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CII R06 exam

R06 exam: April 2021

The case studies for the CII R06 April 2021 exam are now available. If you haven’t yet seen these, click here.

What do I do now?

The exam is Tuesday 20th April. The case studies are issued in advance of the exam for a reason – to let you to prepare for the exam. So if you have a limited knowledge of SSASs, IPDIs, divorce settlements, LPAs and the taxation of income from limited companies, for example, then now is the time to work on this.

The exam will test across a range of different aspects of financial planning that are based on two client case studies. You will not know the actual questions you will face until the exam day but it makes sense to prepare for any eventuality before then.

What areas should I focus on in the CII’s R06 April 2021 exam?

Based on the case studies, here are some of the areas (not exhaustive) that you should focus your preparation on in the CII’s R06 April 2021 exam:

Case Study 1: Jim and Helen

  • Suitable financial protection for Helen’s rent payments and/or using relevant life policies through their respective businesses to provide each other with protection
  • Describe the benefits of having a IPDI and/or how they work
  • Benefits of Jim’s business making pension contributions for him rather than drawing dividends and/or describe how both Helen and Jim can minimise their income tax liabilities for income taken from their businesses
  • How income can be drawn from Jim’s SSAS and/or the actions he could consider before retiring
  • Divorce settlements: pension attachment orders v pension sharing orders
  • Inheritance tax planning, for example: a fact finding question, how the RNRB works
  • Wills: problems with their existing arrangements and/or alternative will arrangements that meet their future needs
  • Review their financial circumstances (see past exam papers for examples of this type of question)

Case Study 2: Dante and Cara

  • Provide solutions to meet their protection needs, e.g. life cover /CIC for the shortfall of £150,000 on the interest-only mortgage (ignoring DIS) and IPI to provide income for Cara in the event of long-term sickness
  • Fact find question on protection, e.g. details of Dante’s existing IPI, whether nomination forms completed on DIS and existing pensions
  • Benefit and/or drawback of using different ways to repay the interest-only mortgage in 15 years, e.g. selling Dante’s rental property or encashing specific existing assets
  • Describe the characteristics or risks associated with some of their existing investments, e.g. rental property, commercial property fund in the Dante’s ISA, and Cara’s traditional with-profits fund
  • How suitable are their investments? Around half of their investible assets are in cash or bonds – this seem relatively high so this might be tested. These assets may not be held as tax efficiently as possible.
  • Part of one objective is to ensure their pensions are suitable. This means that you need to think about, for example, how the tapered annual allowance works
  • What are the benefits of arranging a health and care decisions LPA for Cara’s mother and/or how can one be set up? An outside bet would also be advance statements and decisions.

How does the CII’s R06 April 2021 exam compare with previous R06 exams?

Frankly, whoever wrote this exam did not have a great Covid lockdown! This R06 exam has a distinctly different feel about it. Unusually, case study 1 is a couple approaching retirement (rather than a young couple). Case study 2 is a more familiar ‘pre-retirement’ scenario but the client’s objectives are those usually addressed in case study 1.

These case studies are both high-octane. There is a lot of information provided – around double what you would expect and similar in quantity to that provided in AF5. In this exam, you’re going to need to read each case study multiple times to make sure you fully understand the nuances of the client’s circumstances.

The good news is that the client financial objectives in both case studies are mostly familiar ones. Having objectives such as ‘adequate income in retirement’, ‘mitigate inheritance tax’ and ‘protection in the event of death’ are all familiar and so we can learn from how these have been tested in the past.

Also, given the range of possible areas they could examine, the depth of knowledge required is more likely to be about breadth of knowledge, not depth.

The bad news is that both case studies are likely to be more ‘technical’ than the typical exam. Remember that R06 is, first and foremost, a planning exam so whilst this has the potential to test a range of technically demanding areas, hopefully it won’t. That said, anyone sitting this exam will need to prepare for any eventuality.

