CII pp1

100問 • 1年前

ユーザ名非公開

通報

問題一覧

1. A bank has its own portfolio management team. This would indicate that it

D. provides a discretionary management service.

2. How are UK gilts issued and traded?

D. New gilts are issued by the Debt Management Office and subsequent trading is done on the London Stock Exchange.

3. Public companies usually raise long-term capital by issuing

D. bonds and shares.

4. The rate of inflation has been steadily increasing in the UK over the last year. In an effort to control this position, the Bank of England has increased the Bank Rate by 0.5% and the Government have just announced a 2% increase to the basic rate of Income Tax. These actions are examples of changes in

C. monetary and fiscal policy respectively.

5. Samuel met his financial adviser Charlotte to discuss his financial needs and concerns. Samuel refused to provide details of his income. How should Charlotte react?

C. Record that Samuel refused to provide this detail on the fact-find.

6. Albert, a widower aged 66, is reviewing his financial needs and priorities with his financial adviser. If his attention is particularly being drawn to tax planning issues, this would most likely be because he has

D. total assets in excess of £1,100,000.

7. Matthew’s financial adviser is considering recommending loan consolidation as a way of managing his debt situation and is satisfied with the affordability of the proposed arrangements. However, this may NOT help Matthew because he has

A. demonstrated a consistent history of overspending and taking credit.

8. A financial adviser is conducting an analysis of the likely impact of the receipt of State benefits on the amount of insurance cover thought necessary for his client. This will be particularly useful before recommending

A. an income protection insurance policy.

9. An insurance policy which includes accident and sickness cover would most likely be used in connection with which particular financial need?

B. House purchase.

10. Andrew, aged 27, is employed and Samantha, his wife, aged 26, is self-employed. They have just had their first child and are deciding who should stop work to look after the baby. They should be aware that

B. Andrew may qualify for Statutory Paternity Pay for up to 2 weeks.

11. Paul, aged 38, wishes to save £1,500 per month to build up a lump sum towards a special holiday for his 40th birthday. He is considering investing in either a cash ISA or a stocks and shares ISA and seeks advice on the best option. He should be aware that

B. he may transfer funds between the two forms of an ISA if he wishes to do so.

12. Adam is married with three young children and following a financial review the need for additional life assurance was identified with the proceeds going to someone outside of his family. This was justified because he is

C. one of three business partners.

13. The life cover protection need for Ivor, aged 28, is of a reducing nature, tailing off by age 40. However, a decreasing term assurance was not considered to be suitable. What other product is likely to best address this need?

B. Family income benefit assurance.

14. Keith is considering using the conversion option under his convertible term assurance policy and can easily afford to increase his premiums. What factor is most likely to influence his choice of the two main options typically available under this facility?

C. The duration of cover required.

15. William required £100,000 of stand-alone level critical illness cover, but was quoted a prohibitively expensive first year premium. How was he able to immediately reduce the premium whilst maintaining the same cover?

C. He elected for a reviewable premium basis.

16. James, aged 64, is planning to retire at age 65 and has a large retirement fund. Despite having considerable cash deposits the most likely reason for him to take his pension commencement lump sum is that

D. it is tax efficient to do so.

17. Insurers impose an upper limit on the level of benefit payable under an income protection insurance policy because of

D. potential moral hazard.

18. Damian and Collette have been business partners for over 20 years and are reviewing their finances with Jack, their financial adviser. They are keen to mitigate against the risk of being personally responsible for any debts of the business and therefore Jack has advised them to consider

A. becoming a limited liability partnership.

19. Karen and Julia both have leases within the same building. They both wish to exercise the right to purchase the freehold of the building. Why can only Karen exercise this right?

A. Julia has a commercial lease.

20. Customer X is in liquidation and customer Y is in administration. This confirms that

B. customer X and customer Y are both companies.

21. Alfred died intestate aged 88 leaving a spouse and one sister. If his estate is valued at £500,000, how will it be distributed?

A. It will all go to his spouse.

22. Peter applied to an insurer for a term assurance policy on his own life. The insurer was prepared to accept the risk subject to an increased premium as a result of the medical underwriting process. Peter agreed to the revised terms and submitted a direct debit from which premiums would be collected. Which statement regarding the requirements for establishing the contract is true?

