1
Q
- Under the terms of the Financial Conduct Authority Handbook, which category of client may be referred to as a per se eligible counterparty?
A. An institutional investor.
B. A government of a country.
C. A large public limited company.
D. A local authority.
A
B
2
Q
- Several financial transactions have taken place as follows
i) Direct life office Internet Retail Term assurance
ii) Independent In person Professional Whole of life
iii) Single tied Direct offer Retail Stocks and shares ISA
iv) Multi tied Postal Retail Savings endowment
v) Direct life office Internet Professional Income protection insurance
For which of the transactions is a client agreement required?
A. ii and iv only.
B. iii and v only.
C. i, ii and iv only.
D. i, ii, iii, iv and v.
A
A
3
Q
- An authorised firm arranged the following products for retail clients on the 1 January
i) A stakeholder personal pension
ii) A cash ISA
iii) A level term assurance policy
iv) An Enterprise Investment Scheme
v) An open-ended investment company (OEIC) product
Which of these products would still be within their cancellation period on the 28 January?
A. i only.
B. i and iii only.
C. i, iv and v only.
D. ii, iii, iv and v only.
A
B
4
Q
- A financial adviser recommends that a retail client makes a top-up contribution to an existing annual premium personal pension policy and also makes payments into an open-ended investment company (OEIC) and a unit trust. When preparing a suitability report, the financial adviser must give his reasons for recommending the
A. top-up contribution only.
B. top-up contribution and the OEIC only.
C. OEIC and the unit trust only.
D. top-up contribution, the OEIC and the unit trust.
A
C
5
Q
- Matt and Julia, both aged 19, have existing Help to Buy ISAs that commenced in 2018. What
maximum amount of contributions may be invested, in total for Matt and Julia, each year, in their
Help to Buy ISAs?
A. £2,400
B. £3,400
C. £4,800
D. £6,800
A
C
6
Q
- Martin is an independent financial adviser. In the course of dealing with his clients he (Tick all that apply)
A. is not required to offer a fee charging option.
B. always acts as an agent for his clients.
C. may not refer clients to professional connections.
D. may undertake pension transfer business if suitably qualified.
A
B, D
7
Q
- Who may be categorised as a per se professional client? (Tick all that apply)
A. A firm authorised by the Financial Conduct Authority.
B. A mortgage applicant in the UK.
C. A credit institution.
D. A small limited company with a turnover of £10,000.
A
A, C
8
Q
- When a firm of independent financial advisors makes a recommendation and completes a financial transaction for a client, in respect of the firm’s fiduciary relationship with the client, the firm should be aware that (tick all that apply)
A. it acts as an agent for the client only.
B. its relationship stops if the client declines a recommendation.
C. its relationship continues during all stages of the transaction.
D. the responsibilities of the relationship are greater for a professional client than a retail client.
A
A, C
9
Q
- When an authorised firm is dealing with execution-only and limited advice transactions, the firm should be aware that the ( tick all that apply)
A. client can request to proceed on a limited advice basis.
B. know your customer requirements only apply to limited advice transactions.
C. firm is required to assess the appropriateness of limited advice transactions only.
D. complaint-handling rules in relation to the Financial Ombudsman Service only apply to limited advice transactions.
A
A, B, D
10
Q
- When considering client cancellation rights, an authorised firm should be aware that
A. if cancellation rights are not issued when required, a client may cancel at any future point.
B. for pension transfers, the firm may issue a pre-sale right to withdraw as an alternative.
C. the firm must always accept a notice to cancel an annuity, even if the annuitant is deceased.
D. the firm must maintain records of cancellation notices for personal pensions for a maximum of 3
years only.
A
A, B
11
Q
- In connection with suitability reports, an authorised firm should be aware that
A. they are always required for friendly society plans.
B. for a flexi-access drawdown pension plan, risk factors must be clearly stated.
C. they are required if a client commences income withdrawal from a flexi-access drawdown pension plan.
D. they are required for execution-only transactions.
A
B, C
12
Q
- When considering a client’s circumstances, a financial adviser becomes aware of a material change.
At what point should he usually take account of the change?
A. Within 30 days of the change.
B. Only at the next annual review.
C. When the change affects the current or previous recommendations made.
D. When the change affects the current or future needs.
E. On the specific plan anniversary for those products that are affected.
A
C, D
13
Q
- When making referrals to a professional connection, an authorised firm should be aware that
A. referrals may be made to only one specialist firm in each area of expertise.
B. client permission is always required.
C. if referrals are made to another authorised firm, responsibility for the client advice must be clearly agreed.
D. a solicitor to whom a client is referred must also be authorised to give advice on investment
business.
E. a fee-sharing agreement is always required.
A
B, C
