you are learning with a client or work related scenario that you have, or might encounter.

And that’s the Link Method.

If you want to try our unique R0 exam talking books, click here

If you are interested in exam technique, click here for our video on top revision techniques.

Give it a go and let me know how you get on.

The Diploma Doctor

Based on an article by Memory and Mindset Coach, Lysette Offley, Genius Material. Click on the link for other useful study tips and to read the original article.

r0 exams technical changes

R0 Exams: technical changes

If you are sitting the CII’s R0 exams, there are some technical changes that you need to be aware of that have been (or will be) introduced from April 2019. These impact on the R01, R02 and R04 exams.

FSCS increase in compensation limits

The Financial Services Compensation Scheme (FSCS) pays compensation claims made against authorised firms that are unable to meet these claims due to insolvency or having ceased trading.

Tested: from 1.4.19

R0 exams affected: R01 and R02

What’s changed? From the 1st April 2019, the FSCS limits have changed as follows:

The compensation limit has been increased from £50,000 to £85,000 (the same as the cash compensation limit) for the following types of authorised firms:

Investment provision (fund managers)

Investment intermediation (e.g. IFAs)

Life and pensions intermediation

Home finance intermediation (mortgage brokers)

Long term care insurance – the limit has changed from £50,000 to 100% of the claim

FOS – increase to binding awards and changes to the definition of eligible complainants

The Financial Ombudsman Service or FOS deals with unresolved complains from eligible complainants.

Tested: from 1.5.19

R0 exams affected: R01, R02 and R04

What’s changed? For complaints about firms made after 1.4.19, the maximum FOS binding award has changed from £150,000 to £350,000.

For actions or omissions made by firms pre-1.4.19 (but received post-1.4.19), the limit rises from £150,000 to £160,000.

For actions or omissions made by firms pre-1.4.19 and received before this date, there is no change (still £150,000).

In all cases, the maximum compensation amount can also includes interest plus costs plus interest on costs.

In addition, the definition of eligible complainant has changed. The broad intention is to make FOS available to a wider range of people and organisations. Specifically, the definition of a:

qualifying charity has risen up to £6.5M

trustee of a trust with assets has risen up to £5M

small business is now defined as one with an annual turnover of up to £6.5M, and has fewer than 50 employees or a balance sheet of less than £5M

consumer buy-to-let consumers and guarantors are now included

Single Financial Guidance Body (SFGB)

This provides information, debt advice, money guidance and pensions guidance to consumers.

Tested: from 1.9.19

R0 exams affected: R01 and R04

What’s changed? Quite a lot! In January 2019, the SFGB replaced three previous organisations that provide financial guidance: Pensions Wise, The Pensions Advisory Service and Money Advice Service.

Click here for further details of SFGB

If you are sitting your R0 exam before 31st August 2019, you will be tested on the previous three bodies. See the CII website for your R0 exam to see confirmation of the technical changes on the web update for each exam.

Click here for details of our unique audio material

Hope this helps. As always, prepare well.

The Diploma Doctor

CII R01 exam

R03 exam – free practice questions

Are you revising for the CII’s R03 exam? Know someone who is? Nothing better to do but want to test your R03 knowledge? Then read on…..!

We’ve put together 10 single-response multiple choice questions for you as a taster of what you can expect in the R03 exam. As this exam is the hardest of the CII’s multiple-choice R0 exams with a pass rate of just 52.55%, every little helps.

We’ve helped over 6,000 people prepare for the CII R0 exams over the past 12 months (1st September 2018 to the 1st September 2019). We don’t sell multiple choice questions but we are here to help as much as we can with your R03 exam.

What we do offer is unique R03 MP3 audio material. This provides around 4 1/2 hours of dedicated R03 material that enables you to fit your study around your business and social life – not the other way around.  Click here for further details.

Now, onto these practice questions. See how well you do on these R03 exam style questions. You’ll find the answers at the end.

R03 questions

All figures are based on the 2019/20 tax year. They are based on the position in England and there is only one correct answer.

Here goes……..

1. Ben holds 3,000 shares in a UK listed company which declares a dividend of 70 pence per share. If he is a higher rate taxpayer and has already used his dividend allowance, how much tax will he pay on these dividends?

A £157.50

B £682.50

C £758.34

D £840.00

2. Jill, aged 52, has an income which is made up of a £25,000 salary, building society interest of £8,000 and dividends of £13,000. Her income tax liability is:

A £4,725

B £4,775

C £4,875

D £5,075

3. Javid has used all his Inheritance Tax (IHT) annual exemption for the current and previous tax year and decides to make the following additional gifts in this tax year:

A £10,000 to his granddaughter on her marriage

B £4,000 to his grandson on his 18th birthday out of normal expenditure

C £3,000 spread equally between four friends

D £75,000 to a UK charity

How much of Javid’s gifts would be liable to IHT if he were to die within 7 years?

A £2,000

B £8,500

C £9,500

D £13,000

4. To avoid a Capital Gains Tax liability on an asset purchased before leaving the UK without any held-over gains, an individual must be resident outside the UK for:

A 1 complete tax year

B 2 complete tax years

C 5 complete tax years

D 7 complete tax years

5. The Ramsay Principle has been used by the courts to:

A allow HMRC to obtain details of interest paid to UK residents by overseas banks

B penalise income shifting between spouses in small family companies

C allow HMRC to reduce penalties where a taxpayer, not under investigation, has made a voluntary disclosure

D consider a series of transactions with no commercial purpose except tax avoidance and ignore them for tax purposes

6. Marisa died on 30 September 2019 leaving an estate of £900,000 which did not include any residential property. She left £60,000 to a UK charity and the remainder to be split equally between her husband and her daughter. If she has not made any lifetime gifts, how much inheritance tax must her executors pay?