D. The revised terms offered by the insurer represent a counter offer.

23. Claire and Charles are the ordinary unsecured creditors of a debtor in bankruptcy. They are respectively owed £1,000 and £2,000. If after all else is settled, £2,400 remains for their total combined settlement, they will respectively receive

C. £800 and £1,600.

24. Shirley and Grant are trustees of separate trusts, but Shirley’s duties are much more straightforward than Grant’s. This is most likely to be because

B. they are trustees of an absolute trust and a discretionary trust respectively.

25. Sam, aged 12, has accidentally entered into an online contract whilst using the family computer. What is the legal position regarding this contract?

C. It is not enforceable as Sam does not have the capacity to contract.

26. William and George are creating a trust. William is certain who his beneficiaries should be, but George is NOT. Which type of trust(s) should William and George each create?

D. William should create an absolute trust and George should create a discretionary trust.

27. Tom and Bobby both run their own businesses but only Tom is personally liable for the debt of his business. This is because

A. Tom is self-employed and Bobby is a company director.

28. David has taken out a critical illness policy. Subsequently a claim he made was rejected due to non-disclosure of material facts. This is most likely to be because

A. he deliberately withheld information.

29. The Competition and Markets Authority (CMA) has submitted a report to HM Treasury following an investigation into retail investment products. If the report requires remedial action to be taken, the most likely immediate outcome will be the

D. HM Treasury will provide direction to the Prudential Regulation Authority and the Financial Conduct Authority.

30. A client has previously written to her former adviser opting out of any marketing activities from the firm or any third parties. However, she continues to receive direct investment offers from the firm. She should complain based on the firm NOT complying with which set of regulations?

C. Data protection legislation.

31. The Financial Services and Markets Act 2000 regulates the provision of which type(s) of financial advice?

B. Advice to all individuals.

32. The directors of an authorised firm have formally appointed an external compliance support company. Why does the authorised firm retain responsibility for its compliance with Financial Conduct Authority rules?

A. The authorised firm is not allowed to delegate their regulatory responsibilities.

33. The implementation of financial regulation across EU Member States is carried out under which overarching programme?

A. Financial Services Action Plan.

34. Which individual or organisation is directly responsible for overseeing the activities of the Financial Conduct Authority?

B. HM Treasury.

35. Which body, set up by the Financial Services and Markets Act 2000, ensures that the investigation and recommendation functions of the Financial Conduct Authority are carried out separately from the determining of any action and issuing of statutory notices?

C. Regulatory Decisions Committee.

36. Gilbert, a financial adviser, has arranged a new investment bond for his client. According to the Conduct of Business Rules, what should Gilbert do on receipt of the policy document?

D. Send out the document to his client as soon as is practically possible.

37. An authorised firm has successfully appealed to the Financial Conduct Authority’s (FCA’s) Upper Tribunal. A possible consequence of this would be

A. additional regulated activity authorisation being granted.

38. Carl, an independent financial adviser, has committed a market abuse offence. He has been fined and as a consequence

C. it may affect his future employment prospects.

39. Jon and Carol are both employed by an authorised firm. The firm’s record-keeping requirements for Jon’s responsibilities are greater than for Carol’s. This is because

A. Jon is a senior manager and Carol is a customer adviser.

40. Keith is a financial adviser for firm X, which is an appointed representative of firm Y. Keith recently arranged a life policy for a client and the paperwork was checked by his supervisor, Mark. Who is deemed to be the principal in relation to this business?

D. Firm Y.

41. An authorised firm of financial advisers holds a client money bank account. The directors of the firm should be aware that

A. an annual client money audit and an annual report is required.

42. Ian and Paula were both financial advisers and were both subject to disciplinary sanctions. As a result, only Ian’s offence warranted criminal prosecution because

A. Ian breached a prohibition order whereas Paula failed to properly deal with a complaint.

43. Freddie is being prosecuted for market abuse. If he is found guilty of a criminal offence, what is the maximum penalty that can be imposed on him?

D. An unlimited fine or a 7-year prison term.

44. Sharon was arranging personal pension plans for her clients, leading them to believe they would be adequate for their retirement needs. A subsequent complaint has indicated that she has failed to meet the requirements of the principles of the fair treatment of customers because she

A. created unrealistic client expectations.

45. Tom is currently an adviser in an authorised firm. He is about to be promoted to undertake a senior manager’s role. This means that he

B. will still be allowed to advise clients.

46. An individual is acting in accordance with the Financial Services and Markets Act 2000, despite NOT being directly authorised by the Financial Conduct Authority. This is because they are

D. an appointed representative.

47. Rachel works in the treasury department of a local authority. How is this activity viewed under the Financial Services and Markets Act 2000?

