R01 - pp2

100問 • 1年前

ユーザ名非公開

通報

問題一覧

1. Janette owns property on a freehold basis. This means that she owns the:

A. property and the land it stands on until she dies or sells it

2. Which body sets interest rates in the UK and what is its inflation target?

C. The Monetary Policy Committee; 2% CPI

3. Which of the following statements regarding bonds is true?

D. Bonds allow companies to raise money without having to borrow from a bank

4. When the Bank of England announces it will undertake quantitative easing, a financial adviser should consider that typically:

D. The Bank of England will purchase an amount of gilts that are in circulation.

5. Jason is concerned about how he would cope financially in the event of long term sickness. Which type of insurance policy is MOST likely to satisfy this need?

D. Income protection insurance

6. A discretionary portfolio management service is where:

D. specialist investment managers make the investment decisions to meet the client’s investment objectives

7. Which of the following can be directly attributed to the impact of taxation?

B. The individual consumer’s ability to make investments

8. Which of the following statements regarding ‘structured’ and ‘unstructured’ loans is incorrect?

A. Structured loans are viewed as lower risk than unstructured.

9. 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.

10. Which of the following features is the same under both an income protection policy and a personal accident and sickness insurance policy?

A. Regular benefit is paid in the event of being unable to work due to illness or accident

11. What products are NOT within the scope of the Financial Services and Markets Act 2000 (FSMA)?

B. National Savings and Investments

12. Craig, aged 26, is employed and Julie, his wife, aged 27, 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. Craig may qualify for Statutory Paternity Pay for up to 2 weeks.

13. Michael, 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.

14. Ian and Cheryl, both aged 28, have recently arranged an interest-only mortgage on their first home which they intend to repay with the proceeds of a trust fund that Ian will receive when he attains the age of 35. To ensure that this loan is adequately protected in the event of death before the trust fund is distributed, the most suitable arrangement is likely to be:

B. A level term assurance policy on a joint-life basis for the outstanding mortgage amount.

15. How do unit trusts and investment trusts differ?

C. An investment trust is closed ended while a unit trust is open ended

16. Which of the following is accurate regarding actively and passively managed funds?

A. Passive funds aim to track the market in which they operate, and active funds aim to outperform it

17. Ryan 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.

18. As Tim’s financial adviser, once you have identified Tim’s priority demands and needs, how will you quantify these?

D. Ask the client questions about their aims, objectives and priorities.

19. How is an authorised firm affected by the Financial Conduct Authority’s fair treatment of customers’ requirements?

A. They must be evidenced in all areas of the firm.

20. Which of the following is a requirement of public limited companies?

D. That they disclose shareholdings in the company

21. An independent financial adviser within a large, authorised firm is recommending a new personal pension arrangement to her client. She is acting as:

B. Agent to the client only.

22. Colin 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. Colin 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 counteroffer.

23. Bob is in the process of applying to be a financial adviser with a UK bank. Under the certification regime, who will decide that Bob is competent and suitable for this role?

C. His employer

24. Michaela owns a property outright and in perpetuity but does NOT own the freehold. This is most likely to be because the ownership is:

A. On a commonhold basis.

25. James recently died intestate leaving a wife and 2 children both over the age of 18. How would his estate be distributed?

A. His wife takes personal chattels, assets of £270,000 plus half of any balance outright. The children get the other half.

26. Who issues a Grant of Representation?

D. The Probate Registry

27. Oliver and Sharon are creating a trust. Oliver is certain who his beneficiaries should be, but Sharon is NOT. Which type of trust(s) should they each create?

D. Oliver should create an absolute trust and Sharon should create a discretionary trust.

28. What is the Bank of England’s two core purposes?

B. Monetary stability and financial stability

29. How does the Financial Services Act 2012 directly affect the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in respect of financial stability?

C. It requires the FCA and the PRA to have an appropriate strategy, and work with the Bank of England and HM Treasury to achieve a satisfactory outcome.

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. An authorised firm is using the services of an external compliance consultancy to advise the firm on all compliance matters. In respect of this arrangement, the authorised firm should be aware that:

A. Responsibility for compliance issues ultimately rests with the senior management of the firm.

32. A ‘directive’ is a form of EU legislation. This requires Member States to implement the directive:

A. to achieve a set outcome, but how this is achieved is left to each State

33. Which of the following is a firm unable to contract out to a compliance consultant?

C. Regulatory obligations

34. If an individual applies to the regulator for direct authorisation, this is called applying for:

B. Part 4A permission.

35. Bryan has been found guilty of market abuse. What is the maximum criminal penalty for this offence?

D. An unlimited fine or 7 years’ imprisonment

36. When the FCA's Enforcement Division investigates and takes enforcement action against FCA rule breaches, it must do so in a manner consistent with which legislation?

