Friday Five Focus on Regulation – 29 September – 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 2023/24, examinable by the CII until 31 August 2024.

1. Which of these offers the best definition of financial advice?
   1. When a professional adviser assesses a client’s personal circumstances and recommends financial products that are suitable for them.
   2. Where written recommendations are given based on a client’s shortfalls.
   3. All verbal discussions between an adviser and a client within the context of a meeting.
   4. Anyone offering generic information on the subject of financial services.

2. What must a firm establish before it can appoint someone as an appointed representative (AR)? (Tick all that apply.)
   1. That the appointment won’t prevent the firm from satisfying threshold conditions.
   2. That the firm has adequate controls over the person’s regulated activity.
   3. The AR is already, and will continue to be, an authorised person.
   4. The AR will act solely by making introductions and distributing advertisements.

3. How do the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) work together in considering fairness of standard terms in financial services contracts?
   1. The FCA refers all matters to the CMA.
   2. The CMA refers all unfair terms within the financial services sector to the FCA.
   3. If the FCA considers the CMA better placed to deal with a matter, they will pass the case on.
   4. The CMA investigates unfair terms and the FCA rectifies them.

4. For a professional client, a client agreement must be provided
   1. before the start of conducting business.
   2. within a reasonable period of the start of conducting business.
   3. only at the adviser’s discretion.
   4. within 10 business days of the start of conducting business.

5. Why would a client who has a history of small regular savings arouse suspicion if he proposed a substantial investment to his adviser?
   1. It might indicate missed opportunities within the client’s fact-find.
   2. It might affect the client’s existing estate planning recommendations.
   3. The behaviour is inconsistent with the adviser’s previous knowledge of the client.
   4. It might imbalance or jeopardise the client’s overall portfolio.

Answers

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

2. AB – See R01 Study Text, Chp 7
   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 11
   Grab our taster mock exam paper for CII CF1 Click here to download.

5. C – See CF1 Study Text, Chp 12
   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.