In a R06 exam, most of the questions will typically be based on the client’s stated financial objectives. Usually there are 6 to 8 of these spread across the two case studies. This time there are only 6 which is on the low side. This means there may be more than one question against each of the clients’ financial objectives and/or the examiners will test some generic areas. Given the scenarios, people should prepare for the former.

What do I need to do to pass the CII’s R06 April 2021 exam?

  1. Familiarise yourself with the clients’ circumstances. If you are provided with information, you will usually be expected to use it in some way. You should be able to apply your knowledge to their circumstances – generic answers will not usually score well.
  2. Revise and read around the technical aspects. Google is a good place to start, the CII R06 study text or use our useful R06 talking book.
  3. Be familiar with the technique and style of answers the CII will want. This is NOT just about applying your day job to an exam paper. Click here for a FREE copy of the last R06 exam to see what a past paper looks like. Pay particular attention to the style of questions and model answers provided.

How we can help

If you want to know the types of question that have been asked previously in R06, it’s not to late to download our R06 talking book. If you do, just listen the the financial objectives that link in with this specific exam to hear the types of question and answers based on previous R06 exams. Click here for full details.

And/or

Download our FREE 7 minute podcasts that look at R06 exam technique. Most people who fail R06 will do so by less than 5 marks – make sure you aren’t one of them.

Prepare well and be successful.

Ian Patterson

Ex-examiner and author of the CII’s study texts for CF8, J07 and AF6

r05 exam

R05 exam: how to pass

The CII’s R05 exam, Financial Protection, has the highest pass rate for the core R0 exams – 79%. So why do so many people come out of the exam thinking it was tough?

There is a simple answer. Whilst there are many areas in R05 that people may be familiar with like life assurance products, IPI and CIC, there are areas such as long term care, social security benefits and general insurance products, e.g. accident and sickness policies, that are not generally well known.

We also find that an increasing number of people start their R0 exams with R05. So instead of it being the last multiple-choice exam, it is the first. That makes it a different ballgame.

What does R05 look like?

The CII R05 exam has 50 questions, and you have 1 hour to complete it. All of the questions are single-response questions that only need one answer. There are none of those pesky multiple-response question that require more than one answer. These are much harder to answer.

10 tips on how to pass R05 first time

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. If you have experience of financial services, you probably won’t need this much preparation. If this is your first R0 exam, then you’ll need this and more.
  2. Work smarter, not harder. It’s not just about how much study you do; 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 4, 5, 6, 7, 9 and 10 of the CII R05 study text.  The CII R05 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? Just these six chapters account for 76% of the marks in an R05 exam. Click here to see the R05 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 R05 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 long term care. This is chapter 8 of the study text and it runs to 25 pages. For most people, they have limited understanding of LTC and if you have the time, it’s something you should know about. If you don’t have time, this is quite a lot of study when there will typically only be 3 questions on it in the exam.
  7. Practice, practice, practice. There really is no substitute for answering R05 practice questions such as the CII Knowledge Checker Questions on RevisionMate. You get these as part of your exam entry package on enrolment and enrolment plus. 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 R05 exam.
  8. Complete the R05 CII exam guide at least twice. Time pressure and lack of knowledge are likely to be the biggest issues for many people. Do your practice runs under exam condition so you get a feel about what it’ll be like in the exam. 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 just to ‘pad out’ a question. So read the question twice and ask yourself: ‘how do they expect me to use this information?’.
  10. Be kind to yourself when studying. Studying for 20-30 minute bursts is great – focus on 3-4 key topics and then have a break. Few people like studying so reward yourself with treats on a regular basis.

Further R05 resources

To find out more about our unique talking books that enable you to fit your learning in around family and work commitments, click here

To access our FREE practice questions for R05, click here

Prepare well and be successful first time. Until the next time.

