R06: February 2021

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

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