Learning outcome 9

Question 1

76. To comply with the Financial Conduct Authority’s Principles for Businesses that relate to protection of clients’ assets, a firm must arrange adequate protection
    A. in all cases where the firm has direct responsibility for the assets.
    B. only where clients’ assets under the firm’s control exceed £1,000,000.
    C. only where clients have a high level of borrowing in comparison with their income level.
    D. only where clients have purchased products that are inconsistent with their risk profile.

Answer 1

A

Question 2

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?
    A. It can apply for exemption if its application is supported by a designated professional body.
    B. It can apply for exemption provided it is responsible for the activities of less than 10 appointed representatives.
    C. Some discretion is allowed to the firm in how they comply with the obligations.
    D. A firm’s obligations are prescribed in a regularly-updated tariff and no discretion is allowed.

Answer 2

C

Question 3

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.

Answer 3

B

Question 4

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.

Answer 4

C

Question 5

80. Who within an authorised firm is ultimately responsible for compliance with the Financial Conduct
    Authority’s outcomes-based regulatory regime?
    A. Senior management only.
    B. The compliance officer only.
    C. All members of staff.
    D. The Money Laundering Reporting Officer only.

Answer 5

A

Question 6

81. Shaun is an architect and a client of Alice, who is a financial adviser. Shaun refers his employee,
    Brian, to Alice for pensions and protection advice. Brian informs Alice that he is dissatisfied with
    the benefits package he receives from Shaun. Alice is wary of a potential conflict of interest and must therefore
    A. advise Brian on pension matters, but not on protection matters.
    B. advise Brian on protection matters, but not on pension matters.
    C. decline to offer Brian any financial advice.
    D. maintain strict neutrality.

Answer 6

D

Question 7

82. If an authorised firm discovers that one of its advisers no longer meets the fit and proper
    requirements as he is currently in mortgage arrears, what action must the firm take, if any?
    A. None, as this would be an internal matter.
    B. Notify the Financial Conduct Authority.
    C. Refer the adviser to a debt counselling organisation.
    D. Terminate the adviser’s employment within a maximum period of three months.

Answer 7

B