BrandFT Set 3 Flashcards
Model Answers
State the five elements to SYSC that have the most impact on competence and conduct and provide a brief explanation of each.
(10)
SYSC 3 Systems and Control
Authorised firms must establish and maintain systems and controls appropriate to their business.
SYSC 5 The competent employee rule
All employees should have the required skills, knowledge and expertise to carry out their responsibilities.
SYSC 6 Compliance, internal audit and financial crime
Requirement to establish implement and maintain adequate policies and procedures to ensure compliance with FCA rules.
SYSC7 Risk Control
Authorised firms must have effective processes to identify, manage monitor and report any risks within their business/including risks from internal processes/external factors/people risks.
SYSC9 Record Keeping
Firms must develop and keep orderly records in line with FCA requirements.
Fiona, a supervisor, has been asked to involve her team in a ‘pilot’ of a new administration process. She anticipates that she will face some resistance from the team over the additional time involved in the new process.
State the eight steps she could take using John Kotter’s change management strategy to assist her in the process.
(8)
- Establish sense of urgency
- Form a powerful guiding coalition
- Create a vision
- Communicate the vision
- Empower others to act on the vision
- Plan for and create short term wins
- Consolidate improvements and produce more change
- Institutionalise change
Explain the roles and characteristics of each line of the ‘three lines model’ of risk management.
(10)
First Line
* Provision of products and services/managing risk
* Operational units and subsidiaries have responsibility for the risks of their department/most able to respond to problems.
* Should have clear procedures and processes.
* Specialist risk staff embedded within business units.
* Should have clear targets and strategies.
Second Line
* Provides functions that monitor the first line.
* Provide expertise, support, monitoring.
* Challenge on risk-related matters.
Third Line
* Responsible for auditing the first and second lines.
* Provide independent assurance to the governing body.
Fiona, a supervisor, has been asked to involve her team in a ‘pilot’ of a new administration process. She anticipates that she will face some resistance from the team over the additional time involved in the new process.
Explain how the various stages of the process connect with one
another.
(2)
- Each step is inter-related
- Change progresses through each stage building on the previous stage
You have just put together a team with representatives from the various functions in your firm. The purpose of the team is to come up with ideas to generate referrals from existing clients and then to implement these ideas to create more business.
List the five stages of team development identified by Bruce Tuckman.
(5)
Forming
Storming
Norming
Performing
Adjourning
You have just put together a team with representatives from the various functions in your firmThe purpose of the team is to come up with ideas to generate referrals from existing clients and then to implement these ideas to create more business.
Identify two examples of events that can cause a team to return to a previous phase in their development. (2)
- A review of a project being undertaken
- A change in the team member
List the five styles identified for conflict management within the Thomas-Kilmann Conflict Mode Instrument.
(5)
Avoid
Accommodate
Compete
Collaborate
Compromise
State what needs to be borne in mind when dealing with conflict.
(2)
- No one method is best or will always work
- So there is a need to adopt different styles and be flexible.
State three examples of the statutory rights of a self-employed adviser.
(3)
Self-employed adviser statutory rights:
* Protection of their health and safety
* Protection against discrimination
* The rights and responsibilities set out by the terms of the contract they have with their client
List the benefits of producing structured development plans. (4)
- Ensures all elements are addressed
- Provides a record of:
** What was agreed and why
** Who is responsible for the action - Provides written records required within a regulated environment
State seven examples of the statutory rights of a full-time employed adviser.
(7)
- Employed adviser statutory rights:
- A written statement of employment
- Payment at or above the national minimum wage
- Paid sick leave, maternity, paternity or adoption leave, and holiday
- A maximum work week of 48 hours
- Antenatal care
- The ability to apply for flexible working hours
- Access to grievance procedures
- Redundancy pay and minimum notice periods
- The right not to be treated less favourably if they work part-time
Explain the difference between the need identified and the objectives within the development plan.
(4)
Need identified:
* Describes in general terms what the training needs is
Objectives:
* Describes what the individual will be able to do as a result of the training
* Under what conditions
* To what standards
State the relevance of a development plan to the organisation’s corporate objectives.
