CII R06 — Financial Planning Practice Companion Cheat Sheet

This Cheat Sheet supports independent preparation for CII R06 — Financial Planning Practice Companion using the official exam code CII R06. It is designed for rapid case-study preparation: extract facts, identify planning issues, justify recommendations, and avoid common applied-answer traps.

Use the tables for a quick pre-exam check. Expand a topic’s notes for explanations, examples, and additional distinctions.

Scope and study context

CII R06 is an application-focused financial planning exam. Success depends less on recalling isolated facts and more on applying planning knowledge to the client scenario: objectives, constraints, existing arrangements, tax position, family circumstances, risk profile, vulnerabilities, and timescales.

This page is independent review support and is not affiliated with CII. Use it alongside the current CII materials for your sitting and independent companion practice such as original practice questions, a question bank, topic drills, and marked-style explanations.

R06 task focus

CII R06 is primarily an application and suitability exam. Strong answers usually:

Case-study triage workflow

Use this sequence when working through the case-study information supplied for your sitting.

Command words: answer style

Notes and examples

Command Words and Answer Style

Command style	What to provide	Trap to avoid
Identify / list	Short, separate points	Long paragraphs that hide marks
Explain	Point plus reason	Listing facts without “so what?”
Recommend	Clear action plus suitability reason	Vague “consider” statements only
Justify	Why this option is better for the client	Generic product advantages
Calculate	Show method, assumptions, and units	Final number with no working
Comment on	Balanced implications, advantages, disadvantages	One-sided answer
Review / analyse	Current position, gaps, risks, improvements	Rewriting the case study

When time is tight, use concise bullets. Each bullet should contain one assessable idea.

High-yield answer formula

For most advice questions, build each recommendation as:

1. Action: what should be done.
2. Client link: why it fits the stated objective or need.
3. Tax/technical point: relief, exemption, charge, wrapper, or regulatory issue.
4. Risk/drawback: cost, access, underwriting, investment risk, loss of guarantees.
5. Review trigger: retirement, birth, death, divorce, house move, tax change, market movement, health change.

Example structure:

Recommend increasing pension contributions, subject to affordability and annual allowance checks, because the client is a higher earner seeking retirement provision. Contributions may receive tax relief and may reduce taxable income, but pension funds are inaccessible until permitted pension age and investment value can fall. Review annually and after any income change.

Fact-find gap checklist

Planning priority ladder

Use this as a default order, then adjust for the case facts.

Core calculations

Use the rates, allowances, and tax tables applicable to your sitting. Show workings even when the final number is simple.

Net worth and surplus

\[ \text{Net worth} = \text{total assets} - \text{total liabilities} \]\[ \text{Monthly surplus} = \text{net monthly income} - \text{monthly expenditure} \]\[ \text{Emergency fund target} = \text{essential monthly expenditure} \times \text{chosen number of months} \]

Protection shortfall

[ \text{Life cover need} = \text{debts to clear}

• \text{capitalised dependant income need}
• \text{known future costs}

• \text{existing suitable cover/assets} ]

\[ \text{Capitalised income need} = \frac{\text{annual income required}}{\text{chosen withdrawal, annuity, or discount rate}} \]

[ \text{Income protection shortfall} = \text{required net monthly income}

• \text{continuing income}
• \text{existing insurance benefit} ]

Mortgage and property

\[ \text{Loan-to-value} = \frac{\text{mortgage balance}}{\text{property value}} \times 100 \]

Pension contributions

\[ \text{Gross pension contribution} = \frac{\text{net personal contribution}}{1 - \text{basic-rate relief}} \]\[ \text{Additional tax relief} = \text{gross contribution} \times (\text{marginal tax rate} - \text{basic rate}) \]

Check relevant UK earnings, annual allowance, carry forward, tapered annual allowance, and money purchase annual allowance where applicable.

