Regulatory Advice Process

Question 1

When must a suitability report be provided?

Answer 1

When a firm is recommending that a client should:
- take action in relation to a life or income protection product.
- buy or sell investments
- buy, sell, surrender, cancel or suspend premiums to a pension contract
- commence drawdown pension from a registered scheme
- enter into a pension transfer or opt out arrangement.

Question 2

What must a suitability report specify?

Answer 2

• The clients demands and needs
• why the recommendation has been made and why it is suitable
• any possible disadvantages
• a summary of the consequences and risks.

Question 3

Which investments have a 14 day cancellation policy?

Answer 3

• opening and transferring ISAs
• OEICs
• Child trust fund
• enterprise and collective investments

Question 4

Which investments have a 30 day cancellation period?

Answer 4

• life policies
• pensions
• annuities
• OEICs and EISs purchased alongside a life policy.

Question 5

What does the initial fact find meeting cover?

Answer 5

• initial adviser status and services disclosure
• fact finding / know your client
• customer due diligence

Question 6

What information must be disclosed about the firm?

Answer 6

• their status
• services and advice offered
• how they are paid