Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Financial Advice R01 > R01 > Flashcards

R01 Flashcards

1
Q

Why consider reviewable critical illness cover?

A

Cheaper premiums than under a guaranteed contract.

Reviewed based on advancements in medical science not the insured’s health circumstances.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Global regulatory body

A

Financial action task force

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Debt management plan

A

Consolidation of debt in to one affordable payment which involves negotiation with existing creditors.

Adviser must be licensed under consumer credit act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Lifetime morgage

A

Property still owned by client

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Home reversion

A

Sale of property for lump sum

Client retains right to stay in property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Income protection policy

A

Benefits paid after a deferred period

4 week minimum or 12, 26 or, 52 weeks

Period chosen by client when taking out policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Payment protection insurance

A

Contributions paid monthly

Only available in connection with a loan to cover monthly repayments is made redundant or unable to work due to accident or sickness

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

CPA

A

Annuity purchased from a pension fund

Whole premium is taxed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

PLA

A

Can be purchased from other capital including a tax free lump sum from a pension

Only income element is taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Interest

A

Banks and building societies pay interest gross on deposit accounts

Basic rate tax payer has £1000 savings allowance,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

PIBS

A

issued by building societies

No redemption dates

Interest payments to investors can be missed in exceptional circumstances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Unit trusts

A

Open ended

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Investment trusts

A

Listed companies with a set number of shares

Closed ended

Investments need to be made via an investment trust savings scheme

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Public limited company

A

Must disclose the shareholdings of the company

Must have at least 2 directors and 2 shareholders

Must provide fully audited accounts

Must use plc at the end of thier name

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Banks and building societies

A

Created as a place for investors to keep thier money safe and easily accessible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Building societies

A

Owned by members

Any profit is returned to members in the form of better interest on savings or lower interest on loans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

EU initiatives

A

Driven and influenced around 70% of FCA policy making

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Residence nil rate band

A

£125,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Income protection and personal accident and sickness policies

A

Pay a regular benefit in the event of being unable to work due to accident or illness

Neither pay out on death

Accident and sickness may pay out a lump sum on diagnosis of certain permanent disabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Full new state pension

A

Must have 35 qualifying years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Platform advantages

A

Allows investor to aggregate his holdings from different companies on the same platform

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Derivative

A

A right or obligation to buy or sell another type of asset at a specified date and time in the future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Enduring power of attorney

A

Cannot relate to health or welfare decisions

Must be over 18

Cannot make substantial gifts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Lasting power of attorney

A

Has power to make decisions about donor’s welfare and financial maters

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Bankruptcy

A

Lasts 12 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Pensions regulator took over from

A

OPRA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Punishment for market abuse

A

Maximum 7 years in prison

Unlimited fine

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Flexible portfolio firms

A

Smaller firms

Supervised through event driven reactive supervision and thematic issue (product) supervision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Fixed portfolio firms

A

Larger firms

Require more proactive supervision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

ICOBS insurance categories

A

General insurance

Pure protection - term assurance, critical illness, income protection

Payment protection

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

MCOB

A

Rules for conduct for mortgage business in the UK

Standard terms and meanings for communications

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

FCA notification of investigation

A

Not required for insider trading, market abuse and misleading statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Exempt status

A

A firm can qualify for exempt status if it is contracted to an authorised person who takes responsibility for all regulated activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Persistency of products

A

Data on policy cancellations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Reporting to FCA

A

Amount held in client bank accounts

Persistency stats

Number of complaints

Annual accounts

Value of client assets in discretionary portfolios

Types of business being conducted

Number of staff

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Proceeds of crime act 2002

A

Uk’s principal statute on anti money laundering

Created several criminal offences

  • disguising criminal property
  • removing criminal property from UK
  • failing to disclose suspected money laundering
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Client data

A

NI records

Family circumstances

Bank details

Address

Date of birth

Medical records

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Pure protection policies

A

No surrender value

Benefits payable on death or incapacity

Term assurance

Income protection

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Exempt from providing client agreements

A

Direct offer promotions

Life offices selling life and pension policies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Client agreement