A £32,040

B £34,200

C £35,600

D £38,000

7. Frankie won a premium bond prize of £10,000 and has received dividends of £50,000 from both an Enterprise Investment Scheme (EIS) and a Venture Capital Trust (VCT). What is his tax position?

A Only the EIS dividend is taxable

B The dividends from the EIS investment and the VCT investment are taxable

C Only the VCT dividend is taxable

D Both of the dividend payments and the premium bond prize are taxable

8. Alicia has fully surrendered an onshore single premium investment bond with a gain of £20,000. If she has no other savings income and her taxable income is £32,000, she should be aware that:

A. the full gain would be subject to 20% income tax.

B. the full gain would be subject to an additional 25% income tax.

C. she would have a personal savings allowance of £1,000.

D. she would have a personal savings allowance of £500.

9. What is the MOST likely reason for a business to voluntarily register to pay VAT?

A They would be able to claim output tax on their purchases

B They would be able to claim input tax on their purchases

C They would be able to offset the VAT paid against their corporation tax bill

D They would then be able to reduce the price paid by customers for their products

10. In May 2019, Scott bought his first residential property for £945,000 which included £30,000 for fittings. Assuming this is his only property, how much stamp duty land tax would be payable?

A £30,750

B £32,250

C £35,750

D £45,750

R03 Resources

Here are some other tips and information you might find useful:

CII R03 exam: the 5 myths. Click here

Five top tips for R0 exam success – part 1. Click here

Five top tips for R0 exam success – part 2. Click here

Answers: 1: B; 2: A; 3: C; 4: C; 5: D; 6: B; 7: A; 8: D; 9: B; 10: C.

Remember, good preparation is the key. If you want to know how to learn on the go, then click here. Hope that you found this useful. Until the next time

The Diploma Doctor

CII R0 exam results

CII R0 exam results 2018

Which are the easiest R0 exams?

The CII have recently published the R0 exam results for 2018.
So which are hardest, and which are the easiest? The R0 exam results will be of interest to anyone who is looking to sit these CII exams so go into your exams with your eyes open.

Are all the CII R0 exams the same style/format?

You could be forgiven for thinking that this should be a straightforward question. It isn’t. Some of the variation in pass rates is not solely due to the subject matter, but how it is examined.

Only R05 (Financial Protection) use just the standard format multiple choice question. This means that you will be given a question followed by four options and only one of these will be correct.  R06 (Financial Planning Practice) is a written paper with not a single multiple choice question to be seen anywhere. In addition, the R06 case studies are issued 2 weeks before the exam so the examiners expect you to read-up around on the technical areas that are likely to be tested.

The other subjects – R01, R02 R03 and R04 all use the standard format multiple choice questions, and the much harder variant – the multiple response question. So how does this format of question differ? Instead of four options, you will get usually 5 or 6 options and more than one answer will be correct. To get a mark, you have to identify all the correct answers.

R07 (Advanced Mortgage Advice) is not covered by this analysis.

What are the CII R0 exam results?

Exam20182017201620152014
R0163.77%64.46%57.01%58.71%59.41%
R0259.99%62.79%57.92%54.00%55.99%
R0352.55%48.71%50.46%50.90%54.55%
R0457.89%55.04%54.07%49.53%54.09%
R0576.35%78.26%72.11%71.25%68.73%
R0677.69%73.04%73.23%71.27%67.56%

Source: CII website, excluding R07

What conclusions can we draw from this?

R01 – Financial Services, Regulation and Ethics.

In terms of CII R0 exam results, this is the third hardest R0 exam. This is partly because the regulations side of things – particularly to people new to the profession – is quite wide ranging. Many students find the content on the FCA a little dull.  The exam has 100 questions and 13 of these are those pesky multiple response questions.

For many people, this will be the first R0 exam they complete. As some of the content on products and legal aspects are also covered in more depth in the other R0 exams, this is a sensible strategy.

Click here to get a students point of view.

R02 – Investment Principles and Risk.

This is the fourth hardest exam statistically although there will be many people who would say it is harder than this. Again, the syllabus is huge and you will need to get your head around it. This exam is also 100 questions but 28 of these are multiple response. Many people regard a 50% success rate with this type of questions as being good going. So you can start to see why it is a difficult exam.

R03 – Personal Taxation.

Statistically, this is the hardest exam. There are 50 questions and 11 of these are multiple response questions.  With R03, you won’t be leaving the exam early. Of all of the R0 exams, this is the one that is most likely to put you under time pressure. There is a lot to do in an hour so you need to be well prepared and practised at answering questions.

Click here to view the 5 myths of R03.

R04 – Pensions and Retirement Planning.

In terms of CII R0 exam results, this is the second most difficult exam.  Like R03, it’s a one hour exam, there are 50 questions and 11 of these are multiple response questions.  The challenge with R04 is the subject matter – pensions is a subject that causes confusion for many new and more experienced people alike. Unfortunately, you’ll struggle to get through this without a decent knowledge of the HMRC rules such as annual allowance, LTA and the transitional protections.

R05 – Financial Protection.

This is the second easiest subject and for some people, this is a good place to start their R0 exam journey. There’s still a broad syllabus but protection products such as critical illness and income protection are relatively straightforward. And, of course, there are no multiple response questions.

R06 – Financial Planning Practice.

The statistics say that this is the easiest R0 exam. It is, but only if you get your head around the technique that you will need. This is a written exam that is based on two case studies that are issued 2 weeks before the exam. I’ve met few people who walked out of this exam thinking they’d failed yet 23% still do.  Be prepared to put some hard yards in within two weeks before the exam.

If you want our thoughts on what is the best order to sit your CII R0 exams, click here

If you want to know more about our R0 exam audio books, click here

Prepare well and pass first time.

The Diploma Doctor