D. Neither Rachel nor the local authority must be authorised.

48. In what circumstances, if any, must the Financial Conduct Authority notify an adviser of a change in the scope of an ongoing investigation into his conduct?

B. If absence of notification may prejudice the adviser.

49. Caroline and Anne are both financial advisers but only Caroline is a senior manager. In accordance with the regulations, this means that

A. the requirement for Caroline to exercise due skill, care and diligence is broader.

50. The Financial Conduct Authority (FCA) is able to take action against an individual who is a manager performing a senior management role but is NOT authorised to give investment advice because of

B. the fact that he is regulated by the FCA and must adhere to their rules.

51. An authorised firm is moving offices and during the move discovers a file relating to a pension transfer made in 2014 for a former client. What must the firm do with this record?

D. Retain it indefinitely.

52. Stuart, an employee of an investment management company, is subject to an ongoing Fit and Proper test specifically because he

B. is a senior manager.

53. The Government seeks to meet its responsibilities under the UK Strategy for Financial Wellbeing by

A. bringing together organisations and interested parties to improve the nation’s knowledge and understanding of personal finance.

54. As a result of a recent investigation, the Practitioner Panel has made a recommendation to the Financial Conduct Authority (FCA). Therefore, the FCA must

B. consider the recommendation without any obligation to amend its rules.

55. An authorised firm’s senior management functions must

C. be reviewed regularly by the firm.

56. The Financial Capability Strategy for the UK is using a programme in schools which is designed to

A. embed a basic understanding of financial matters in young people.

57. Alan and Colin both work for a life office. Alan is a senior discretionary investment manager and Colin is a junior member of the compliance department. A key regulatory difference between them is that

B. only Alan is carrying out a senior management role.

58. Firm A has been fined £100,000 by the Prudential Regulation Authority for insider dealing. Firm B has been fined £1,000,000 for market abuse. This indicates that

C. neither firm have received the maximum fine.

59. An authorised firm disagrees with the enforcement action taken by the Financial Conduct Authority. To which body would it appeal?

A. The Upper Tribunal.

60. An authorised firm has discovered that they have breached one of the Financial Conduct Authority’s (FCA’s) Principles for Businesses. What action must the firm take?

B. The firm’s compliance officer must notify the FCA immediately and implement remedial actions as soon as possible.

61. Under the Financial Conduct Authority’s Consumer Duty rules, the Consumer Principle states that a firm must

B. act to deliver good outcomes for retail clients.

62. When Lionel and Yvonne’s bank was declared insolvent in May 2023, Lionel had £60,000 on deposit and Yvonne had investments worth £60,000 with the bank. How much in total would they be entitled to receive under the Financial Services Compensation Scheme?

D. £120,000

63. David sent a letter of complaint to an authorised firm of independent financial advisers on 2 March, which was received on 4 March. The firm acknowledged receipt of the complaint on 7 March. On 1 April a holding response was sent to David to update him on progress of the complaint. What is the latest date on which the firm must provide David with its final decision and right to refer the complaint to the Financial Ombudsman Service?

C. 29 April.

64. A client referred his complaint about the investment advice received from his adviser to the Financial Ombudsman Service (FOS) in January 2023. The FOS has ruled that the advice was unsuitable and has recommended an award of £125,000 plus £2,500 costs. How much is the maximum amount of compensation that the adviser firm will be obliged to pay?

D. £127,500

65. Jonas is an independent mortgage and financial adviser. He has NOT passed long-term care or equity release examinations to enable him to transact business in those areas. Which of the following transactions will Jonas be able to undertake? i) A new term assurance with critical illness cover ii) A remortgage for a 40 year-old applicant iii) An immediate needs annuity iv) A home reversion plan v) A compulsory purchase annuity for a 65-year-old applicant

B. i, ii and v only.

66. An authorised firm recommends a discretionary model portfolio service within a range of collective funds. This model portfolio services is specifically designed around the firm’s approach to investment and risk. Under the Financial Conduct Authority’s Consumer Duty rules, the authorised firm is categorised as a

A. co-manufacturer and distributor only.

67. Diane and Martin have two children, aged 16 and 18. The entire family intend to open their first ISA accounts and invest the maximum available amounts. They only wish to consider stocks and shares ISAs and NOT any other form of ISAs. What is the total amount they would be allowed to invest in the tax year 2023/2024?