A

Must include

  • risk warnings
  • restrictions
  • confirmation of FCA regulation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Acceptable limitations

A

Reliance on information provided by client

Reliance on others (third parties)

Insufficient evidence to make a recommendation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Monetary Policy

A

Concerned with the management of interest rates and supply of money

Increasing interest rates will reduce an individuals ability to spend as borrowing becomes more expensive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Fiscal policy

A

Levels of tax and spending

Increased government spending stimulates the economy

Reducing taxes stimulates the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

3 stages of money laundering

A

Placement - cash is deposited, eg purchasing insurance policy

Layering - refund policy to get clean cheque from a legal source

Integration - integrate the money in to the legal economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Insurable interest

A

Financial interest between the life assured and the policy holder

46
Q

Life assurance acceptance

A

Valid once the first premium had been paid

47
Q

NS&I

A

Not regulated by the FCA

48
Q

Pensions regulator fines

A

£50k on a company

£5k on an individual

49
Q

Failure to monitor compliance

A

Could lead to unwelcome publicity

50
Q

Capital adequacy assessment

A

Should be carried out annually

51
Q

FCA minimum threshold (location)

A

If the corporate body is constituted under UK law, its head office and registered office must be in the UK

52
Q

FCA approval

A

A firm cannot claim their affairs have FCA approval unless the FCA requires it

53
Q

FCA application fee

A

Not refundable

54
Q

Capital requirement directive

A

Divides capital for the purpose of risk assessments into three tiers based on loss absorbency and permanence of capital

55
Q

COBS

A

Conduct of business sourcebook

56
Q

UK mortgage market review

A

Did not include imposing limits on multiple incomes and banning affordability tests

57
Q

Client money

A

The FCA expects an intermediary firm holding client money to reconcile client money every day

Interest earned belongs to the client

Must be paid in to a designated client bank account (held by an approved bank) next working day

58
Q

FOS compensation

A

Maximum of £350k plus the claimants costs and interest

59
Q

Stakeholder products

A

Medium term - minimum investment £20

60
Q

After making a product recommendation

A

Must provide client with product information to allow them to decide if it’s suitable

61
Q

Principles for business

A

Integrity

Skill, care and dilligence

Management and control

Financial prudence

Market conduct

Customers interests

Communication with clients

Conflicts of interest

Customers: relationships of trust

Client assets

Relationship with regulators

62
Q

Outcomes based regulation

A

Allows the FCA to make judgements on what might happen in the future

63
Q

Approved person

A

Someone approved to carry out a controlled function

64
Q

Fit and proper

A

Honesty, integrity and reputation

Competence and capability

Financial soundness

65
Q

Four key areas of an ethical culture

A

Capabilities - how well equipped are staff to exhibit the ethical standards expected of them

Leadership

Practices

Narratives

66
Q

Fair treatment of customers MI

A

Accuracy

Relevant

Consistent

Timely

67
Q

Ethics measures

A

Indirect - employee engagement and ethics training

Direct - customer complaints and ethical feedback

68
Q

Pre FSMA authorisation

A

Automatically authorised if previously under:

Banking act 1987

Insurance companies act 1982

SRO under financial services act 1986

69
Q

Before Appointing an AR

A

Must ensure:

Will not prevent the firm meeting threshold conditions

Firm will have adequate control over regulated activities

AR is solvent

70
Q

Customer complaints - reporting requirements

A

Must be submitted twice per year

Must include number of complaints

How many were closed within four weeks

How many closed within 8 weeks of receipt

Also those which are open longer

Must not distinguish between actual complaints and expressions of dissatisfaction as all of these are considered complaints by the FCA

71
Q

Due dilligence

A

Must be carried out if:

money laundering is suspected

When establishing a business relationship

Carrying out ad-hoc transactions

72
Q

GDPR

A

Implemented in the UK under the data protection act

Implemented across all general data processing

Gives extra powers to the information commissioner

Maximum fine £17m or 4% of turnover

73
Q

Direct offer financial promotion

A

Must give the consumer enough information to make an informed decision as to whether the product is suitable

