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100 Cards in this Set
- Front
- Back
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What was the original purpose of a building society?
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To amalgamate savers' funds and make loans for the purchase of property
Ch1 A1 |
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Which of the following is NOT a specific desire of the European Union in respect of the financial services industry?
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A single suite of financial products available across all borders
Ch1 C1 |
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Which Government department is responsible for the payment of State Benefits?
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The Dept. of Work and Pensions
Ch1 D3 |
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One of the major roles of the Financial Action Task Force (FATF) is to deal with what sort of issues?
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Money Laundering
Ch1 B1 |
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Which of the following is NOT a potential benefit of owning an ordinary share in a Company?
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Guaranteed return of initial investment in the event of the Company's winding up
Ch1 A4 |
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On the recent death of your customer, Hal, you were surprised to learn that a payment in respect of his life insurance policy did not go to his beneficiaries or dependants. This is because the policy was a...
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Key Person insurance
Ch1 A3 |
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In October 2003 State Pension Credit was introduced to replace what other state pension benefit?
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Minimum Income Guarantee
Ch2 B10H |
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Alexander is a member of his employer's defined benefit retirement scheme. Who is responsible for advising the scheme administrators how much money needs to be paid into the fund in order to pay out the promised benefits at retirement for its members?
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The Actuary
Ch2 B8B |
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Average Salary Schemes are associated with which type of retirement provisions?
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Defined Benefit Schemes
Ch2 B8B |
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Kevin, aged 62, is a self-employed joiner; he has recently read some information about retirement benefits available to him from the State. Which of the following is a State benefit Kevin would potentially qualify for in retirement?
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State Pension Credit
Ch2 B10H |
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Making gifts from capital and surplus income is a method used to reduce a potential liability for IHT,this is known as a?
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PET
Ch2 B9A |
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On the 6th April 1978 the Government introduced a scheme called SERPS to help 'top up' the State Pension scheme. When was this replaced with the new State Second Pension. When was this replaced with the new State Second Pension?
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April 2002
Ch2 B10H |
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Whatever the objective of saving and investments, in most cases it will be necessary to identify a specific timescale for when the money needs to be available in the future. What would normally be considered aLong Term investment term?
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15 years plus
Ch2 B5A |
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Stephen has suffered a sickness and is unable to work for a specific amount of time. He currently has a Payment Protection Insurance Plan (PPI) which he took out with a personal loan several years ago. He wants to know how any benefit would be payable to him from this type of plan.
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A regular monthly benefit would be payable for a maximum of two years
Ch2 B4C |
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Any Mortgage Payment Protection Insurance policy sold after July 1999 must maintain minimum standards laid down by the Council of Mortgage Lenders. They state these plans must pay out benefit after a maximum of ....off work?
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60 days
Ch2 B4D |
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A Convertible Term Assurance Plan allows the policyholder to...?
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Change the plan into a Whole of Life Plan or an Endowment Plan.
Ch2 B4A |
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Faye and John are experiencing financial difficulties and are looking at a Sale and Rent Back Agreement. Which of the following is NOT another name for a Sale and Rent Back Agreement?
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Diminishing Equity Scheme
Ch2 B2D |
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Which of the following statements is NOT correct about the benefit payable from Statutory Maternity Pay
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The Benefit is payable directly from HMRC
Ch2 B10B |
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Adam has set up a Trust for the benefit of his grandsons Jobi and Jimmy. He has also updated his Will and appointed Brian and his brother John as Executors. Who are the legal owners of the Trust property?
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Adam and Brian as Trustees
Ch3 H1 |
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Jim has recently been the subject of a bankruptcy order. Who is initially the owner of Jim's assets?
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The Official Receiver
Ch3 F2 |
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Who is responsible for calculating any Inheritance Tax due on an estate?
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HMRC
Ch3 G1A |
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Pat has recently passed away, a widow with no children. If she has not made a Will, which category of relative
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Parents (full estate)
Ch3 G1C |
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Which of the following is an example of a Statutory Trust?
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Intestacy Trust
Ch3 H2 |
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Which documentation must be supplied by Trustees of a lIfe policy to the insurance company on the death of a Settlor to allow benefits to be paid out?
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Death Certificate and Trust Deed
Ch3 H3 |
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Which of the following is NOT one of the 'Three certainties' required to establish a Trusts?
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Written and signed documentation
Ch3 H4A |
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Which of the following would be classed as a duty of the Trustee?