C. £60,000

68. From the table, which of these organisations are per se eligible counterparties? i) A government of an EU member state. ii) A central bank in an EU member state. iii) A credit institution. iv) A UK pension fund.

D. i, ii, iii and iv.

69. Various parties to a discretionary trust are set out in the table below. David - Trustee Simon - Sole-named beneficiary Amanda - Beneficiary’s spouse A fiduciary duty exists between

B. David and Simon only.

70. In which of the following situations is a referral to another adviser appropriate? 1) A restricted adviser who does not have a suitable product in his company’s range refers to a restricted adviser within another firm. 2) A restricted adviser who does not have a suitable product in his company’s range refers to an independent financial adviser. 3) A restricted adviser who knows a similar product can be obtained cheaper from another provider refers to an adviser of that firm. 4) An independent financial adviser is not deemed competent to provide pension transfer advice refers to another independent financial adviser who is suitably qualified and holds the appropriate Financial Conduct Authority permissions.

B. ii and iv only.

71. An authorised firm has arranged the following products on 1 June. All products were based on recommendations made to retail clients on a face to face basis. For all products arranged the clients received cancellation notices on the same date. 1) A cash ISA 2) A level term assurance 3) An Enterprise Investment Scheme 4) A personal pension plan 5) A Junior ISA Which of the products is still within its cancellation period on 25 June?

B. ii and iv only.

72. During the course of the fact-finding process, a financial adviser decided to ask a number of open-ended questions. The primary purpose of this approach was to

B. obtain the client’s views and opinions.

73. Susan and Nicola both have lump sums to invest and both intend to use life office managed funds. Why are the opportunities for Susan to benefit from diversification more limited than Nicola’s?

A. Susan has decided to adopt a socially responsible approach to investment.

74. Following the completion of a fact-find, a financial adviser has recommended a unit trust and an investment bond to a retail client. In addition, the client has requested a personal pension be arranged on an execution-only basis. The disadvantages of which product(s) must be included within the suitability report?

B. Unit trust and investment bond only.

75. In considering a number of pension products, Jenny’s adviser has pointed out that the reduction in yield figures are important in helping her understand the

B. impact of charges.

76. Julian, a financial adviser, has been praised for the quality of his recent professional conduct. This would most likely indicate that he has

B. acted with appropriate integrity.

77. How should an authorised firm react in the event of a conflict of interest arising from a couple’s divorce where both parties are clients of the firm?

C. By seeking to maintain strict neutrality.

78. An investment provider has announced new charges for switching between its funds. If these charges are likely to be deemed excessive, this would

A. be regarded as a breach of the financial regulators’ Principles for Businesses.

79. In order to adhere to the Financial Prudence principle of the Financial Conduct Authority’s Principles for Businesses, an authorised firm should

C. have adequate financial resources to meet its obligations.

80. To what degree, if any, must an authorised firm adhere to the Financial Conduct Authority’s Principles for Businesses?

A. They must adhere to them but they have discretion as to how they comply with their obligations.

81. The compliance officer of an authorised firm has discovered that one of the firm’s senior managers has been declared bankrupt. What action must the authorised firm take?

D. Notify the Financial Conduct Authority immediately.

82. An individual has applied to an authorised firm for the role of compliance manager. In accordance with the Financial Conduct Authority’s (FCA’s) fit and proper requirements, how will she be treated as a result of a previous conviction for dangerous driving seven years ago?

B. The FCA will only consider the issue if it relates to the ability to carry out her role.

83. William, an independent financial adviser, is advising Emily, a self-employed designer. Emily has an income protection insurance policy which has a maximum benefit level of £30,000 per annum, but her earnings have recently fallen to £25,000 per annum. Considering only the Financial Conduct Authority’s Statements of Principle and ethical standards, what should William do, if anything?

B. Inform Emily that she may be paying for cover on which she cannot claim.

84. Belinda, a financial adviser, is advising Harriet, a homemaker. Harriet is paying £500 per month into her personal pension, although she has no earnings for the last three years. Considering only ethical requirements, what should Belinda do, if anything?

