Chapter 9 & 10 Flashcards
2021 mock paper Q 72. After an adviser has discussed Terry and Mary’s personal goals and made a product recommendation, what must they do?
D. Issue the couple with information about the product in writing
2021 mock paper Q 73. Your client John has said that all of their current investments are in emerging market funds. What might this indicate to you as John’s adviser?
A. That John was considering retiring abroad
B. That John has little confidence in the UK stock market
C. That John was reckless
D. That John has an adventurous attitude to risk
D
2021 mock paper Q 74. Which of the following would you expect to find in the financial section of a fact-find? i) Monthly income and expenditure ii) Regular savings iii) Employment details iv) Family details A. i only B. i and iii only C. i and ii only D. iii and iv only
C
2021 mock paper Q 75. When recommending a product, it is important that its suitability is discussed. Each of the following would normally be discussed at this stage, with the exception of?
A. The remuneration for the adviser
B. The term of the product
C. Affordability
D. The tax treatment and investment risk of the product
A
2021 mock paper Q 76. Which of the following describes the FCA’s Principle 9 ‘Customers: relationship of trust’?
A. A firm must pay due regard to the information needs of its clients
B. A firm must maintain adequate financial resources
C. A firm must conduct its business with integrity
D. A firm must take reasonable care to ensure the suitability of its advice
D - Clients don’t know better so we could just recommend horseshit and they would take our word for it, hence the trust
2021 mock paper Q 77. The essence of outcomes-based regulation is about the regulator:
A. having rules to cover every specific situation
B. providing tangible standards for firms to achieve
C. setting out general terms for the types of behaviour they expect to see
D. making judgments on what might happen in the future
D
2021 mock paper Q 78. Which of the following would be an example of poor leadership?
A. A senior manager producing a web-based update for all staff of the challenges the firm faces in achieving FTC
B. A firm spending considerable time and money pursuing an offence by an employee through court, even though it was relatively straightforward to rectify
C. Head office staff receiving training on FTC from senior management, and staff in satellite offices receiving abbreviated versions of the training by junior members of staff
D. Allowing staff to give anonymous feedback to management on incidents of failing FTC
C
Past paper Q 72. A financial adviser discovers during a fact-find interview that her client is willing to expand on his future hopes and aspirations. She decides to adapt her line of questioning to make more use of A. direct questions. B. open-ended questions. C. scripted questions. D. leading questions.
B
Past paper Q 73. During a fact-find interview, a financial adviser discovers the client is unable to recall the details of his current remuneration. The correct course of action for the financial adviser to take is to
A. terminate the interview with immediate effect.
B. continue the interview to its conclusion and then decline to offer the client any advice.
C. make an estimate of the missing information and base any recommendation on the estimate.
D. continue the interview and agree to collect the information at a later date.
D
Past paper Q 74. Typically, how should a financial adviser gather hard facts during the fact-finding process?
A. By asking open questions.
B. By asking closed questions.
C. By writing to the companies with whom the client already has financial arrangements.
D. By seeking written responses from the client only.
B
Past paper Q 75. A financial adviser is specifically discussing issues relating to best in class and engagement with his client. This is most likely to be because the client
A. is risk averse.
B. is seeking capital growth rather than income.
C. wishes to maximise her investment returns.
D. wishes to take an ethical approach.
D
Past paper Q 76. To comply with the Financial Conduct Authority’s Principles for Businesses that relate to protection of clients’ assets, when must a firm arrange adequate protection?
A. in all cases where the firm has direct responsibility for the assets.
Past paper Q 77. What discretion does an authorised firm have, if any, when it sets out to comply with the Financial Conduct Authority’s Principles for Businesses?
C. Some discretion is allowed to the firm in how they comply with the obligations.
Past paper Q 78. An authorised firm should adapt its recruitment and remuneration policies to have a positive impact on the fair treatment of customers outcomes by
A. appointing only graduates for placement into positions with the greatest customer interface.
B. creating a corporate culture that makes knowledge and training central to career progression.
C. offering only non-financial incentives to its most prolific new business producers.
D. promoting only those with a proven record of sales success into senior customer-facing positions
B
Past paper Q 79. Strong leadership within a firm is cited as an example of good practice by the Financial Conduct Authority because it usually indicates that
A. the firm’s advisory staff maintain qualifications significantly above the benchmark level.
B. the firm has eliminated products carrying high levels of risk.
C. positive and fair outcomes exist for customers.
D. there is not excessive interference from corporate stakeholders.
C