A. Human Rights Act 1998.

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

A. additional regulated activity authorisation being granted.

38. Nigel, an independent financial adviser, has committed a market abuse offence. He has been fined and consequently

C. it may affect his future employment prospects.

39. In relation to breaches of the current Money Laundering and Terrorist Financing (Amendment) Regulations 2019, the Financial Conduct Authority (FCA) has the power to act against:

B. Any firms or individuals regardless of whether they are on the FCA register.

40. Within the FCA handbook, what does “Threshold Conditions” refer to?

A. The minimum conditions a firm must satisfy to retain permission to conduct investment business.

41. Following a breach of their rules, the Financial Conduct Authority has issued a public statement about a firm’s behaviour. The offence is most likely to have been:

D. A significant failure in financial reporting.

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

A. Becky breached a prohibition order whereas John failed to properly deal with a complaint.

43. Under the FCA's prudential rules for solo-regulated firms, how frequently does the FCA conduct periodic capital and liquidity tests for the highest risk firms?

C. Every 24 months.

44. The client asset and client money rules state that all monies received must normally be paid into the firm's client bank account within what time period:

B. 24 hours.

45. Under section 19 of the Financial Services and Markets Act 2000, it is an offence for someone to carry out a regulated activity unless they are:

A. authorised or exempt

46. 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.

47. What prompted the regulatory overhaul of liquidity requirements expected of firms in late 2009?

B. The 2007/08 credit crisis.

48. Whose professional indemnity insurance requirements are set out in MIPRU?

D. Home finance firms.

49. An authorised firm holding client money for designated investment purposes must carry out a reconciliation of client bank account records at least once:

A. Every business day.

50. Which regulator is charged with ensuring that competition between businesses is a benefit to customers and the economy as a whole?

D. Competition and Markets Authority.

51. How does the Insurance Conduct of Business Sourcebook (ICOBS) categorise insurance products?

D. General insurance, pure protection and payment protection insurance.

52. The FCA is investigating Michael, a regulated adviser, about his behaviour but he has not been notified about this. What is the offence he has committed most likely to have been?

D. Insider dealing.

53. Who carries the compliance responsibility for an appointed representative?

C. The firm’s principal

54. Following the cessation of employment, for how long must training and competence records be kept in respect of an employee engaged in retail investment mediation only under MiFID II rules?

C. Five years.

55. Which of the following would be regarded as advice?

C. Giving an opinion on the merits and suitability of a particular product.

56. Ian has just completed his first mortgage, which is being repaid on capital and interest basis. Which of the following products is least likely to be recommended by his adviser?

A. Private medical insurance.

57. An advice firm has been granted a Part 4A permission. This means that the organisation can now:

C. undertake the regulated activities applied for.

58. Why has the FCA devised rules regarding client assets and client money?

A. To minimise the risk of clients’ money being used by the firm without agreement.

59. In relation to enforcement action against an authorised firm, the main options open to the Financial Conduct Authority are:

D. Disciplinary action, civil proceedings and criminal proceedings.

60. Under which of the following circumstances must the FCA notify a person who is subject to an investigation?

C. Falsely describing themselves as authorised.

61. The FCA Complaints Commissioner performs which of the following tasks?

C. Investigates complaints made against the FCA.

62. An authorised firm has discovered that they have breached one of the 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.

63. When assessing a client's potential liability to various UK taxes, what information would be most useful?

D. Their marital status.

64. What is not one of the stages in the money laundering process?

D. Fraud – falsifying names to open accounts.

65. What is the definition of money laundering?

A. Where criminals convert illegally obtained money into apparently legitimate funds.

66. What is the maximum compensation the Financial Ombudsman Service can award that is binding on the respondent for complaints about actions or omissions by firms that occurred on or after 1 April 2019?

D. £375,000 plus the claimant’s costs and interest.

67. What is the difference in legal status between an IFA and a representative of a product provider?

A. A provider’s representative is the agent of the provider, an IFA is the agent of the client.

68. Colin and Barbara owned a property as tenants in common. On Barbara’s death:

C. her share of the property forms part of her estate and is distributed accordingly

69. When assessing the suitability of a financial product, a client's attitude to risk is most important where the:

C. Product has an investment element.

70. Taylor & Smith are insurance brokers who also undertake mortgage and investment advice. Which conduct of business rule book(s) will they need to comply with?

C. COBS, ICOBS and MCOB only

71. How quickly will the FCA decide on authorisation when it has received a completed application form?

D. Within 6 months.

72. What is the purpose behind ‘part 1: personal details’ of an adviser’s fact-find?

A. To gather general information about a client and their circumstances

73. How much notice does the Financial Conduct Authority need to give before conducting an enforcement visit on a regulated firm?