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To invest any money not immediately required to be paid out
Ch3 H4 |
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Of the following, who would pay Corporation Tax?
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Hammond Car Sales Ltd, specialists in three-wheeled vehicles
Ch3 A1-A4 |
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The Chancellor announced plans to enhance transparency and accountability of the UK's financial regulatory system through the establishment of the Council for Financial Stability. Who does this council consist of?
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The Chairman of the FSA
The Chancellor of the Exchequer The Governor of the Bank of England Ch4 A |
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What was established on N2 day?
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FSA as the sole regulatory body
Ch4 B |
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Which of these firms could be exempted from the MiFID requirements?
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A UK based IFA advising on investments who does not hold Client Funds
Ch4 C1 |
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The Insurance Mediation Directive (IMD) imposed Professional Indemnity (PII) cover requirements on intermediaries give advice on insurance based products. How are these minimum requirements increased?
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By the European Index of Consumer Prices
Ch4 C2 |
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The OFT constantly reviews the impact FSA rules and practices have on competition. If they believe there is a significant effect on competition after investigation to whom should they make a report of their findings?
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Competition Commission, Treasury and FSA
Ch4 D1 |
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If a Trustee of a pension scheme breaches the law in respect of running a Pension Scheme what are the maximum penalties?
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An individual up to £5,000 and a Company up to £50,000
Ch4 D3 |
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The FSA has the power to apply to the courts to stop traders infringing a wide range of consumer protection legislation. Under which Act / Regulation is it given these powers?
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Enterprise Act 2002
Ch5.1 A1 |
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Which of the following is an FSA objective?
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Promote Public Awareness
Ch5.1B |
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Following an investigation by FSA enforcement staff a case is prepared against a company. Who is responsible for CONSIDERING the appropriateness of the proposed penalty and issuing of statutory notices?
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The Regulatory Decision Committee
Ch5.1 C1A |
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Which of these does NOT come under the scope of the FSA?
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To review the impact of FSA rules and practices on competition
Ch4 D1 & Ch5.1 C1 Fig 5.2 |
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Some aspects of financial services are not within the scope or are regulated by the FSA. Which of these is however?
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To make rules for financial promotions
Ch5.1 C1A |
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The FSA has identified a market trend that it thinks is unfavourable to consumers. What is the MOST LIKELY outcome?
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It will issue general guidance to all firms in the market
Ch5.1 C1A |
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John an authorised mortgage broker has also been giving investment advice for which he isn't authorised . The FSA has investigated his activities under what provision can they prosecute him?
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For a breach of the general prohibition
Ch5.1 C2 |
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As a general principle how do the FSA decide on supervision of authorised firms?
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According to the risk they pose to their statutory objectives
Ch5.1 D1 |
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The FSA classifies a small firm as a Low-Impact Firm. As a result they monitor the firm by combination of methods. Which is NOT one of those methods?
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By a specific risk assessment or risk mitigatin program
Ch5.1 D1 |
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As a reslut of receiving a regular flow of information from a regulated firm i.e. sources of business, complaint statistics business volumes etc. The FSA decides to take disciplinary action - in what way can the FSA be seen to have acted?
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Reactively
Ch5.1 DA |
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Which of the following would be authorised as an Approved Person?
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An investement adviser working for ABC Plc
ABC's head of compliance Ch5.1 D1B & Ch6 B |
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What type of organisation is the Financial Stability Board?
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An international body established to address financial vulnerabilities and enhance cooperation amongst international financial institutions
Ch5.1 E2A |
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The Bank of England has a statutory objective to 'contribute to protecting and enhancing the stability of the financial institutions of the UK'. Which methods does it use to carry out this function?
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Acting as a lender of last resort
Payments systems oversight Ch 5.1 E1 |
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The FSA monitoring the financial strength of XYZ Bank Plc decides it is less secure than its rivals. What is the most likely reason for this?
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It is offering higher interest rates than its rivals.
Ch 5.1 E1 |
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The FAR (Free Asset Ratio) is used as an indication of the financial strength of a Life Office. You have the following information on Main Life Plc:
Turnover £31,600,000 Net Profit £ 4,300,000 Total Assets £520,000,000 Liabilities £475,000,000 Calculate Main Life's FAR. |
8.65%
Ch 5.1 E2A |
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John an IFA has been considering which life office to recommend to one of his clientsuse for a subsatntial pension transfer? A part of his judgement he has compared a number of companies by looking at their quoted FAR figures, however, a number of them have similar figures and fees and anyway he has heard that they could also be misleading. What is the most appropriate way of him further assessing the strength of these firms?
