Regulation And The Buying Process Flashcards
What is the difference between solicited and unsolicited customers?
Solicited contact is made by the firm at the request of the customer.
Unsolicited contact is initiated by the firm; unsolicited phone calls (cold calling)
FCA criteria for a borrower to be classed as an HNW customer?
A) minimum annual net income of £300,000, or minimum net assets if £3m
B) minimum annual net income of £3m, or minimum net assets of £300,000
C) minimum annual net income of £30,000, or minimum net assets of £3m
A) minimum annual net income of £300,000, or minimum net assets if £3m
Criteria that defines a professional customer?
A) for how long must they have worked recently in the home finance sector?
B) what must their professional position require?
C) of what must the firm reasonably believe they are capable?
A) at least a year
B) knowledge of the product or service to be provided
C) understanding the risks involved in the proposed arrangements
What are the key differences that distinguishes a regulated mortgage for business purposes from a regulated mortgage for a personal borrower?
A) one of the purposes of the loan, remortgage or further advance is to raise additional money for the use of a small business
B) the sole purpose of the loan, remortgage or further advance is to raise additional money for the use of a small business
C) the sole purpose of the loan, remortgage or further advance is to raise additional money for the use of a large business
B) the sole purpose of the loan, remortgage or further advance is to raise additional money for the use of a small business
Which of the following are likely to be able to arrange a mortgage on an execution only basis without receiving qualified advice:
A) Richard, who is an experienced mortgage advisor and wishes to arrange a further advance on his own property
B) Shannon, who wants to buy her flat under a right to buy scheme
C) Niall, whose wife died last month and is seeking to relocate nearer to the children
A) Richard, who is an experienced mortgage advisor and wishes to arrange a further advance on his own property
Which of the following is true in all circumstances in relation to unsolicited real-time financial promotions?
A) they can only be made to existing customers
B) they can not be made at an unsocial hour
C) contact cannot be made on an unlisted telephone number
D) they can be made to any person on the company’s mailing list
A) they can only be made to existing customers is correct
B) is untrue in that calls can be made at unsociable hours if the customer has previously agreed.
C) is untrue in that a call can be made to an unlisted number if the customer has agreed beforehand
D) is untrue in that being on a mailing list is different from being a customer
Alex is his firms marketing manager and he has just withdrawn a marketing mailshot, which will not be used again. For how long must his firm keep a copy of the mailshot?
A) 6 months
B) 12 months
C) 36 months
D) 60 months
B) 12 months
For how long must a firm keep a record of an execution only sale?
A) one year
B) two years
C) three years
D) five years
C) three years
An HNW customer can proceed on an execution only basis if the firm has evidence that the customer meets the criteria and has selected the product they require or has rejected advice given. True or false?
True
If there is no suitable product for a customer from within the range available, the advisor can recommend the closest fit from those available. True or false?
False.
The advisor must not recommend any product if there are none in the range offered that meet the clients needs and circumstances
Examples of the ARPC shown in the financial promotion must be ‘representative’. This means that a specified percentage of those who respond to the promotion and those who enter into the contract advertised would be charged the quoted APRC. What is the percentage?
A) 35 percent
B) 51 percent
C) 75 percent
B) 51 percent
If a recommendation is made over the telephone, an illustration must be sent to the customer within:
A) five business days
B) seven business days
C) five calendar days
D) seven calendar days
A) five business days
Lenders cannot make provisional offers to borrowers in relation to MCD regulated mortgages. True or false?
False
An offer of advance can be provisional but once all due diligence has been completed the final offer for an MCD regulated mortgage is binding.
Chen has applied for a further advance on his regulated mortgage. Once he receives an offer from the lender, how long will he have to think about whether to accept it according to MCOB6A?
MCOB6A sets out the requirement for a seven day reflection period once a binding offer is made
As Chen is an existing customer applying to vary the terms of an existing MCD regulated mortgage neither the requirement for a binding offer or seven day reflection period apply.
The offer document must include details of the amount and dates of the initial and subsequent repayments due. True or false?
False
This information must be provided before the first payment is made on a new mortgage, a further advance or a variation to the terms of a mortgage.
