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FASEA > Tutorial 3 > Flashcards

Tutorial 3 Flashcards

1
Q

Who must get a SOA

A

Retail clients receiving personal advice

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2
Q

What are the three key documents a retail client may get and when should they get them

A

FSG - when client wants a financial service
SOA - when receiving personal advice
PDS - when buying a financial product

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3
Q

Providing entities and advice providers have different obligations. What are they?

A

Providing Entities - Disclosure obligations - e.g. FSG, SOA, PDS

Advice providers - Conduct Obligations - best interest

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4
Q

Who is the providing entity? Who is not an providing entitee

A

AFSL licensee or AR, not employees

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5
Q

Who is the advice provider

A

The person providing the advice. Or if not provided by a person, the AFSL.

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6
Q

What is a Statement of Advice?

A

A document that helps the retail client understand the personal advice and decide whether to rely on it.

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7
Q

What is the purpose of the Statement of Advice?

A

communicate important info

make informed decision.

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8
Q

What nine elements must be in an SOA

A
  1. Title -Statement of Advice
  2. Name and contact details of providing entity
  3. Details of AFSL - number, name, contact details and statement that providing entity is AR.
  4. Statement setting out advice
  5. Info about the basis on which advice was given - e.g. subject matter, scope, circumstances..
  6. renumeration, commissions and other benefits that may influence the advice.
  7. renumeration that another person is to receive for referring to an afsl.
  8. details on any interests, associations or relationships that may affect the advice.
  9. 961H warning if needed (general advice)
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9
Q

What level of detail is required for an SOA

A

The level of detail for a reasonable person to make a decision about the advice. (as retail client)

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10
Q

What type of penalty is a defective SOA

A

Strict Liability

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11
Q

What makes an SOA defective

A
  1. False or misleading statement

2. Omits info required by Corps act or regulations

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12
Q

Can you combine FSG, PDS and SOA

A

No

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13
Q

When must the SOA be provided to client (timing)

A

When personal advice - at same time or as soon as practical. In any event, before another financial service is provided that arises out of advice.

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14
Q

Who can’t receive referral fees?

A

Relevant provider.

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15
Q

What 2 conditions must be met for delayed SOA provision in time critical cases.

A
  1. The client expresly instructs that the further financial service beeds to be provided immediately or by a specified time.
  2. It is not reasonably practical to provide advice by that time.
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16
Q

If a SOA is defective the affected person may take ..

A

civil action

17
Q

RG175.165 requires that an SOA must be provided (in time critical)

A

As soon as practical after further financial service - at the latest 5 days.

18
Q

What are the 4 circumstances that an SOA in not required.

A
  1. The client is not a retail client
  2. Relates to a basic deposit (banking) product
  3. Relates to home and contents insurance or motor vehicle insurance
  4. Where the advice is ongoing advice and a RoA is prepared
19
Q

SOA not required under further advice (3)

A
  1. SOA already provided - setting out client’s relevant circumstances
  2. Client’s relevant circumstances are not significantly different.
  3. The basis for advice is not significantly different.
20
Q

Good disclosure principles referred to in RG 175.179 should be .

A
  1. Timely
  2. Relevant & complete
  3. Promote product understanding
  4. Promote product comparison
  5. Highlight important information
  6. Have regard to consumer needs
21
Q

What is a back office payment. Is it likely to affect advice?

A

A back office payment is a payment for services provided to a product issuer, such as claims-handling servicesand other administrative services that would otherwise be performed by the issuer itself.
Yes

22
Q

Can an ROA be a recording?

A

Yes

23
Q

Is moving from cash to product considered a switch?

A

Yes.

24
Q

To be a strict liability - you must know that the disclosure document is defective? True or False

A

False - it’s knowingly or unknowingly.

25
Q

Do you need to disclose if your APL is restricted

A

Yes

26
Q

Who needs to provide PDS when general advice is given - product provider, advice provider or both

A

Just product adviser.

FASEA (13 decks)

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