Must include that the firm is authorised or regulated by the FCA

Full name and address of person offering the investment

Details of any charges and expenses

74
Q

A required function example

A

Compliance oversight officer

75
Q

Maximum FOS award

A

£350k

76
Q

Records of investment advice

A

Must be kept for 5 years

77
Q

Maximum time to Complete qualifications after starting to give advice

A

4 years

78
Q

Record of advertising pensions. Not including transfers, opt outs or free standing voluntary contribution schemes

A

Must be kept for 6 years

79
Q

Suitability report

A

Should be received within 14 days after the contract has concluded

80
Q

Recommendation summary provided for….

A

Stakeholder pension

81
Q

IFA doesn’t need to provide advice on….

A

Long term care insurance

82
Q

CMA objectives

A

Deliver effective enforcement

Extending competition frontiers

refocusing consumer protection

achieving professional excellence

developing integrated performance

83
Q

FCA Handbook threshold conditions

A 
Location of offices
Effective supervision 
Business model
Resources
Suitability
84
Q

FCA high level standards

Systems and controls

A

Common platform requirements

85
Q

Cooling off period

Sale and rent back

A

14 days

86
Q

Demands and needs statement

A

Details the clients needs with reasins for recommendations

87
Q

Mortgage credit directive

What is the name of the product disclosure document starting 21st march 2019

A

European standardised information sheet

88
Q

How did the consumer credit act 2016 change the definition of an individual

A

Included

sole traders
Small partnerships (less than 3)
Unincorporated associations

89
Q

How do the fca and cma work together

Regarding standard terms in contracts

A

Fca deals with regulated firms

Cma deals with unregulated firms

90
Q

Client agreement

Must include

A

Services the firm offers

Cost of those services

How they are paid for

Investment objectives

Risk warnings

Reviews

Should be kept for 5 years

91
Q

E-commerce directive rules

A

Provide access to name, address and email address

Status

Services provided

How to order product

How to amend order

Provide immediate acknowledgement when order is placed

92
Q

Key features document

A

Nature and aims of investment

Risk factors

Principle terms

Cancellation rights

Compensation arrangements fscs

Complaints procedure

93
Q

A Principles and Practise of Financial

Management document

A

A with profit regular savings policy

94
Q

Who had a statutory duty to investigate bankruptcy

A

The official receiver

95
Q

Charging clause

Why?

A

To allow professional trustees to be remunerated for their services

96
Q

MIPRU

Who is covered?

A

Home finance

Mortgage people etc

97
Q

FA may transact businesses without the prior existence of a client agreement when….

A

Business is done over the phone

98
Q

Free asset ratios

When would you compare?

A

Considering a with profits investment

99
Q

Why use a nominee company?

A

To protect the assets of a client

100
Q

Who is exempt from the FCA T&C rules

A

Non uk domiciled firms

101
Q

FCA fit and proper bankruptcy rules

A

Bankruptcy would not automatically preclude an individual

Individually asessed

102
Q

FCA fit and proper

Latest point to meet criteria for new employees

A

Before the start date

103
Q

FOC penalty

A

£150k plus costs

104
Q

Per se eligible counterparty

Example

A

A government of a country

105
Q

Help to buy maximum contribution

A

£3400

106
Q

Who is ultimately responsible for compliance

A

Senior management

107
Q

FOS rules

A

Costs cannot be deducted from a compensation award

All FOS decisons are binding

108
Q

Execution only and limited advice transactions

A

Client can always insist in proceeding

Know your customer rules apply to limited advice transactions

Complaint handling rules in relation to FOS apply to limited advice transactions

109
Q

Cancellation rights

A

If cancellation rights are not issued when required, a client may cancel at anytime

For pension transfers the firm may issue a pre sale right to withdraw as an alernative

Cancellation rights on open market options apply for 30 days before an annuity is processed

110
Q

Catergories of organisations who introduce business to a firm

A

Firms that are not fca authorised

Exempt firms

Firms that are regulated by a designated professional body

Financial Advice R01 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions