Friday Five Focus on Regulation – 16 July – 5 Questions in 5 Minutes

Friday Five Focus on Regulation – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Regulation; this is useful as you prepare for either of the CII’s R01 or CF1 exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT! These questions relate to examinable tax year 2020/21, examinable by the CII until 31 August 2021. They do not relate to tax year 2021/22 which is only examinable by the CII from 1 September 2021.

1. If a firm passes mortgage leads to an authorised person for a fee, does that firm require FCA authorisation?
   1. No authorisation is required as the introducer is not advising the client.
   2. Yes, if they receive payment for leads, they must have FCA authorisation.
   3. Yes, the principle at the introducing firm must hold FCA authorisation.
   4. No, as long as the introducer is paid for leads no authorisation is required.

2. When recommending a product, it is important that its suitability is discussed. Each of the following would normally be discussed at this stage, with the exception of:
   1. the remuneration for the adviser.
   2. the term of the product.
   3. affordability.
   4. the tax treatment and investment risk of the product.

3. As a financial adviser, under which of the following would it NOT be a requirement to disclose your status?
   1. E-mail
   2. Fax
   3. Text message
   4. Letter

4. Redress can be awarded by the Financial Ombudsman Service in two ways; these are a money award and a:
   1. decision award.
   2. directions award.
   3. claim award.
   4. reason award.

5. Which of the following statements regarding ‘best execution’ and ‘execution-only’ is true?
   1. Best execution typically applies to firms dealing in cash and bonds.
   2. A suitability report would only be produced for execution-only.
   3. Both execution-only and best execution require the completion of a fact-find.
   4. A fact-find would not be relevant for execution-only.

Answers

1. A – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R01 Study Text, Chp 9
   Grab our taster mock exam paper for CII R01. Click here to download.

3. C – See R01 Study Text, Chp 6
   Grab our taster mock exam paper for CII R01. Click here to download.

4. B – See CF1 Study Text, Chp 12
   Grab our taster mock exam paper for CII CF1 Click here to download.

5. D – See CF1 Study Text, Chp 11
   Grab our taster mock exam paper for CII CF1. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.