The January sitting of the R06 exam is just around the corner, with case studies released today (Friday 5th January 2024)! Before we turn our attention to the new case studies, we always recommend candidates look back at the previous sitting.
An exercise BTS finds valuable is to analyse how well our case study analysis performed against the questions that actually came up in the sitting. In this article, we take a detailed look back at the October 2023 sitting and reflect on what we had predicted would be examined vs what was actually on the paper.
For the R06 sitting, the CII release two case studies approximately 2 weeks prior to the exam sitting.
This case study introduced us to David and Ruby.
David and Ruby were both aged 70, married and had retired five years prior.
Their financial aims were:
|How did we do?
|State the additional information that a financial adviser would require in order to advise David and Ruby on the suitability of their financial arrangements to meet their long-term retirement income needs
|This exact question was included in our analysis and the model answer would have enabled you to score high marks in this question.
|Explain in detail, to David and Ruby how any sale of Ruby’s buy-to-let property would be treated for Capital Gains Tax purposes. No calculations are required.
|We included two questions around the CGT implications of the sale of Ruby’s property within our analysis. These questions would have enabled you to score high marks in this question.
|Outline the key reasons why Ruby might wish to purchase a lifetime annuity with the proceeds of her personal pension plan.
|We included two questions around annuity purchase within our analysis. These questions would have enabled you to score high marks in this question.
|Identify the key reasons why the holding in the UK commercial property unit trust may not be suitable for David and Ruby
|Whilst we did not consider this specific question, we did include three questions around their current fund choices, which could have been used to score high marks in this question.
|Recommend and justify a range of actions that David and Ruby could take to improve the tax-efficiency of their current financial arrangements.
|In our analysis, we included a model answer for Recommend and justify the actions that David and Ruby can take to improve the suitability of their current financial arrangements. We based this on 20 marks, and therefore there was enough content on tax-efficiency for maximum marks.
|Explain in detail, to David and Ruby, how appropriate powers of attorney could be set up and how they would operate to assist them with managing their affairs in future.
|In our analysis, we included three questions covering LPAs, explaining why David and Ruby should put LPAs in place, outlining the key factors that should be taken into account and any restrictions. These model answers were sufficient to score high marks within this question.
This case study introduced us to Ravi and Chloe.
Ravi and Chloe are both aged 32 and married with two children.
Their financial aims were:
|How did we do?
|Identify the key client-specific factors which may prevent Ravi and Chloe from meeting their financial objectives
|Whilst we did not provide this specific question in our analysis, we did include a model answer for commenting on their current protection arrangements in relation to their financial aim of ensuring appropriate protection is in place. This would have enabled candidates to pick up good marks for this question.
|Explain to Ravi and Chloe how the Marriage Allowance could be used to improve their current tax position.
|We provided a model answer for this exact question which should have enabled candidates to score high marks in this question.
|Explain to Ravi and Chloe why it is important for them to continue to make regular savings into their Stocks and Shares ISA’s
|Whilst we did not predict this specific question in our analysis, our question on pound cost averaging could have been used as a starting point for this question. In addition, we did provide information on ISA’s throughout the analysis, which should have provided you with the knowledge required to score a good number of marks.
|Explain to Ravi and Chloe the actions that they could take when their fixed-rate mortgage deal expires in December, to ensure that their mortgage payments continue to be affordable.
|We provided a model answer in our analysis on the options available to Ravi and Chloe in relation to the actions available to them when their fixed-rate mortgage detail expires, this would have enabled candidates to score high marks in this question.
|Identify the key areas of weakness in Ravi and Chloe’s current financial protection arrangements
|We provided a model answer in our analysis on their current protection needs and the importance of reviewing this based on their circumstances. This answer would have enabled high marks to be scored in this question
|Recommend and justify a suitable protection policy to provide a regular income in the event of Ravi suffering a long-term illness and explain how this could be set up in an affordable manner.
|We provided this exact model answer in our analysis which would have enabled candidates to score high marks in this question.
|Identify eight key issues that a financial adviser should discuss with Ravi and Chloe at their next annual review.
|We provided this exact model answer in our analysis which would have enabled candidates to score maximum marks in this question.
The October 2023 sitting was a relatively standard R06 paper, covering areas such as Capital gains tax, annuity purchase, and mortgages. The examining body feedback was that general performance across this paper was good.
However, the CII highlighted that some candidates struggled with questions which required them to examine a client’s circumstance and identify areas of weaknesses. The CII state that candidates tend to score low marks on these types of application-based questions because candidates focus on generic responses, as opposed to focusing on information specific to the case studies.
So, if you are sitting this unit in January, remember to personalise, personalise and personalise! Generic answers will not score highly in this exam, so always link back to the case study.
Every sitting of the R06 will be different, but there are trends (and examiner favourites!) so knowing what has come up before is a good indicator of the sorts of things that might come up again. We can never predict a paper 100% accurately but having supported every sitting of the R06 since its inception, we usually get pretty darn close!
Looking at the October 2023 paper, we are confident that anyone using our analysis, would have been able to achieve a pass in this unit if they applied the learning to the questions asked on the day.
If you’re looking for specialist R06 support, check out our R06 Toolkit or get in touch to chat through your study plan.
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Chat with other R06 candidates in the dedicated BTS R06 online forum room to help keep up to date , find out any new information and gain help and advise from others.
Read another insightful article ‘R06 – How to Prepare & Pass’ to find out more information about the R06 exams.