Learning outcome 6

Question 1

63. Following settlement of a Financial Ombudsman Service (FOS) case, the complainant was awarded
    compensation. The complaint related to a loss that occurred in March 2019. The FOS
    recommended monetary award was £200,000. If the complaint was referred to the FOS on 1
    August 2019 excluding interest, how much was the respondent obliged to pay the complainant?
    A. £100,000
    B. £150,000
    C. £160,000
    D. £200,000

Answer 1

C

Question 2

64. An authorised firm must report changes to its business, in line with the Financial Conduct Authority’s ad hoc reporting requirements, in which circumstances shown below?
    i) The appointment of a new director
    ii) The appointment of a new customer services manager
    iii) New head office premises being established
    iv) The appointment of a new pension transfer adviser
    v) Reissuing a sales aid

A. i, iii and iv only.
B. i, ii and iv only.
C. ii, iv and v only.
D. iii, iv and v only.

Answer 2

A

Question 3

65. Three financial advisers have transacted business over the past 12 months as follows

Rob Pension transfers, life assurance

Derek Pension transfers, regular contribution stakeholder pensions

Tim Cash ISAs, equity release

From this information, it can be deduced that

A. Tim will not need to keep his suitability records indefinitely.
B. Rob will be subject to the greatest supervisory monitoring requirements.
C. Derek will need to keep his Training and Competence records the longest.
D. Rob and Derek are likely to be supervisors

Answer 3

A

Question 4

88. Which member of staff in a large authorised firm would usually be deemed to be carrying out a significant influence function?
    A. A complaints department assistant.
    B. A customer services manager.
    C. The Money Laundering Reporting Officer.
    D. The compliance officer.

Answer 4

C, D

Question 5

89. In respect of an authorised firm’s record-keeping requirements (tick all that apply)
    A. all advice records must be kept indefinitely.
    B. pension transfer records can be destroyed after seven years.
    C. financial promotions for occupational pension contracts must be kept for a minimum of six years.
    D. pension opt-out records must be kept indefinitely.
    E. life assurance advice and recommendation records must be kept for a minimum of five years.

Answer 5

C, D, E

Question 6

90. Frank posted a letter of complaint to his independent financial adviser (IFA) on 1 March, which was received by the firm on 3 March. The firm sent an acknowledgement on 5 March, a holding response on 30 March and a final response on 26 April. From this information, it can be deduced that the
    A. acknowledgement was not sent within the prescribed time limit.
    B. final response was sent within the prescribed time limit.
    C. Frank was not kept informed of progress correctly.
    D. IFA must have informed Frank of his Financial Ombudsman Service referral rights by 26 April.

Answer 6

B, D

Question 7

91. Jim, a sole trader independent financial adviser, is considering his position regarding the Financial Ombudsman Service’s (FOS) rules and jurisdiction. He should be aware that
    A. the maximum award ignoring costs and interest for complaints is currently £160,000.
    B. compensation may be awarded for both financial and non-financial loss.
    C. compensation may be awarded to a limited company if it suffers financial loss.
    D. all FOS decisions are binding on both Jim and the complainant.

Answer 7

B, C

Question 8

66. The Financial Ombudsman Service (FOS) received a complaint in May 2020 in relation to a financial
    loss that occurred in September 2019. The FOS has recommended a monetary award of £230,000 for financial loss and £3,000 for interest. Assuming that the FOS make the judgement that the
    respondent should meet the claim against them, the amount that is binding on the respondent is

A. £150,000
B. £160,000
C. £230,000
D. £233,000

Answer 8

D

Question 9

92. What circumstances would give rise to a financial crime under the Financial Conduct Authority’s jurisdiction? (Tick all that apply)
    A. Failing to report a suspicious transaction.
    B. Using privileged information about a company to make a financial gain.
    C. Failing to keep client records up to date.
    D. Knowingly recommending a product with high charges.

Answer 9

A, B