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Using information from rating agencies
Ch 5.1 E2A |
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Which of these is incorrect?
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FSA rules are made under a combination of the FSMA 2000 and the Insurance Mediation Directive
Ch5.2 Intro |
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A firm is effecting and carrying out contracts of insurance. Which of these entities can carry out this regulated activity?
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ABC Plc and
A member of Lloyds Ch 5.2 A1A |
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Wayforward Plc is seeking to carry on a motor vehicle liability insurance business. What do the rules state about where their claims representatives must be located?
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In each EEA other than the UK
Ch 5.2 A1A |
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John is employed as a company representative feels his company has done the wrong thing. Under which of these circumstances is he least likely to benefit from Public Interest and Disclosures Act 1998?
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The firm has increased targets to make acievement of bonus dependent on selling a high proportion of its own investments
Ch 5.2 A1C |
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In which of these circumstances is a firm not allowed to take out an insurance contract to indemnify it to cover liabilities?
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To cover the costs of penalties imposed by the FSA
Ch 5.2 A3A |
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How is the FSA funded?
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Special Project Fees/Periodic Fees/Application Fees
Ch 5.2 A3B |
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Firms are notified of the proposed FSA fee rates in June/July each year. Over what period do the fees payable to the FSA apply?
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The tax year
Ch 5.2 A3B |
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Under Prudential standards companies are required to hold or maintain adequate capital. Which of these is defined as the most loss absorbent and permanent?
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Share capital
Ch 5.2 B2 |
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Firms are caught under the rules contained inBIPRU 12 have to ensure that they have sufficent capital and that they will be able to function if certain external stresses are applied. What is NOT one of those requirments?
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To have sufficent cash in hand to meet immediate short term requirements
Ch 5.2 B3A |
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The FSA seek to ban indirect benefits to intermediaries. Which of these is NOT acceptable?
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Travel expenses for an intermediary to attend a seminar
Ch 5.2 C1B |
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A cancellation notice must be sent for which of these policies?
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Life Policy with a term of one year
Ch 5.2 C2A |
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The FSA regulates mortgage contracts, except for?
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Dave has decided that now commercial property valuations are at a low level he will get company DW Ltd to purchase the Freehold of the premises they currently lease
Ch 5.2 C3A |
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A firm has inadvertently sent a return to the FSA which states an incorrect figure on the number of advisers who are currently employed. What is THE MOST LIKELY response?
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A censure
Ch 5.2 D1 |
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In MAy 2010 Daniel lost £75,000 he invested in an OEIC due to the insolvency of the provider. How much is he eligible to claim under the Financial Services Compensation Scheme?
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£50,000
Ch6 H |
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How are the bonuses on with profits contracts covered by the Financial Services Compensation Scheme?
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They can be included in a claim if declared prior to the liquidation of the life office
Ch 6 H |
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You recommended your client comes out of his employer's pension scheme but your advice was not taken. How long should you keep the records?
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Indefintely
Ch6 C1 |
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The GABRIEL system is used to report to the FSA. Which of these does NOT need to be reported to the FSA?
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Details of number of staff
Ch6 C2 |
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Which of these was not a primary objective of the RDR?
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Reduce the cost of advice
Ch7 A1A |
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Charities and trade unions, amongst others, frequently provide generic financial advice. This means?
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They do not need to comply with the FSA rules
Ch7 A1B |
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You are an IFA. Under the law of agency:
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You act for the client
Ch7 A2B |
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You work in the telephone marketing division of an IFA and are starting a clod calling campaign. Which of these rules do not apply?
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The caller must identify himself and disclose how the client's telephone number was selected
Ch7 A4D |
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Your client wants to set up a complex arrangement on an execution only basis. You should?
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Assess the appropriateness of the transaction
Ch7 B3D |
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Kate has had feedback from her compliance department that her suitability report does not meet required standards. This is because:
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She listed advantages of her recommednation, not disadvantages.
Ch8 D1 |
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How would a Suitability Report
prepared by a tied adviser differ to one prepared by an IFA? |
There would be no need to explain how the provider was selected
Ch8 D1 |
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Which of the following will not be included in the Key Features Documents for investments?
