Fair Conduct

Question 1

What are 6 TCF Outcomes?

Answer 1

1. Fair treatment of customers is central to corporate culture.
2. Products and services meet the needs of consumers
3. Customer are informed before, during and post-sale.
4. Advice is suitable
5. Products and services perform as per customer expectations.
6. There are no unreasonable post sale barrier claims, complain or switch product.

Question 2

What is the best interest rule?

Answer 2

Firms to act in the best interest of their client’s and avoid conflicts of interest.

Question 3

What is the law of contract and capacity?

Answer 3

The contact is the agreement with a client. Capacity is the client’s ability to enter into a contract.

Question 4

What is the law of agency?

Answer 4

An adviser can act on behalf of the client for buying and selling.

Question 5

To whom are rights and duties held against in unincorporated bodies?

Answer 5

They are held against the individual members of the collective.

Question 6

How can a client allow a firm control its assets?

Answer 6

Through a subscribing to custodial services of trust services.

Question 7

What legal instrument would a client require to get someone else to act on their behalf?

Answer 7

Power of Attorney

Question 8

What is the law of succession?

Answer 8

Assets pass to a successor or heir after the client’s death.

Question 9

What is a trust?

Answer 9

Assets are managed by a person or organisation for the benefit of another.

Question 10

What would regulators expect senior management to demonstrate in regards to TCF?

Answer 10

1. Leadership is central - TCF vision
2. Integration of TCF into firm’s strategy
3. Decision-making, controls and MI to allow a firm to be satisfied that TCF is being achieved.
4. Recruitment, training of people who are competent.

Question 11

What should firms creating financial promotions ensure when creating the promotions or reviewing it for sign-off?

Answer 11

• Statement that ‘capital at risk’.
• Quoting of yields gives a balance view of short and long term prospects.
• Complex charges are communicated fairly, clearly and are not misleading.
• Regulator is named.

Question 12

What are things that a firm using another firm’s financial promotions need to check?

Answer 12

• To ensure that the promotion has been signed off by an authorised firm.
• Ensure that the promotion reaches the intended target market.
• Check that the promotion is fair, clear and not misleading and that it hasn’t been withdrawn by the other party.
• Check that the material gives a clear impression of who the producer of the material is.