Unit 1 Topic 14&15 Flashcards
Which of the following ought to be a priority consideration when assessing the needs of retired couples? A Pensions planning B Protection advice C Inheritance Tax planning D Mortgage advice
C Inheritance Tax planning
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