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The exclusions
Ch8 A4 |
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Which of the following would you be unlikely to find in the Planning and Objectives section within a Fact Find?
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Monthly income and expenditure
Ch8 B1D |
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If a firm becomes aware of a material breach of the Principles for Business by an adviser, who should report it to the FSA?
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The Compliance Officer
Ch9 A1 |
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If a member of staff wishes to challenge a new firm policy, which of the key cultural drivers that the FSA believes has a significant influence on the behaviour of management, would this fit into?
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Decision making
Ch9 B1 |
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What name is given to firms whose failure would have a wider effect on other firms as well as the economy as a whole?
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High impact firms
Ch9 A3 |
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The firm's overall conflicts policy should be:
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Owned by a member of the board or senior management
Ch9 C3 |
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Which of following is not one of the FSA Principles for Business?
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Treating customers fairly
Ch9 A1 |
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What type of regulation is about the FSA making judgements on what might happen in the future?
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Outcomes-based
Ch9 A3 |
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Which of the following is not mandatory for a senior manager to be an approved person?
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Ownership of the conflicts policy
Ch9 C2 |
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Which of the following management information would be the least useful proxy measure to evaluate ethics in a firm?
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Staff turnover
Ch10 C1 |
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In a TCF culture, which of the following is NOT one of the six high-level consumer outcomes that the FSA has set out?
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Products and services are designed to meet the needs of most customers
Ch10 C2 |
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Philip is advising on a regular savings ISA to a customer. Whilst doing the fact find, the customer stated he has a substantial surplus monthly income over expenditure. Philip had checked the customer's sole bank account movements before the interview and saw that he was moving more into an unauthorised overdraft each month. Should Philip proceed with the sale, his actions would be considered
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Unethical but compliant
Ch10 C2 |
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Dawn is going to advise her customer to take out an OEIC. The customer has agreed to a five year plus product term but mentioned during the interview that she may decide to use the money for a house deposit in 2 years. Dawn's actions would be considered
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Unethical and non compliant
Ch10 C2 |
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During an interview with a higher rate taxpayer, you discover that he has a substantial amount of shares but has never paid additional tax on their income as he has never been sent a tax return. considering only the Code of Ethics, what should you do?
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Encourage the client to contact HMRC to report their total income
Ch10 B4D |
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You are appointed representative of a large principal. This means?
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Anyone giving financial advice must be an approved person under the FSA
The FSA must be notified within 10 working days of termination of the appointed representative contract |
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A training and competence scheme would normally cover?
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The assessment of the training needs of the recruit
An outline of the firms internal exams The required qualifications for a financial adviser Ch6 D1/2/3 |
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You have been given a task of reviewing your firm's money laundering arrangements. Which of these have to be in place?
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There must be a system for keeping records
There must be on-going monitoring of business relationships Ch6 E2A |
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You are handling a compliant against your firm. You have not been able to resolve this within the 8 weeks. What must you do?
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Write to the complainant explaining the situation
Advise the complainant of their right to refer to the Financial Ombudsman Service Ch6 G1 |
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The FOS has upheld a complaint against your company. They can?
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Recommend an award of £200,000
Require you to pay the complainant's costs Order you to take remedial action Ch6 G2 |
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The website Moneymadeclear set up by the FSA is designed to help people?
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Understand financial jargon
Borrow wisely By giving information on retirement planning Ch7 A1C |
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Under Stakeholder rules
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Advice on fund choice is not given
A series of questions replaces a full fact find Information must be collected regarding the client's debts Ch7 A3 |
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Past performance figures can be used in a non-real promotions provided?
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It gives a fair and balanced indication of performance
It is not used to indicate future performance Ch7 A4A |
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You are checking the suitability report of one of your advisers. What would you be looking for it to include?
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The client's needs
The possible disadvantages of the recommendation The cost of the advice Ch7 A5B |
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Which of these is NOT true regarding cancellation rights?
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A full return of the investment will be given
The cancellation period runs from dispatch of the notice to the client Ch7 B5 |
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For execution only business:
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Money laundering checks may still have to be completed
The client has no right of complaint about the suitability of the product Ch7 B3C |
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Which of the below would be adequate grounds for a review of an existing client?
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The anniversary of the original fact find
The marriage of the client The retirement of the client The client moving house Tax changes Ch7 A4 |
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The rules on financial promotions do not cover..
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General insurance
Pure protection life policies Reinsurance Ch7 A4 |
