Feb 2024 Exam Guide Flashcards
Model Answers
Henrietta works for a financial services firm and is subject to the certification regime. - Identify four relevant examples of roles in scope of the certification regime. [4]
- Advisors.
- Material risk takers/ significant harm function or roles.
- Head of IT.
- Head of Risk.
- Managers of certified individuals/Director.
- CASS oversight function.
- Other relevant examples.
Henrietta works for a financial services firm and is subject to the certification regime. - State the two principal regulatory requirements Henrietta must adhere to in her role. [2]
- Fit & proper requirements/ all three elements.
- Conduct rules requirements/ all five elements.
State and explain briefly the competencies a manager must demonstrate in their role. [8]
Personal effectiveness
* Striving for excellence.
* Taking initiative.
Working with others
* Customer focus.
* People focus.
* Building understanding and trust.
* Influencing skills.
Creating solutions
* Seeking information.
* Understanding issues.
* Problem solving.
Managing the team
* Leadership.
* Communication/ a relevant example of.
* Maintaining compliance standards.
* Managing performance.
* Developing others.
State three assets and three liabilities from Belbin’s leadership model for each of the following team roles: Resource Investigator [6]
Assets
* Likeable/ sociable.
* Relaxed.
* Enthusiastic.
* Prevents team from stagnating.
Liabilities
* Not original ideas person.
* Easily bored and demoralised.
* Cannot work alone.
* Can become involved in irrelevancies.
State three assets and three liabilities from Belbin’s leadership model for each of the following team roles: Shaper [6]
Assets
* Extrovert.
* Full of energy.
* Self-confident.
* Focuses and motivates team.
Liabilities
* Anxious.
* Impulsive.
* May be seen as aggressive.
* High control need.
Anita is a supervisor and is considering the best forms of two-way communication to utilise with her team members. - Identify three advantages of Anita using face-to-face meetings. [3]
- She can communicate with multiple team members at once.
- Communication at several layers – verbal, visual, body language.
- It allows for interaction and feedback.
- 1-2-1 meetings are good for sensitive issues.
Anita is a supervisor and is considering the best forms of two-way communication to utilise with her team members. Identify three disadvantages of Anita using video calls. [3]
- There is no record of what was said and agreed unless calls are recorded.
- It may be time consuming if used to communicate with each team member.
- Video calls may be subject to poor communication/ connection issues/ people interrupting.
- Team members less likely to fully participate on video calls/ more likely to be distracted.
State five elements that could be included in a person specification and provide an example for each of these elements. Exclude physical make up and interests from your answer. [10]
Qualifications and experience
* Level 4/ experience of pension transfer/ another relevant example.
General intelligence
* Numeracy/ verbal reasoning/ another relevant example.
Special aptitudes
* Advisory skills/ IT literacy/ another relevant example.
Disposition
* Dependability/ positive attitude/ another relevant example.
Circumstances
* Mobility/ ability to work remotely/ another relevant example.
Alan is a financial adviser, specialising in pensions transfers and is currently applying for a Statement of Professional Standing (SPS). - Identify the four requirements Alan must meet to obtain an SPS. [4]
- Alan must adhere to a code of ethics.
- He must meet the FCA conduct rules (COCON) or statement of principles and Code of Practice for Approved Persons (APER).
- He must be level 4 qualified.
- He must have kept his knowledge up-to-date by undertaking appropriate CPD.
Alan is a financial adviser, specialising in pensions transfers and is currently applying for a Statement of Professional Standing (SPS). - Outline the additional Continuous Professional Development that Alan must complete on an annual basis as a pension transfer specialist. [3]
- Pension specialists must complete a minimum of 15 hours of pension transfer role appropriate CPD.
- A minimum of 9 hours of this must be structured CPD.
- At least 5 hours of this must be provided by an external independent provider.
Jaden attended a course to develop his counselling skills, to better support his team. - State five examples of skills required to lead a counselling session. [5]
- Active listening.
- Empathy.
- Tolerance.
- Skilled questioning techniques.
- Ability to summarise.
Jaden attended a course to develop his counselling skills, to better support his team. - State and explain briefly the three stages of counselling, in accordance with the Michael Reddy model. [6]
Understanding
Gain an understanding on what the problem is.
Challenging
Get the individual to look at the problem in a different light/ redefine the problem/ identify the underlying issue.