Investment return and inflation

\[ \text{Real return} \approx \text{nominal return} - \text{inflation rate} \]\[ \text{Future value} = \text{present value} \times (1 + \text{growth rate})^{\text{years}} \]

Estate and IHT exposure

[ \text{Taxable estate} = \text{estate value}

• \text{debts}
• \text{reliefs}
• \text{exemptions}
• \text{available nil-rate bands} ]

\[ \text{IHT liability} = \text{taxable estate} \times \text{applicable IHT rate} \]

Notes and examples

Calculation Review

Calculation type	Method to remember	Exam-use tip
Net worth	Assets minus liabilities	Separate liquid and illiquid assets
Protection shortfall	Required capital or income need minus existing cover	Include term and beneficiary need
Emergency fund	Monthly essential expenditure multiplied by target months	Adjust for job security and dependants
Pension contribution affordability	Surplus income minus other priority commitments	Check tax relief and allowance limits
Investment gain	Disposal value minus allowable cost	Consider fees, losses, and exemptions
IHT exposure	Estate value minus available reliefs/exemptions	Planning points matter as much as number
Loan repayment priority	Compare interest cost, tax impact, and liquidity need	Do not always default to investing
Drawdown sustainability	Required income versus fund size, risk, and timeframe	Mention review and sequencing risk

Calculation traps:

• Mixing monthly and annual figures.
• Using gross income when net income is needed.
• Ignoring existing policies or pensions.
• Forgetting inflation where relevant.
• Rounding too early.
• Giving a number without explaining its relevance.
• Not stating assumptions when data is incomplete.

Protection planning matrix

Pension and retirement reference

Investment and wrapper selection

Attitude to risk, capacity for loss, and time horizon

Tax planning quick matrix

Avoid fixed allowance figures unless they are supplied for your sitting. Apply the current rules and show the client-specific effect.

Estate planning and intergenerational planning

Suitability report content checklist

For R06 written answers, think like a suitability report even when not asked to draft one.

Common scenario signals and likely advice areas

Recommendation drawbacks: points candidates often miss

Exam technique checklist

Before the exam:

• Prepare a one-page profile for each client in the case study.
• List objectives in priority order.
• Identify fact-find gaps by planning area.
• Pre-build likely recommendation blocks, but do not force them into the exam if the question asks something else.
• Practise calculations using the tax tables and assumptions for your sitting.
• Prepare balanced advantages and disadvantages for each likely recommendation.

During the exam:

• Answer the question asked, not the one you expected.
• Use client names and facts to make points specific.
• Make one clear point at a time.
• If a question asks for benefits, do not include drawbacks unless relevant to explanation.
• If a question asks for drawbacks, do not write generic benefits.
• For calculations, show enough workings to gain method credit.
• For “additional information” questions, ask for missing facts; do not give advice.
• For “recommend and justify” questions, include a clear recommendation, not only a list of options.

Final readiness prompt

Take one timed CII R06 case study and produce, without notes: a client fact summary, priority objectives, fact-find gaps, protection shortfalls, pension issues, investment/tax recommendations, estate planning actions, and three drawbacks for each recommendation. Then compare your answer against the question wording and refine for specificity.

What to Prioritise in Final Review

Core Answering Method

For CII R06, a useful answer structure is:

1. Fact — identify the relevant case-study fact.
2. Issue — explain why that fact matters.
3. Advice action — state the recommendation or planning step.
4. Reason — connect the action to the client’s objective.
5. Caveat or review — mention risk, cost, tax, suitability, or future review.

Because the client has dependent children and a large outstanding mortgage, review the existing life cover and calculate the shortfall. Recommend term assurance written in trust for the required term so that the family has funds to repay debt and maintain income if the client dies.

That answer is stronger than:

Recommend life insurance.

Fast Case-Study Reading Checklist

Before practising questions, extract the case-study facts into a working grid.

Decision Path for Recommendations

    flowchart TD
	    A[Client objective identified] --> B{Enough facts?}
	    B -- No --> C[State additional information needed]
	    B -- Yes --> D[Assess affordability, risk, tax, and timescale]
	    D --> E{Existing arrangement suitable?}
	    E -- Yes --> F[Retain, review, or adjust]
	    E -- No --> G[Recommend change or alternative]
	    F --> H[Explain client-specific reason]
	    G --> H
	    H --> I[State drawbacks, tax issues, costs, and review needs]

High-Yield Technical Areas

Protection Planning

Protection questions often reward practical gap analysis.

Notes and examples

Strong protection answers usually include:

• The risk event being covered.
• The financial consequence of that event.
• The amount and term of cover needed.
• Whether existing cover is adequate.
• Whether the policy should be written in trust.
• Affordability and underwriting considerations.

Pension and Retirement Planning

Pension planning in CII R06 is often about suitability, tax efficiency, retirement objectives, and sequencing.

