RO1 - S.7 - . Apply the regulatory advice framework to ensure fair outcomes for the consumer

Question 1

What is the difference between generic guidance and provider guidance?

Answer 1

• Generic – generic info provided through independent bodies such as Money and pensions service, free of charge
• Provider guidance – Specific info provided and usually have to pay

Question 2

What was the effect of Mifid II on advice services?

Answer 2

MiFID II created a harmonised approach to advice – more emphasis on making sure the client understands the service, charges and products

Question 3

What is replacement business and what should advisers not do in these types of cases?

Answer 3

Assessing client’s existing policies/ plans client has but can’t recommend replacement business for client so the adviser gains commission

Question 4

What is the difference between a single tied and multi tied adviser?

Answer 4

Both are restricted advisers, but multi tied can reccomend products from a select range of advisers wheras single tied and only reccomend one provider

Question 5

What are the 4 different stages of giving advice?

Answer 5

Status disclosure
KYC
Recommendation
Review and monitor

Question 6

What are the two different types of financial promotions?

Answer 6

Real time & non real time

Question 7

What would be an example of a real time financial promotion?

Answer 7

A real life discussion/ phone call

Question 8

What would be an example of a non-real time financial promotion?

Answer 8

Written promotions like adverts/ billboards/ social media

Question 9

Who approves non-real time financial promotions?

Answer 9

A company’s internal compliance department

Question 10

What are the 3 different types of clients that firms can categorise their clients as?

Answer 10

a) retail clients
b) professional clients
c) eligible counterparty

Question 11

In what two ways can a professional client be categorised?

Answer 11

a) Elective (industry expert)
b) Per Se (financial firm)

Question 12

What circumstances can determine if a customer can be classed as vulnerable?

Answer 12

Age, current circumstances, health

Question 13

What is a terms of business?

Answer 13

(advice sets) which sets out the terms of engagement with the client before advice

Question 14

What is limited advice?

Answer 14

advice limited to one area of financial planning (e.g just investments) – should be client that drives this

Question 15

What is advice on an insistent customer basis?

Answer 15

client insists on an action that is against adviser’s advice and goes against the recommendation

Question 16

Is advice given in execution only business?

Answer 16

No

Question 17

What is non-advice business?

Answer 17

No personal recommendation made but client makes their own informed decision through their own means

Question 18

What is best execution business?

Answer 18

Specific to share dealing for stockbrokers to have duty of care to get the best price possible

Question 19

How do firms have to provide cancellation rights to clients?

Answer 19

In writing

Question 20

For LISAs and Life & Pensions products what are the cancellation periods?

Answer 20

30 days

Question 21

For Cash ISAs, EIS & collecitve investment schemes what are the cancellation periods?

Answer 21

14 days