Topic 9 - Ethical Considerations

Question 1

What the are 5 requirements of the FCA towards financial advisers?

Answer 1

Government needs to prioritise resources, however won’t statisfy all of society as different view points which change over time.

Shadow economy estimated at 1/5 of GDP on average across EU member states - nearly €2tr. Not victimless, every £ not paid by fraudsters is £ that must be paid by others.

FCA Requires advisers to:

1. Act with integrity
2. Act with due skill, care and dilligence
3. Ensure clients are treated in a way that is clear, fair and not misleading
4. Ensure they recommend the most suitable product for their client
5. Treat clients fairly

Question 2

Dealing with HMRC

Answer 2

Adviser may find client is not paying right tax or declaring all of income.

Must decide whether honest mistake or intentional tax evasion.

If lack of understanding then adviser should point client towards HMRC to declare mistake which may help reduce any fines or penalties

May be concerned about jeapordising good relationship with client

If intentional though, adviser should report to their MLRO as failure to report suspicion could lead to sanctions, fine or custody themselves.