The R06 Exam – Learn the questions!

R06 July 2023

The R06 Exam – Learn the questions!

The next R06 exam is quickly approaching and it’s vital that you make the best use of your time ahead of the exam. Afterall, the exam is a test of knowledge so you need to ensure you have as much as that as possible!

However, if you do not answer the question the examiners have set, the exam will likely not go so well! Now this seems obvious but in our 29-years experience in training candidates through exams, not properly understanding the question asked if one of the major reasons why candidates fail the R06 exam. So we wanted to bring you a blog to share with you the types of question that will be asked in the R06 exam, and how to answer them!

Types of questions

So I’m sure that you will be familiar with the expression ‘past performance is not a guide to future performance’ and this applies to exams as much as it does with investment advice. There are likely to be questions in some areas of the case studies that will surprise you and it’s also likely there will be questions which are less of a surprise. Looking back at past exams will show you that there are questions that feature in just about every RO6 exam. Below are the six question types that you need to understand and master:

Risk-based questions

This type of question is primarily used in AF5 but it may also be used in RO6 (although it’s not been regularly used in this exam). An example of a risk-based question is as follows:

‘Sanjay would like to know more about the risks associated with investments. Excluding market risk, identify the relevant investment risks and describe how they apply to the following:

(a) Cash held within the bank (8 marks)

(b) The proposed purchase of a holiday home in Spain (10 marks)’

From an exam technique point of view, it is important with R06 to spot the verbs used in the question. So take the above example, the verbs are identify and describe, which means when answering the 10 mark question relating to the holiday home, you would have received 5 marks for identifying the five types of risk outlined above and a further five marks for describing how these apply to Sanjay. Ideally, you would also include at least one extra risk factor with a suitable description to maximise your chances of getting full marks. History has shown that the number of marks for this type of question does vary but you could expect around 10 marks of this style in a typical exam.

Fact-find questions

As the name suggests, this style of question requires you to identify the additional information that you would require, prior to advising a client, beyond that provided in the R06 case studies. Like the risk-based question, this is a favourite type of question with examiners and therefore you should ensure you are comfortable answering these.

Depending on the exam, the focus of this question will be either the client’s objectives (e.g. Immediate financial objectives) or an element of the client’s financial planning needs (e.g. retirement planning). Remember, that asking for information that has already been provided in the fact-find shall not score well, as it shows the candidate is lacking the ability to correctly apply answers to the information provided.

An example of a fact-find question is as follows:

‘Identify the additional information you would need to discuss with Mike in order to advise on how to meet his:

(a) Immediate financial objectives (14 marks)

(b) Longer-term financial objectives (14 marks)’

Comment on questions

This is the fourth style of question that we will look at and this perhaps needs a little more explanation than the previous three question types. It is important to understand what the examiners are looking for with this style of question. In effect, it means ‘describe the position’. It doesn’t ask you to elicit additional information and it doesn’t ask you to make recommendations. Instead, it’s a question asking you to basically outline the information that is available to you. Hopefully the below example will help to demonstrate this:

‘Fiona is particularly concerned about the impact long-term illness or death will have on the family’s situation.

(a) Comment on the current situation and identify any weaknesses in Fiona’s protection arrangements if she suffered a long-term illness or disability. (8 marks)

(b) Comment on the current situation and identify any weaknesses in Fiona’s financial arrangements if she died tomorrow. (8 marks)’

Review questions

This style of question traditionally requires you to either:

  • Identify the key events that would trigger a review of a client’s circumstances.
  • Identify the actions you would need to take when reviewing a specific area of advice provided to clients e.g. review protection needs, ongoing suitability of investments, income in retirement.

Below is an example of a review question:

‘When conducting an annual review, list eight areas that you would specifically address with John. (8 marks)’

Explain, outline or describe questions

These may be used as a verb in one of the other questions, e.g. ‘explain the risks of…’. In this case, being aware that you are being asked to identify the risks of something is the important bit. On other occasions, it is the ‘explain’, ‘outline’ or ‘describe’ that is important. This type of question requires you to demonstrate the depth of your knowledge.

With this type of question, the examiners are asking you to provide detail. If you are not precise or you do not link the information to the scenario given, you will not score well. For example, if you are asked about taking income from an investment bond, you would probably get marks for saying something like:

  • 5% withdrawal may be taken (1 mark)
  • based on the amount invested (1 mark)
  • tax deferred (1 mark)
  • for a period of up to 20 years (1 mark)

Here is an example of a risk-based question:

‘Explain to Doris the ‘small pots’ rules that allow her to take her preserved personal pension policies immediately and the tax implications of this course of action. (8 marks)’

Recommendation questions

Given the RO6 exam concentrates on financial planning, it really shouldn’t come as a huge surprise that recommendation questions feature in nearly every R06 exam. Below is an example of a recommendation question:

‘Detail and justify the recommendations you would make in respect of each of the following financial objectives. No calculations are required. Candidates will be rewarded for supporting their recommendations with relevant evidence and demonstrating how the recommendations work holistically to meet the client’s objectives.

(a) To provide financial security for herself and her children in the event of illness.(10 marks)

(b) To provide financial security for her children in the event of her death. (8 marks)’

From an exam technique point of view, again notice the verbs that are used in the question. Take the example question for instance- detail and justify. Part (a) of the question will probably look for five recommendations that meet the client’s needs, with a further five marks justifying these.                                          

I hope you have found a breakdown of the different types of questions examiners may use helpful! There’s still time to listen to our audio material to hear how these objectives – including ESG – have been tested in previous R06 exams. We also have TWO FREE podcasts that are available for the R06 exam.                                       

Best of luck with the exam!

Sam Patterson

Marie Patterson
Sam Patterson