Ian Patterson

Ex-examiner and author of the CII study texts for CF8, J07 and AF6

R06 exam february 2021

R06: February 2021

The case studies for the CII R06 February 2021 exam are now available. If you haven’t yet seen these, click here.

What do I do now?

The exam is on the 3rd February. The case studies are issued in advance of the exam for a reason – to let you to prepare for the exam. So if you have a limited knowledge of ethical investments and ESG, for example, then now is the time to work on this.

The exam will test across a range of different aspects of financial planning that are based on two client case studies. You will not know the actual questions you will face until the exam day but it makes sense to prepare for any eventuality before then.

What areas should I focus on in the CII’s R06 February 2021 exam?

Based on the case studies, you should be prepared to answer questions on the following topics in the CII’s R06 February 2021 exam:

Case Study 1: Andrew and Carrie

• Fact finding about their mortgage plans
• Identifying protection shortfalls and/or
• Life cover and income protection, e.g. recommend and justify a solution for their needs, comment of their current protection arrangements, arranging life to cover the mortgage and family needs
• ESG and ethical investments, e.g. examples of ethical investments, positive and negative screening, dark green and light green funds
• Aspects of the process that apply to all clients, e.g.: the benefits of receiving advice from a financial adviser, what the process would look like when offering them advice on their investments, advantages/disadvantages of different forms of adviser charging

Case Study 2: Dylan and Susan

• Fact find on retirement income and/ or inheritance planning (there is lots of information that we haven’t been given in the case study). e.g. when they plan to retire and how much of a gain is there on Susan’s OEIC?
• Pension death benefits: tax position and options
• Eligibility for state pensions/BR19/ state pension age
• Pension income options: the advantages and drawbacks of lifetime annuities, FAD or UFPLS
• Advantages of Dylan making higher pension contributions / using carry forward
• Potential salary sacrifice arrangement for Susan – how do they work and advantages/drawbacks to such an approach
• IHT calculation
• Describe Dylan’s tax position if he encashes the investment bond
• Inheritance tax planning: outright gifts, writing assets under trust; loan plans, discount gift schemes
• EIS or SEIS schemes: tax treatment
• Protecting their IHT liability using life policies and trusts

How does the CII’s R06 February 2021 exam compare with previous R06 exams?

There are some familiar themes. Case study 1 is a relatively young couple with a family whilst case study 2 is a ‘retirement’ or ‘pre-retirement’ scenario. Both of these are very familiar themes in R06.  Of the two, case study 2 is likely to be the most technically demanding. Having said this, remember that this is a level 4 ‘planning’ exam so it’s no just about the technical bits. And if a question is asked on a technical area, the technical knowledge needed to answer it shouldn’t be particularly ‘heavy’.

Prepare for questions such as the benefits of using a financial adviser (case study 1) and the ever present ‘review’ question (probably case study 2).

In a R06 exam, most of the questions will typically be based on the client’s stated financial objectives. Usually there are 6 to 8 of these spread across the two case studies. This time there are only 6 which is on the low side. This means there may be more than one question against each of the clients financial objectives and/or the examiners will test some generic areas. For example, the benefits of using an adviser, the stages of the advice process or pro’s and con’s of different methods of adviser charging. These apply to any client so there aren’t any clues in the case study that they are coming.

What do I need to do to pass the CII’s R06 February 2021 exam?

  1. Familiarise yourself with the clients’ circumstances. If you are provided with information, you will be expected to use it in some way. You should be able to apply your knowledge to their circumstances – generic answers will not usually score well.
  2. Revise and read around the technical aspects. Google is a good place to start, the CII R06 study text or use our useful R06 talking book.
  3. Be familiar with the technique and style of answers the CII will want. This is NOT just about applying your day job to an exam paper. Click here for a FREE copy of the last R06 exam to see what a past paper looks like. Pay particular attention to the style of questions and model answers provided.

