Wrong answers - Practice

Question 1

Mortgage broker Ray arranges a home mortgage for Mary and Doug at a $500 discount on the strict condition that they purchase their mortgage insurance from Acme Mortgage Insurers. Acme pays Ray $1,000 commission when Mary and Doug purchase mortgage insurance.

Answer 1

Third line forcing

Question 2

What are the two (2) primary aims of the conflicted remuneration provisions? That is, what do they achieve for the community?

Answer 2

1. to more closely align the interests of those who provide advice with the interests of their clients, and
2. to improve the quality of advice these clients receive

Question 3

What is an potential issue with wholesale client with FASEA code

Answer 3

• Classifying a client as a wholesale client per the letter of the law, who lacks competence in financial matters

Question 4

Rachel contacts Robert, her financial planner, for information and advice about salary sacrifice into superannuation.
Scenario 1 – Statement made by Robert to his client Rachel
“If you are on the highest marginal rate of income tax, salary sacrifice would allow you to reduce your annual income tax by about 15%
Is this statement? - Factual, General, Personal

Answer 4

General advice

Question 5

You are reviewing an existing client couple who are both in receipt of the full Age Pension. As you are updating their income details when you realise that they have not been declaring to Centrelink an additional amount of income they now earn and, as a result, they have both receiving pension over-payments from Centrelink for almost a year. What should you do?

1. Inform your clients of the need to declare income and change of circumstances to Centrelink, and strongly recommend they contact Centrelink immediately
2. Make a report to AUSTRAC in the form of a Suspicious Matter Report (SMR)
3. Complete an online Suspected Fraud report to Centrelink / Services Australia
4. Either 2) or 3) above

Answer 5

4

Question 6

Sam successfully completes the adviser exam and is authorised by ACME licensee. Sam now commences the 3rd quarter of his professional year. Under the standard terms of the work program he is now under the limited and indirect supervision of Anne.
Sam sees his first client alone. He conducts the interviews, analyses the information; bases his advice on the client’s relevant circumstances; prepares his SoA and clearly explains the advice to the client, all without Anne’s presence or interference. The financial product advice is implemented in full. Later, the client complains about the recommended product.
Question A
Who is responsible for the SoA and the advice it contains?
1. Sam the provisional relevant provider (who is now authorised)
2. Anne the nominated supervisor
3. ACME the licensee
4. All of the above

Answer 6

2. Anne - the nominated supervisor