Topic 14&15 Flashcards
A client wants to invest actively into equities with a view to capital growth. Which one of the following is going to be least important to him?
A. Regular fixed income
B. Favourable tax treatment
C. Fund managers with a good track record
D. Low dealing costs when buying/selling
A. Regular fixed income
The concept of ‘know your client’ means:
A. Understanding a client’s current position in terms of assets and liabilities
B. Getting your client to identify all his existing life and pension policies
C. Gaining a detailed knowledge of a client’s personal and financial circumstances
D. Establishing a client’s current financial position in terms of income and expenditure
C. Gaining a detailed knowledge of a client’s personal and financial circumstances
When gathering ‘fact find’ information about your client’s financial plans and objectives, which of the following is a fundamental consideration that should always be taken into account?
A. Levels of indebtedness
B. Attitude to risk
C. Employment details
D. Mortgage arrangements
B. Attitude to risk
A client is a self-employed building contractor and is considering a personal pension plan. Which one of the following is likely to be most important to him?
A. The ability to find out the value of the pension fund
B. The ability to transfer in monies from other schemes
C. The ability to increase or decrease contributions at his convenience
D. An explicit set of policy charges with no hidden extras
C. The ability to increase or decrease contributions at his convenience
Which one of the following would be important to a customer when considering their protection needs?
A. An interest rate that suits their budgeting requirements
B. Money payable under the policy to keep pace with inflation
C. To be able to access money immediately
D. To be able to track the record of fund managers
B. Money payable under the policy to keep pace with inflation
If a client does not agree with your priority of needs based on the information you have obtained from your fact find on him, what should you do?
A. Tell the customer that they are wrong and, as such, you cannot advise them further.
B. Advise of the risks that could arise from the absence of the products to match those needs.
C. Insist that your recommendations are right and only provide them with the products to fill those needs.
D. Choose to say nothing as this may upset the customer.
B. Advise of the risks that could arise from the absence of the products to match those needs.
When presenting your recommendations to a client you need to ensure that your client understands the features and benefits of the products. How can you check the client has understood?
A. By watching their body language
B. By noting the number of questions they ask
C. By asking them questions
D. By ensuring they sign all the relevant forms
C. By asking them questions
If an adviser has filled out an application form on behalf of a client the adviser should recommend that the client:
A. reads over the form and confirm that the adviser may sign it.
B. signs the declaration after the adviser has read out the answers on the form.
C. checks the form for accuracy and signs the declaration.
D. signs an execution only form.
C. checks the form for accuracy and signs the declaration.
Which one of the following is a reactive service call?
A. Calling a customer after the non-payment of premiums
B. Calling a customer to discuss whether their circumstances have changed
C. Visiting a customer to talk to them about a new product
D. Visiting a customer following a diary note prompt
A. Calling a customer after the non-payment of premiums
Of the information below, gathered in respect of Alice, which item represents a hard fact?
A. Her investment portfolio performance has been below expectations
B. Her savings account balance has fallen to £5000
C. She intends to increase her pension plan monthly contribution to £500
D. She plans to retire by the age of 60
B. Her savings account balance has fallen to £5000
Brian is reviewing a range of investment products before selecting the most appropriate solution for his client, Claire. Which factor is he LEAST likely to take into account when selecting an appropriate solution?
A. The possibility of Claire getting married in the future and having children
B. Claire’s existing portfolio of investment products
C. The fact that she has recently moved into a higher rate tax bracket
D. Claire’s desire to access her investments in five years to purchase a time share in Portugal
A. The possibility of Claire getting married in the future and having children
What is the advantage of including benefit statements when making a product presentation to a client?
A. It ensures that all point-of-sale FCA regulatory requirements are met
B. It enables the client to better understand how the product will meet his needs
C. It ensures that the client understands the risks involved with the product
D. It enables the adviser to focus on the sale rather than client queries
B. It enables the client to better understand how the product will meet his needs
Wally keeps £500 under his mattress. Which one of the following represents the effect of inflation on this amount over the period of one year?
A. It now purchases fewer pints of bitter
B. It now purchases fewer euros
C. It would have been worth £525 if it had been invested in XYZ shares
D. It would have earned £15 interest in a savings account
A. It now purchases fewer pints of bitter
Which one of the following will usually be the priority need associated with young people taking out their first mortgage during early working life?
A. An emergency fund
B. Medium term investments
C. Income protection
D. Pension planning
C. Income protection
A programme of proactive servicing by the adviser is designed to ensure that the client:
A. can take early advantage of new market opportunities.
B. checks that records are destroyed at the earliest opportunity.
C. has no need to request a further meeting.
D. will have no cause to cancel during the cooling off period.
A. can take early advantage of new market opportunities.
