Unit 2 - Topic 19/20 Flashcards
Sandra, a financial adviser, hopes to extend his client bank by making unsolicited telephone calls to a list of people he has taken from the telephone directory. As he is aware of the FCA rules, he will only be making contact:
Between 9am and 9pm Monday to Saturday
Which of the following criteria is NOT one that must be satisfied by an advertisement in order to comply with the FCA’s guidelines on advertising?
The advert must be authorised by the FCA
What is the minimum period for which customer records, in respect of pension transfer and opt out contracts must be kept?
Indefinitely
A key function of a client agreement is to set out:
The right and obligations of the firm and client and disclose charges
A restricted adviser is one who:
Does not meet the requirements to be independent
Under the ‘know your customer’ requirements, advisers should:
Provide the highest level of advice and duty of care to clients categorised as retail customers
When an adviser transacts designated investment business for a client. the basis or amount of the charges would normally be disclosed in which document?
The client agreement
Which compliance health warning MUST appear on all advertising material containing details of past investment performance? Past performance:
Is not necessarily a guide to future performance
From 2018, a Key Information Document (KID) will be required for all these products except:
Personal pension plan
If a client intends to purchase an investment product from an adviser on an execution only basis, then:
No recommendation will be required
Under the FCA client categories, which of the following is least likely to be categorised as being an eligible counterparty?
An institutional investor
To meet the FCA definition of independent advise, recommendations must be based on:
A comprehensive and fair analysis of the relevant market
What is the latest date, if any, that the suitability letter can be sent to a customer who is considering investing in a personal pension plan?
No later than 14 days after the contract is concluded
When carrying out a sale on an ‘execution-only’ basis, the responsibility for the transaction rests with the:
Customer
Terry invested £1,000 in a unit linked lump sum product and called seven days later and received back £950. What did this reduction most likely represent?
Reduction in market value
Fact Find information for firms covered by MiFID must be kept for how long?
Five years
Which of these best fits the description of a professional customer?
An authorised investment firm seeking advice and recommendation from a financial adviser
What does an execution only transaction require an adviser to do?
To ensure that the client signs to confirm it is an execution only transaction
For which of these customers is a specific client agreement least likely to be given to a client?
Bob who is looking for a repayment mortgage
Which of the following will not be included in an initial disclosure document?
Product recommendations
The ‘cooling-off’ period usually stars from the date:
The contract begins
How long should most customer records be kept in relation to pension contracts?
5 years
A £12,000 unit linked single premium investment bond is cancelled by a customer within the cooling-off period. However, during this period, the stock market fell sharply. Consequently, do di the value of the bond. What is the customer likely to receive?
£12,000 less a market adjustment, if specified in the contract
An adviser must issue a key feature document or a key information document prior to a sale being concluded, for all of the following products except:
Gilt edged securities