Area	Review focus
Contributions	Affordability, employer matching, tax relief, allowance limits, carry-forward where applicable
DC pensions	Fund choice, charges, risk level, contributions, beneficiary nominations, access flexibility
DB pensions	Guaranteed income, spouse benefits, inflation linking, transfer risk, scheme security considerations
Retirement income	Essential vs discretionary spending, state pension, secure income, drawdown, annuity options
Decumulation risk	Sequencing risk, longevity risk, inflation, market falls, cash buffer
Tax planning	Timing withdrawals, taxable income bands, pension commencement lump sum rules, wrapper order
Death benefits	Nominations, dependant needs, tax treatment based on circumstances and current rules
Review	Contributions, asset allocation, retirement date, health, expenditure changes

Common pension traps:

• Recommending increased contributions without checking affordability.
• Ignoring employer contributions or salary sacrifice where relevant.
• Assuming pension access solves all liquidity needs.
• Treating drawdown as risk-free.
• Forgetting nomination forms.
• Ignoring the client’s spouse or partner’s pension position.
• Using outdated allowance or tax figures instead of the rules for the relevant sitting.

Investment Planning

Investment answers should connect risk, time horizon, tax wrapper, diversification, and client need.

Concept	High-yield review point
Attitude to risk	Willingness to accept volatility
Capacity for loss	Ability to absorb losses without harming objectives
Need for risk	Level of return required to meet the goal
Time horizon	Longer periods may support more growth assets, but client circumstances still matter
Diversification	Spread by asset class, geography, sector, manager, and tax wrapper
Liquidity	Match accessible funds to short-term spending needs
Tax wrapper	Use pensions, ISAs, bonds, general investment accounts, or other vehicles where suitable
Costs	Charges reduce net return and should be justified
Rebalancing	Keeps portfolio aligned with risk profile
Ethical preferences	Should be identified and reflected where relevant

A strong investment recommendation usually states:

• Objective and timescale.
• Risk profile and capacity for loss.
• Suggested broad asset allocation.
• Wrapper or account type.
• Tax advantages.
• Liquidity implications.
• Charges and review process.
• Why alternatives may be less suitable.

Tax Planning

Do not turn tax answers into generic lists. Tie tax planning to the client’s income, assets, family structure, and timing.

Tax area	Likely planning angles	Candidate mistakes
Income tax	Pension contributions, salary sacrifice, savings income, dividend income, spouse/civil partner planning	Forgetting marginal rate impact
Capital gains tax	Use allowances, bed and spouse/civil partner, timing disposals, losses, wrapper transfers where permitted	Ignoring unrealised gains
Inheritance tax	Wills, gifts, exemptions, trusts, life cover in trust, pension nominations, liquidity	Only calculating liability, not planning
Dividend tax	Wrapper use, ownership split, allowance use	Treating dividends as tax-free
Savings tax	Cash interest, personal savings allowance, ISA use	Holding excess cash inefficiently
Property tax	Rental income, gains, ownership, mortgage interest treatment if relevant	Missing joint ownership issues
Pension tax	Contribution relief, annual limits, withdrawal taxation	Confusing gross and net contributions

Always use the current tax tables and CII materials applicable to the sitting.

Estate Planning and Later-Life Issues

Estate planning should be practical, not just tax-driven.

Planning point	Why it matters
Up-to-date will	Directs assets and can reduce conflict
Lasting power of attorney	Enables trusted people to act if capacity is lost
Expression of wishes	Helps pension trustees understand intended beneficiaries
Life cover in trust	Can provide liquidity outside the estate where appropriate
Gifting strategy	Reduces estate over time but must preserve donor security
Trust planning	Controls access, protects beneficiaries, may have tax consequences
IHT liquidity	Beneficiaries may need cash to meet tax or expenses
Long-term care	Care costs can change retirement and inheritance planning
Blended families	Beneficiary conflict and ownership issues need careful planning

Common traps:

• Recommending large gifts without checking the client’s own future needs.
• Forgetting control issues when assets are gifted outright.
• Ignoring pension death benefit nominations.
• Assuming the family home can always be left tax-efficiently.
• Missing second marriages, financially dependent children, or vulnerable beneficiaries.

Cashflow and Affordability

Cashflow is a decision tool, not just arithmetic.