B. Recommend that Harriet reduces her current contribution level as it appears to exceed her income level.

85. In reviewing its management information, an authorised firm has identified a high number of pure protection policies being cancelled immediately after the end of the commission earnings period. What kind of behaviour is this likely to indicate?

A. Unethical behaviour by advisers through churning of policies.

86. According to the Financial Conduct Authority’s High Level Standards, an individual holding a senior manager role in an authorised firm must

D. uphold the highest personal and professional standards at all times.

87. How may an authorised firm demonstrate that they have successfully considered ethical outcomes?

A. High persistency levels.

88. Barry and Caroline are restricted advisers and Paul is an independent financial adviser. In respect of their current authorisations, they should each be aware that

B. Caroline can be tied to different providers for different products., C. Barry and Caroline can both introduce clients to Paul.

89. Which roles within authorised firms would automatically be senior management functions?

A. Compliance manager., D. Money Laundering Reporting Officer.

90. Simon has experience of dealing with retail clients and is now training to be able to give advice on pension transfers. As a consequence, Simon should be aware that

B. his firm is allowed to impose a time limit on completion of the qualification., D. all records of his training and CPD must be maintained indefinitely.

91. Which of the following constitute ‘close links’ for the purposes of Threshold Conditions (COND), where party X is seeking authorisation and Y is the other party?

A. Y is a parent undertaking of X., D. Y owns or controls 20% or more of the voting rights or capital of X.

92. Several clients held long-term deposits and investment contracts with a UK bank that became insolvent and ceased trading due to insolvency in June 2023. Under the terms of the Financial Services Compensation Scheme (FSCS), which clients will be fully reimbursed by the FSCS to cover their losses?

B. Moira, who has a stocks and shares ISA investment of £80,000., C. Paolo and Kyla, who jointly hold £150,000 in their savings account., D. Lola, who has an onshore investment bond with a surrender value of £60,000.

93. When considering the preparation of client suitability reports in accordance with the Financial Conduct Authority’s rules, a financial adviser should be aware that

A. suitability should be the consequence of proper adherence to the know your customer rule., B. when arranging a regulated mortgage contract, a suitability report is not required.

94. Firms X and Y are both authorised firms providing financial advice. Firm X is paid by commission only, firm Y is paid by fee only. When comparing their disclosure obligations to retail customers, the firms should be aware that

A. both firms must disclose details of what they can expect to receive., B. both firms must confirm their regulatory status.

95. Fiona, a financial adviser, is reviewing her client’s circumstances. When looking into the client’s current assets, Fiona should be aware that

B. the amount of accessible funds held on deposit will impact on investment decisions., D. the consequences of any recommendation to surrender a long-term contract must be explained.

96. An authorised firm transacts business with a new professional client on 1 February. In respect of the firm’s client agreement between the two parties

C. the agreement must include details of the firm’s complaints procedures., D. the agreement must be retained indefinitely where pensions transfer business is conducted.

97. When considering cancellation rights in respect of regulated products

A. notice can be served other than by post, so long as the provider has stated the alternative method is acceptable., B. sending a notice one day before the deadline is acceptable even if it is not received until after the deadline., E. the duration for which cancellation records must be retained varies according to the product involved.

98. A financial adviser is working in collaboration with a client’s accountant and solicitor in respect of the client’s divorce. In relation to the financial advice provided, the financial adviser should be aware that

B. the financial adviser can give generic information in relation to taxation issues., D. the financial adviser is solely responsible for the financial advice given.

99. A financial adviser in an authorised firm is discussing areas of advice with a client for which he is authorised but does NOT feel confident and lacks experience in this area. What should he do?

A. Suggest a joint meeting with another adviser within the firm who has greater experience., D. Rearrange the meeting to such time that he has researched the areas to gain greater knowledge.

100

100. When considering client categorisation according to the rules stated in the Conduct of Business Sourcebook, a financial adviser should be aware that

A. a professional client can choose to become an elective eligible counterparty., B. a UK pension fund may be categorised as a per se eligible counterparty., C. all clients who are neither professional clients nor eligible counterparties are categorised as retail clients.

R01 - PP1

R01 - PP1

R01 - pp2

R01 - pp2

R01 - pp3

R01 - pp3

Real Revision

Real Revision