How we can help

If you want to know the types of question that have been asked previously in R06, it’s not to late to download our R06 talking book. If you do, just listen the the financial objectives that link in with this specific exam to hear the types of question and answers based on previous R06 exams. Click here for full details.

And/or

Download our FREE 7 minute podcasts that look at R06 exam technique. Most people who fail R06 will do so by less than 5 marks – make sure you aren’t one of them.

Prepare well and be successful.

Ian Patterson

Ex-examiner and author of the CII’s study texts for CF8, J07 and AF6

ro4 exam

R04 exam: Pass first time

The CII’s R04 exam, Pensions and retirement planning, has a current pass rate of 61% which makes it the hardest R0 multiple-choice exam.

The exam has 50 questions, and you have an hour to complete it. 39 of these questions are single-response questions that only need one answer. 11 of the 50 are those pesky multiple-response question that require more than one answer. These are much harder to answer.

10 tips to pass first time

Here are our top ten 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 50 hours of study and most people will, unfortunately, need this. If you have limited experience of pensions, odds-on you’ll need much more than this. Why? Because R04 covers a really broad syllabus ranging from the background to pensions, relevant state benefits and the different methods of drawing a pension income. Unfortunately, it also includes HMRC tax rules and these aren’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). If you use the study text, 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. Practice, practice and practice some more. The best way to know what the R04 exam will look like is to complete the R04 CII exam guide at least twice. We suggest that you at least look at it at the start of your revision so you get a feel of the depth of knowledge you will require. You’ll then know which parts of the study text to ignore because they are too complicated. Unless you just enter for the exam, you’ll also get access to loads of practice questions on the CII RevisionMate. There is no excuse for not practising and it is the best way to learn, as well as assessing your knowledge.
  4. Focus on chapters 2, 6, 7 and 8 of the CII R04 study text.  The R04 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 four chapters not only account for over half of the tricky multiple response questions (which will require a greater level of understanding), but also over half the overall questions in the R04 exam.  In other words, you are unlikely to pass R04 without a decent grasp of the content in these chapters.
  5. Don’t panic about the HMRC tax regime! OK, let’s be clear about this. You cannot ignore this area as it will typically account for around 10 of the 50 questions in R04. That’s the bad news. On the positive side, some elements of the pensions tax regime are almost impenetrable which means that it is difficult for the examiners to test the more complex areas when they expect you to answer a question in around a minute.
  6. Calculations. The number of questions that involve a calculation will vary between exams but are typically less than 10. Being able to calculate a commutation factor or a straightforward tax liability on a pension income or a death benefit should be expected. An in-depth calculation of pension input periods less so. Keep this in mind when you are looking at some of the examples in the study text.
  7. Focus on the content you don’t know. If you are sitting R04, this is unlikely to be your first R0 exam so hopefully, 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 AND which get examined. 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.
  8. Guess! Questions in R04 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!
  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 or mislead you. So read the question twice and ask yourself: ‘how do they expect me to use this information?’.
  10. Study in short bursts. For many people, a prolonged period of caffeine and last minute cramming just doesn’t work. Regular short bursts of 15-20 minutes is far more effective. Click here for more detail.

R04 resources

Click here for our FREE R04 practice question

Click here to access our revision hub

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.

Our job is to help you pass R04 first time. Hopefully this article has helped.

Ian Patterson

Ex-examiner and author of the current CII CF8, J07 and AF6 study texts.

CII exam results

CII R0 exam results

Which are the easiest R0 exams?

The latest CII R0 exam results show 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 or 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 before the exam.

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?

Here are the results for 2020 (the latest available):

R01 – 69%

R02 – 65%

R03 – 65%

R04 – 61%

R05 – 79%

R06 – 78%

What conclusions can we draw from this?

First of all, all the 2020 results are better than those for the 2019 results in every subject. As these are very established exams, this suggests that people are better prepared. This is fantastic news and we’d like to think that our material has contributed to this!!

R01 – Financial Services, Regulation and Ethics.

