Friday Five Focus on Regulation – 5 Questions in 5 Minutes – 16 Oct 2026

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 2026/27, examinable by the CII until 31 August 2027.

1. One of the aims behind the introduction of stakeholder products was to
   1. improve industry persistency rates.
   2. improve access to financial services for those on lower incomes.
   3. reduce commission bias.
   4. improve consumer knowledge of the financial services industry.

2. The Insurance Conduct of Business Sourcebook (ICOBS) categorises insurance products
   1. according to commission basis, i.e., nil, upfront or trail.
   2. as term assurance, whole of life and income replacement.
   3. as life and critical illness, general insurance, and income protection.
   4. as general insurance, pure protection, and payment protection insurance.

3. The Financial Conduct Authority’s regulatory principles would include
   1. consumer protection.
   2. efficiency and economy.
   3. promoting competition.
   4. protecting financial markets.

4. The Financial Conduct Authority determines the level of periodic fee to charge an authorised firm based on
   1. the length of time the firm has been authorised.
   2. a flat annual subscription based on the time in business.
   3. the product areas they have permission to advise on and the income from each.
   4. the level of risk that each firm represents based on their business model.

5. The primary purpose of a fact-find is to
   1. gather all the relevant client data to allow an adviser to make suitable recommendations.
   2. accurately record client information as it will be relied upon in the event of a complaint.
   3. assist an adviser in methodically working through the required client information.
   4. act as a prompt to ensure no area of client information is forgotten.

Answers

1. B; See R01 Study Text, Chp 8; Rationale: Stakeholder products were introduced to enable firms to provide simpler and lower-cost advice to consumers, i.e., to make advice more accessible to those on lower incomes.
2. D; See R01 Study Text, Chp 6; Rationale: The FCA’s Insurance Conduct of Business Sourcebook (ICOBS) sets out the day-to-day rules for the selling and marketing of the products it covers. It has different rules for different product types and categorises its insurance products as either general insurance, pure protection, or payment protection insurance. Term assurance, critical illness, and income protection all come under the pure protection category but are not categories themselves. Whole of life may also fall into this category; however, depending on the type of whole of life product, it may be covered under COBS rather than ICOBS i.e., if the policy pays out the surrender value of the fund (as it will not be deemed a pure protection product). Commission basis is not relevant to how the products are categorised.
3. B; See R01 Study Text, Chp 5; Rationale: The FCA has a number of regulatory principles one of which is ‘efficiency and economy’ to ensure they use their resources in the most efficient and economical way. The other 3 answers (to protect customers, protect financial markets and promote competition) are the FCA’s 3 operational objectives.
4. C; See R01 Study Text, Chp 6; Rationale: The periodic fee is the annual fee that is payable to the FCA by regulated firms. The periodic fee is not a flat fee or an annual subscription but based on amount and type of business.
   Note: It is calculated as follows: Periodic Fee = The ‘tariff-base’ (based on the income the firm receives under each of its product areas) applied to the ‘fee-block tariff rate’ (based on the product areas for which a firm has permission to advise on).
5. A; See R01 Study Text, Chp 9; Rationale: The primary purpose of the fact-find is to gather information to help the adviser understand the client and make the most suitable recommendation. A fact-find may possibly be used for the reasons outlined in answers b), c) and d); however, these are not its primary purpose.

Grab the resources you need!

R01 can feel straightforward until you see how regulation and ethics topics are tested under exam conditions. If you’d like to preview how our full R01 E-Mocks present these areas, access the free R01 E-Mocks taster to see the question style, layout and level of detail included in the complete set.

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