Sept 2023 Exam Guide Flashcards
Model Answers
State four examples of individual conduct rules that apply only to senior managers.
[4]
SC1: Must take reasonable steps to ensure the business is controlled effectively.
SC2: Must take reasonable steps to ensure the business complies with the relevant requirements and standards of the regulatory system.
SC3: Must take reasonable steps to ensure that any delegation of responsibilities is to an appropriate person and that this is overseen effectively.
SC4: Must disclose appropriately any information of which the FCA or PRA would reasonable expect.
Define the competent employees rule.
[2]
- All employees should have the skills, knowledge and experience necessary for the discharge of responsibilities allocated to them.
- This includes a good standard of ethical behaviour.
Describe briefly a risk-based approach to supervision.
[3]
- A risk-based approach means that supervision is tailored to the level of risk identified.
- Not everyone is treated in the same way.
- Resources are focused on the people and areas that are needed the most.
State two circumstances where supervision is likely to be more intense due to a risk-based approach being taken by a manager.
[2]
- Trainees/ new/ returning to role will require closer monitoring and support until they are confident with their tasks.
- Employees with performance issues.
List the first six key steps of Kotter’s eight steps to leading change model and provide an example of a potential disadvantage for each one.
Your answer must exclude the last two steps: ‘consolidate improvements and produce more change’ and ‘institutionalise new approaches.’
[12]
Establish a sense of urgency
* Underestimating the difficulty of driving people from their comfort zones.
* Becoming ‘paralysed’ by risks.
Form a powerful guiding coalition
* No prior experience of teamwork at the top.
* Relegating team leadership to HR rather than senior line management.
Create a vision
* Vision is too complicated or too vague.
Communicate the vision
* Under-communicating the vision/ lack of clarity.
* Behaviour does not convey/ is antithetical to the vision.
Empower others to act on the vision
* Failing to remove powerful individuals who resist the change effort.
Plan for and create short-term wins
* Leaving short-term successes to chance.
* Failing to score successes early enough/ in the first 12-24 months.
State four advantages and four disadvantages for a business using social media as a method of communication.
[8]
Advantages
* Reaches a large potential audience.
* Instant way of communicating messages/ call cost-effective.
* Enables feedback.
* Informal.
Disadvantages
* Difficult to control/ reshared.
* Not good for detailed/ technical/ sensitive information.
* Cannot control feedback/ assessor response/ misinterpretation.
* Some platforms (e.g. Twitter/X) restrict length of communication/ overload.
* Less accessible to some people/ may not be read on time/ missed.
Jacob is a senior manager performing a certified role.
Identify the three key areas that must be assessed when undertaking a fitness and propriety assessment.
[3]
- Honesty, integrity and reputation.
- Competency and capability.
- Financial soundness.
Jacob is a senior manager performing a certified role.
State how frequently Jacob’s fitness and propriety will be assessed after his initial assessment.
[2]
- On an ongoing basis/ usually annually.
- Ad hoc/ an example: when starting new job/role, disciplinary, conduct rule breaches.
Identify and define three key types of information used to assess training needs, providing an example for each.
[9]
Environmental
* External factors to the business.
* Regulatory / tax / legislative changes.
Organisational
* Companywide issues.
* Accreditation/ new systems/ new software.
Individual
* Relating to the requirements of one person.
* Performance management issues/ test results/ file reviews.
Rhona is a team supervisor and is preparing a training and development plan for Morag, one of her team members who wishes to progress in her role.
List the eight key steps of the plan to help Morag achieve her objective.
[8]
- Identify Morag’s development needs.
- Suggest training methods/link the training and development to Morag’s specific needs.
- Agree on the appropriate development activity/ timeline.
- Record all of the above on the plan.
- Ensure the agreed plan is implemented/provide support.
- Evaluate the success of the plan/regular reviews.
- Address any shortfalls and undertake reassessment as necessary.
- Support with transferring the learning to the job/implementation.
Rhona is a team supervisor and is preparing a training and development plan for Morag, one of her team members who wishes to progress in her role.
State two ways in which Morag’s training and development plan could benefit her employer.
[2]
- Retention/ alignment to corporate objectives.
- It contributes to the company’s regulatory obligation to ensure that advisers are fully trained for their role.
Rhona is a team supervisor and is preparing a training and development plan for Morag, one of her team members who wishes to progress in her role.
State four ways in which the training and development plan could benefit Morag.
[4]
- Skills and knowledge improved/ competencies are enhanced.
- Increased motivation.
- The plan can contribute to Morag’s CPD/ performance management process/ written record.
- It could lead to increased earnings/ success/ promotion for Morag.
List and explain briefly the six key stages of the financial advice process.
[12]
(COBS) disclosure requirements
* Adviser status/ nature of service/ cost of advice.
Know your customer/ fact finding
* Personal information/ income & expenditure/ assets & liabilities/ aims and objectives/ attitude to risk & capacity for loss.
Anti-money laundering requirements
* Verification of client’s identity and address/ source of funds & wealth.
Analysis of needs/formulate recommendations
* Shortfalls in financial provision identified and solutions researched which meet the client’s priorities.
Presentation of recommendations
* Verbally and also documented in a suitability report.
Next Steps/ Ongoing Service
* Cancellation rights/ cost and frequency of ongoing service if client wants this service.
State and explain briefly five data protection principles of the UK General Data Protection Regulation (GDPR).
[10]
Lawfulness, fairness and transparency.
* Handled in the way people expect/ compliance with the ‘right to be informed’.
Purpose limitation.
* Collected for specified, explicit and legitimate purpose and processes.
Data minimisation.
* Adequate, relevant and necessary.
Accuracy.
* Up to date.
Storage limitation.
* Permits identification of data subjects for no longer than necessary.
Integrity and confidentiality.
* Protection against unlawful and unauthorised processing and accidental loss, destruction and damage.
Explain briefly the purpose of using a balanced scorecard.
[4]
- Measurement of individual performance.
- Measurement of contribution to corporate objectives;
- across a number of different areas/ holistic;
- on an ongoing basis.
