As part of our Ask the Experts series, we put your exam and study questions to the Brand Financial Training team. We’ll be publishing their answers every day this week. Check the website daily or read via the link on our daily email.
We start with three questions around the R06 exams.
Paraplanner Question 1: Can you explain what the examiners are looking for in the answers to the different types of R06 questions:
‘State the additional information….’
‘State the factors…’
Answer from Brand Financial Training
Time spent working on exam technique for answering the different types of R06 questions is certainly time well spent, so this is a great question to kick start our week of exam Q&A.
‘Stating the additional information required’ is a fact-finding question and is usually worth 10 to 12 marks. If you’ve put the practise in, they should be pretty straightforward marks. Sometimes, if you’re lucky, you might get two fact-finding questions, perhaps one based on a specific objective and one based on a particular product.
We would advise you take a look at these questions and their model answers in the CII’s R06 exam guides – the more you can practise, the easier you’ll find answering this type of question on exam day. After the case studies have been released, think of and practise answering fact-finding questions that could be asked on each of the clients objectives.
If you are struggling to find enough points for the marks on offer try to take a step back. Imagine it was your client – what else would you ask them? what else would you need to know?
‘State the factors’ questions can also offer up some straightforward marks (just make sure you read and re-read the question and answer the question being asked!). You may well find that some of the answers can be lifted directly from the case study. One approach to answering such questions is to work your way through the case study and add anything to your answer you think is relevant.
Let’s look at the example question of ‘State the factors that affect a client’s attitude to risk (ATR)‘. Some generic factors that would apply to most clients include:
• Age (so timescales for investments for example
• Objectives (if they want to gift a large amount of their money for example that would impact ATR
• Income/expenditure
• Assets/liabilities/expected inheritance
• Investment experience and knowledge
Some ‘factors’ questions are more product-specific, so for these, you will need to demonstrate your technical knowledge of the topic and apply it to the client. For example, if you are asked to ‘State the factors a client should be aware of before entering into flexi-access drawdown’ here you are looking at the pros and cons of drawdown. These might include:
• Higher risk than annuity/funds could match ATR/investment risk
• Fund remains in a tax wrapper
• Income flexible/can use TFC/ tax-efficient income
• Complex/reviews/charges/advice costs etc. etc.
As you’ll see from the above, answers to the ‘factors’ questions are, as with the fact-finding, sometime more obvious than you initially might think.
Paraplanner Question 2 :With the Recommend and Justify questions in R06, do I just recommend one product or could I recommend two for more marks?
Answer from Brand Financial Training
The ‘Recommend and Justify’ question usually tests your technical knowledge on a particular subject and/or your ability to apply a financial planning solution for the client.
Make sure you read the question carefully, so you know exactly what it’s asking. If the question is asking you to recommend a product for a specific purpose, then choose one suitable product and run with that. If it’s asking for a strategy to cover protection needs, you may need to build two or three products into your answer.
Remember, if you are recommending just one product, you are still likely to be making more than one recommendation within the same answer as you’ll need to suggest suitable features of that product and justify them. For example, the term of the protection product so your answer may be ‘term of 18 years as the benefit is needed until planned retirement age’.
Two key points here, make sure you are answering the questions being asked and write as many points as you can (as long as they don’t contradict each other you won’t lose marks).
Paraplanner Question 3: Can all the R06 questions be answered with bullet points?
Answer from Brand Financial Training
Yes, all the answers can be bullet pointed. If you get an ‘Explain’ question sometimes a short sentence may be needed for clarity, but in the main use bullet points as it will save you a lot of time. Just make sure the examiner can understand your point. Too short bullet points may be insufficient. For example, instead of just stating ‘attitude to risk’, you should try and justify your answers and relate them to the case studies where possible, so, for example, ‘Too much held in cash to meet ATR’.
Do take a look at the structure of the model answers in the CII R06 exam guides and resource providers’ analyses to get a clear picture of what is required.
Need help with your CII exams? For resources including mock exam papers and e-mocks, calculation workbooks, revision notes, audio masterclasses and video tutorials do visit Brand Financial Training at https://brandft.co.uk, including free taster versions!