Resourcing
Encourage the individual find the solution and give support.
List the twelve Principles for Businesses. [12]
- Integrity.
- Skill, care and diligence.
- Management and control.
- Financial prudence.
- Market conduct.
- Customers’ interests/TCF.
- Communications with clients.
- Conflicts of interest.
- Customers: relationships of trust.
- Clients’ assets.
- Relations with regulators.
- Consumer Duty/ Customer Outcomes.
Identify the mandatory information that must be included in a suitability report provided to a retail investor. [6]
- It should specify the client’s goals and objectives/ demands and needs.
- It should explain why the recommendation is suitable for the client based on their circumstances/ needs/ objectives.
- Any possible disadvantages to the client needs to be explained.
Identify six additional items that should be included in a suitability report to demonstrate the advice given. [6]
- The client’s circumstances/ objectives should be recapped.
- An explanation of all areas of the recommendation should be included/ advantages & disadvantages.
- Refer to alternative products discussed, or products first recommended and rejected.
- Be personalised, with technical terms explained, in plain English.
- Refer to each need highlighted by the adviser and not taken forward including the reasons.
- Any charges associated with the recommendation should be explained clearly.
State three elements of the annual appraisal process and provide two examples of the benefits of each. [9]
Performance review
* Review performance against objectives/ provide feedback.
* Understand the reasons for success or failure.
* Helps inform job-related training needs (BAU).
* Helps evidence the requirements of the SMCR regime.
Potential review
* Assesses future prospects in a company/ future plans.
* Helps inform suitability for promotion/ business succession planning.
* Identifies developmental training needs/ skill shortages (Future).
Reward review
* Establishes the link between performance and pay.
* Assists with pay review/ bonus decision
Explain briefly the purpose of ISO 9000 for a financial services firm. [3]
- The firm maintains a framework/ adequate evidence.
- This enables continuous improvement of products and services.
- Helps demonstrate that the firm has reliable systems in place.
List the five key areas covered by ISO 9000. [5]
- Defined organisational structure.
- Internal quality audits.
- Defined processes.
- Management review.
- Formal training systems.
List the relevant COCON rules an employee of a financial services firm performing a certified role is expected to adhere to.
[5]
- Act with integrity.
- Act with due skill, care and diligence.
- Must be open and cooperative with the FCA/ PRA/ other regulators.
- Must pay due regard to the interests of customers and treat them fairly.
- Observe proper standards of market conduct.
- Act to deliver good outcomes for retail customers.
Outline the benefits of using exception reports when managing a team. [5]
- Highlight potential problems/ under-performance.
- Identify differences in performance between team members.
- Identify who is achieving well/ exceeding targets.
- Help identify trends.
- Allows the manager more time to focus on planning/ less data.
State and explain briefly the three main objectives of disciplinary action for an employer.
[6]
Rehabilitation
Bring about a change in behaviour.
Deterrence
Discourage similar performance.
Retribution
Measures taken to tackle inappropriate behaviours.
John was dismissed due to unsatisfactory performance and is taking his employer to an employment tribunal on the basis of unfair dismissal. - Identify four examples of evidence his employer could provide to an employment tribunal to demonstrate they acted reasonably.
[4]
- 1-2-1s/ regular reviews took place.
- Training was provided.
- John’s performance was measured objectively by KPIs.
- John’s under performance was highlighted and he was given the opportunity to address this/ evidence of the underperformance/ process has been followed.
- The firm’s disciplinary procedures were followed.
John was dismissed due to unsatisfactory performance and is taking his employer to an employment tribunal on the basis of unfair dismissal. - State and explain briefly the two most commonly used remedies that may be available if the tribunal rules in John’s favour.
[6]
Reinstatement
* The employee must be treated by the employer as if they have never been dismissed.
* They must be re-employed on the same basis.
Compensation
* This can be a basic award which is calculated on a fixed formula that takes into account age and service.
* Or a compensatory award based on the loss of past and future earnings and associated earnings.
Identify and explain briefly the three key elements of corporate objectives.
[6]
Mission
* What the firm is seeking to attain.
* The main reason for the firm’s existence/ relevant example.
The strategic objectives
* Big picture goals.
* Example of a big picture goal e.g. increase market share.
The business strategy
* The actions and plans the firm will take to achieve its corporate objectives.
* Example of a specific plan/ action e.g. marketing plan, resource planning.