(4)
- Development should increase loyalty to the organisation.
- An improvement in competency will result in increased business.
- Overall improvement in persistency, complaints and KPIs
- Meets the regulatory requirement for all advisers to be appropriately trained
You observe an adviser in an accompanied visit and identify a potential training need around the explanation of the effect of charges on an OEIC.
State the steps you could take to identify if this was a knowledge or
skills issue.
(6)
Skills:
* Observation in the workplace
* Roleplays
* Mystery shoppers
* Client Questionnaire
Knowledge:
* Test product knowledge/written or verbal
* E-learning
* Case studies
* Written documentation e.g., suitability reports
List four advantages and four disadvantages of using accompanied visits as a method of validating training.
(8)
Advantages:
* Can help to develop skills and experience
* Gives direct evidence
* Helps assess if learning is being transferred to the workplace
* “Real life’ situation
Disadvantages:
* Time consuming
* Validation depends on the skill of the trainer
* Snapshot only
* Can cause pressure on all participants
* Not an effective way of assessing knowledge
Lewis, one of your team members, is underperforming.
At this stage, you’re not sure what the cause of the issue is and would like to investigate to see what you can do to remedy the situation.
Explain the difference between the aims of coaching and counselling.
(4)
Coaching:
* Help to improve and apply knowledge and skills
* Help to improve overall performance
Counselling:
* Provide guidance and support
* Help individuals to manage their problems using their available resources
List the skills required to undertake a counselling session.
(5)
- Active listening
- Ability to show empathy
- Tolerance
- Skilled questioning techniques
- Ability to summarise
State the potential benefits for an organisation that is able to provide
effective counselling to its employees.
(4)
- Lessen the chances of:
- Loss of productivity
- Absenteeism
- Staff turnover
- Possible increase in staff loyalty and commitment
*
Explain the purpose of the FCA’s Consumer Duty initiative.
(2)
- Achieve a higher and more consistent standard of consumer protection
- Stop harm before it happens
List the details which should be contained within the records of complaints relating to MiFID II business.
(4)
The complainant’s name
The substance of the complaint
Correspondence
Details of any redress
State the time period for which records of complaints in relation to
MiFID II business should be retained.
(1)
5 years
With reference to the key elements of the Consumer Duty:
Explain briefly the overarching cross-cutting rules firms must
adhere to.
(3)
- Overarching cross-cutting rules
- Act in good faith towards retail customers
- Avoid causing foreseeable harm to retail customers
- Enable and support retail customers to pursue their financial objectives
With reference to the key elements of the Consumer Duty:
State the four key consumer outcomes firms must comply with
in dealing with retail customers.
(4)
Four key consumer outcomes
* Products and Service
* Price and value
* Consumer understanding
* Consumer support
State the frequency of providing complaints reports to the FCA.
(1)
Twice a year
State the benefit of using a ‘balanced scorecard’ to measure an individual’s overall performance.
(2)
The balanced scorecard approach uses more than just financial indicators to measure performance against the company’s criteria and standards.
Identify four examples of areas that could be included on a ‘balanced
scorecard’.
(4)
- Financial
- Fair outcomes for customers
- Internal quality
- Learning and growth
List the benefits of the performance review and appraisal for the organisation.
(6)
- Can be used to check the effectiveness of:
- The recruitment process
- The induction process
- Previous training/development programmes
- Can identify future training needs and allow appropriate planning
- Can provide the information to ensure SM&CR Conduct Rules are met
State the purpose of the Investors in People standard.
(2)
- To recognise good practice for improving an organisation’s performance.
- Through the training and development of its people to achieve business goals.
Identify the three performance headings the Investors in People standard uses to explore the practices and outcomes within an organisation.
(3)
- Leading
- Supporting
- Improving
Explain the differences between breach of contract awards and
discrimination case awards.
(5)
- Breach of contract awards are capped at £25,000
- If brought through an employment tribunal
- Larger claims can be made through the civil courts
- Discrimination case awards are unlimited.
- In addition to loss of earnings, claimants can claim damages for injury to feelings