A. None

74. Typically, how should a financial adviser gather hard facts during the fact-finding process?

B. By asking closed questions.

75. 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?

A. The remuneration for the adviser

76. Which of the following describes the FCA’s Principle 9 ‘Customers: relationship of trust’?

D. A firm must take reasonable care to ensure the suitability of its advice.

77. What prompted the development of outcomes–based regulation?

C. The financial crisis and to allow the FCA to make judgments about the future.

78. What would be a positive indicator that a firm’s strategy was working?

A. The firm has a clear vision that supports the fair treatment of customers.

79. Strong leadership within a firm is cited as an example of good practice by the Financial Conduct Authority because it usually indicates that:

C. Positive and fair outcomes exist for customers

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. Shaun is an architect and a client of Alice, who is a financial adviser. Shaun refers his employee, Brian, to Alice for pensions and protection advice. Brian informs Alice that he is dissatisfied with the benefits package he receives from Shaun. Alice is wary of a potential conflict of interest and must therefore:

D. Maintain strict neutrality

82. Corporate culture within an organisation is often reflected in a company’s:

D. values statements and ethics codes

83. How do good business ethics make good business sense?

C. A strong ethical culture helps build trust and confidence among consumers increasing their engagement with firms and products.

84. Norman is a senior manager with a large bank’s financial advice team and is advising Eric on retirement and investment planning. Eric has disclosed to Norman that his net profit last year was £7,500, but, as a self-employed landscape gardener, he regularly accepts cash payments for work completed and does not declare this additional income to HM Revenue & Customs (HMRC). Considering solely the ethical requirements of the Financial Conduct Authority’s Statements of Principle and Code of Practice for Approved Persons (APER), what action should Norman take if any about Eric’s additional income?

B. Report his concerns to the bank’s Money Laundering Reporting Officer

85. The free asset ratio is an important indicator for which type of institution?

C. Life offices.

86. Wilma has purchased shares for £5,000 and placed them under a trust for her grandson. She has arranged the trust so that he will automatically receive the shares at the age of 18, but there will NOT be any access before that time. The trust she is most likely to have used is a:

A. bare trust.

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

A. High persistency levels.

88. Which of the following are FCA disciplinary powers?

A. Make public announcements., B. Make firms pay substantial fines., D. Order compensation payments for customers.

89. The FCA's Principles for Businesses are:

B. General statements that set out the obligations on all authorised firms under the regulatory system., C. The conduct rules by which firms must carry out their activities with customers

90. Who would be regarded as an ‘eligible complainant’ under FCA rules?

B. A consumer., D. A guarantor.

91. To comply with the Data Protection Act 2018, which of the following rules must be satisfied?

B. All data must be held securely., C. The data subject has a right to prevent processing for direct marketing purposes., D. The data must be accurate.

92. Which of the following statements are true in relation to the Data Protection Act 2018?

A. It implements GDPR standards across all general data processing, C. The Information Commissioner continues to regulate and enforce data protection laws, D. The Information Commissioner can bring criminal proceedings in certain circumstances

93. Malcolm wants to make the advice process as straightforward and simple as possible for his client, Jeremy. When completing an investment application form:

A. Jeremy should ideally sign a statement confirming the information is correct, when the form is completed by Malcolm., C. Jeremy should read and check all the information., D. Malcolm can complete the application form and ask Jeremy to check and sign.

94. Alison, a financial adviser, is reviewing her client’s circumstances. When looking into the client’s current assets, Alison 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

95. The main responsibilities for organisations using personal date are set out in the Data protection principles and state:

B. Data should be processed lawfully, fairly and in a transparent manner for individuals., D. Data should be accurate and where necessary kept up to date.

96. Barry has motor insurance, contents insurance and income protection plans under the FSCS. It is true to say that:

B. His motor insurance will be covered for 100% of the claim value., C. His contents insurance will be covered for 90% of the claim value.

97. What are the differences between best execution and execution only sales?

B. With an execution-only transaction on a complex product, the firm is required to assess the appropriateness, but under best execution the firm is required to carry out the instruction., C. Best execution does not apply to life or pension contracts. Although rare, execution only can apply to this field.

98. Which of the following are acceptable limitations to a firm’s expertise?

A. Reliance on client information., B. Reliance on others., D. Insufficient information.

99. In what circumstances would a charity be unable to refer a complaint to the Financial Ombudsman Service?

C. It has an annual income in excess of £6.5m., D. It waited more than six months after receiving the final response letter before referring to the FOS.

100

100. In relation to the sales of life policies and pension contracts:

B. Records of financial promotions must be kept for 6 years., C. All records of both must be kept for 5 years.

R01 - PP1

R01 - PP1

R01 - pp3

R01 - pp3

CII pp1

CII pp1

Real Revision

Real Revision