In terms of CII R0 exam results, this is the fourth 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 also has 100 questions and 13 of these are those pesky multiple response questions. This makes the exam harder.

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 of R01.

R02 – Investment Principles and Risk.

This is the joint second hardest exam statistically although there will be many people who would say it is even 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.

Click here to view the 5 myths of R02.

R03 – Personal Taxation.

Statistically, this is the second 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 calculation questions.

Click here to view the 5 myths of R03.

R04 – Pensions and Retirement Planning.

In terms of CII R0 exam results, this is now the 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.

Click here to view the 5 myths of R04.

R05 – Financial Protection.

From the hardest exam, to the easiest. 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. That said, you’ll still need to have some knowldege of subjects like state benefits, and long term care so it isn’t all plane sailing.

Click here to view 10 free R05 practice questions

R06 – Financial Planning Practice.

The statistics say that this is the second 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 very few people who walked out of this exam thinking they’d failed yet 22% still do.  Be prepared to not only put some hard yards in within two weeks before the exam, but also before then.

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

If you want to access or study and revision hub (which has lots of R0 exam-specific articles, click here)

Prepare well and pass first time.

Ian Patterson

Ex-examiner and author of the current CII CF8 J07 and AF6 study texts

cii r01

R01 exam: how to pass

The CII’s R01 exam, Financial Services, Regulation and Ethics, has a current pass rate of 69%.

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.

10 tips to help you pass R01 first time

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 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, 7 and 8 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 four 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 on the FCA and it’s rules.
  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?’.
  7. Practice, practice, practice. There really is no substitute for answering R01 practice questions such as the CII Knowledge Checker Questions on RevisionMate. You get these as part of your exam entry package on enrolment and enrolment plus. 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 R01 exam.
  8. Complete the R01 CII exam guide at least twice. Time pressure and lack of knowledge are likely to be the biggest issues for many people. Do your practice runs under exam condition so you get a feel about what it’ll be like in the exam. The CII exam guide is the best guide there is as to what your actual exam will look like. Click the link below.
  9. Have a plan on how to approach sitting the exam. For example, the multiple response questions are the last 13 questions in the exam. You might decide to answer these first while your brain is still clear. Remember to flag questions that you aren’t 100% sure of and build in time to return to revisit these at the end of the exam.
  10. Be kind to yourself when studying. Studying for 20-30 minute bursts is great – focus on 3-4 key topics and then have a break. Few people like studying so reward yourself with treats on a regular basis.

R01 resources

Click here for our FREE R01 practice question

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

Click here for the CII FREE exam guide

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

Ian Patterson

Ex-examiner and author of the current CII study texts: CF8, J07, and AF6

R03 exam

R03 exam: how to pass

The CII’s R03 exam, Personal Taxation, has the second lowest pass rate for the core R0 exams. Figures show that R03 has a pass rate of 65%. 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. 39 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.

10 tips to help you pass R03 first time

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.

Ian Patterson

Ex-examiner and author of the CII study texts for CF8, J07 and AF6

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 79% 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. 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 2021/22 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

Ian Patterson

Author of the current CF8, J07, and AF6 CII study texts and ex-examiner

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 is the hardest main R0 exam with a pass rate of just 61%.

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. 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 2021/22 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, is Susan eligible to 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 earnings of £40,000 after taking into account all allowances.   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 must he 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

Ian Patterson

Author of the current CF8, J07, and AF6 CII study texts and ex-examiner

r02

R02 exam: FREE practice questions

Are you revising for the CII’s R02 exam? Know someone who is? 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. 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 2021/22 tax year. See how well you do on these R02 exam style questions. You’ll find the answers at the end.

Here goes……..

10 R02 questions

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. increasing the level of gilt issues.

D. reducing Corporation Tax rates.

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 income after reliefs and allowances 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

Ian Patterson

Author of the current CF8, J07, and AF6 CII study texts and ex-examiner