Review question	Why it matters
Is there a monthly surplus?	Supports contributions, premiums, or debt repayment
Are expenses fixed or discretionary?	Determines flexibility
Is income secure?	Affects emergency fund and protection need
Are short-term goals funded?	Avoids investing money needed soon
Are debts expensive?	Repayment may be better than investing
Is inflation considered?	Long-term spending needs may rise
What assumptions are used?	Prevents false precision

Useful formula:

\[ \text{Monthly surplus} = \text{Net monthly income} - \text{Monthly expenditure} \]

For protection and retirement calculations, state assumptions clearly. If the case study does not give enough data, say what additional information is required.

Suitability: What Examiners Often Want to See

A recommendation is more persuasive when it answers these questions:

Common Candidate Mistakes

Content Mistakes

• Writing generic product advantages instead of client-specific planning points.
• Ignoring the client’s spouse, partner, dependants, or business interests.
• Recommending a product without first identifying the need.
• Missing existing arrangements already shown in the case study.
• Overlooking affordability.
• Treating tax planning as optional.
• Giving investment advice without mentioning risk and capacity for loss.
• Ignoring vulnerable client indicators.
• Forgetting estate planning basics: wills, LPAs, nominations, trusts.
• Repeating the same point in different words.

Exam-Technique Mistakes

• Spending too long on one question.
• Writing long paragraphs when bullets would be clearer.
• Not using the client’s names or facts.
• Answering a different question from the one asked.
• Failing to show calculation working.
• Listing advantages when the question asks for disadvantages.
• Recommending before explaining.
• Providing too few distinct points.
• Leaving easy marks in review, administration, and disclosure points.

Cheat Sheet Tables by Planning Area

Protection Recommendations

Notes and examples

Investment Recommendations

Scenario signal	Likely issue	Planning response
Large cash holding	Inflation and opportunity cost	Keep emergency fund, invest surplus by timeframe
Concentrated shares	Specific risk	Diversify gradually and manage tax
Short-term house purchase	Capital security	Avoid high-risk investments
Long retirement horizon	Growth need	Diversified portfolio aligned to risk
Low capacity for loss	Objective at risk if markets fall	Reduce volatility, hold cash buffer
Unused tax wrappers	Tax inefficiency	Use suitable allowances and wrappers
Ethical preference	Client values	Consider ESG or ethical funds after suitability review

Retirement Recommendations

Scenario signal	Likely issue	Planning response
Retirement income shortfall	Insufficient saving	Increase contributions, adjust retirement age, review spending
High income	Tax-efficient saving opportunity	Pension contributions within applicable limits
Near retirement	Sequencing and liquidity	De-risk gradually, cashflow model, review income options
DC pension only	Longevity and market risk	Consider drawdown/annuity blend where suitable
DB entitlement	Secure income	Include in income planning and avoid unnecessary transfer assumptions
No nominations	Death benefit uncertainty	Update expression of wishes
Spouse with low pension	Household imbalance	Consider spouse contributions and retirement income split

Estate Planning Recommendations

Scenario signal	Likely issue	Planning response
No will	Intestacy risk	Make or update will
Young children	Guardianship and trust need	Appoint guardians and consider trust provisions
High estate value	IHT exposure	Gifting, trusts, pensions, insurance, reliefs as appropriate
Illiquid estate	Tax payment difficulty	Life cover in trust or liquidity planning
Second marriage	Beneficiary conflict	Careful will drafting and ownership review
Vulnerable beneficiary	Control and protection	Trust or structured gifting
Elderly client	Capacity risk	Lasting power of attorney

Review and Ongoing Service Points

Do not ignore review points. They are often easy to justify.

Final-Day Quick Checklist

Before attempting a mock exam or final question-bank set, check that you can confidently answer:

• What are the client’s top three objectives?
• What risks could stop those objectives being met?
• What facts are missing and would need to be obtained?
• Which existing arrangements are useful, unsuitable, duplicated, or insufficient?
• What is the protection shortfall?
• Is the emergency fund adequate?
• Are pension contributions affordable and tax-efficient?
• Is retirement income realistic?
• Is the investment portfolio suitable for risk, capacity, and timescale?
• Are tax wrappers and allowances being used effectively?
• Is the estate plan current and practical?
• Are wills, LPAs, trusts, and nominations addressed?
• Have costs, disadvantages, and review needs been included?

Put the review into practice