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

2. How are UK gilts issued and traded?

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

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

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?

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

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

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

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

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

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

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

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?

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?

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?

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

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

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

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?

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

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?

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?

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

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

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

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

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

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

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?

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

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?

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

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

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?

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?

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

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

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

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?

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

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

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?

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

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

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

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

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?

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

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

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?

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

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

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

55. An authorised firm’s senior management functions must

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

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

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

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

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?

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

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?

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?

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?

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

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

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?

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.

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

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.

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?

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

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?

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?

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

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

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?

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

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

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

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?

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?

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?

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?

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?

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

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

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

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

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

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?

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?

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

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

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

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

97. When considering cancellation rights in respect of regulated products

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

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?

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