R01 Mock Test

Front 1

Which of the following factors would not be used to determine a clients pension requirements?

Back 1

Attitude to risk.

Front 2

What are the main features of a defined benefit pension scheme?

Back 2

A fund administered by trustees where the pension is earnings related.

Front 3

Damian has been found to have given out information that has given a misleading impression about an investment. What action can the FCA take?

Back 3

This is a civil offence and the FCA can impose a fine or make a public statement.

Front 4

Which of the following is outside the scope of the FCA?

Back 4

Mortgage regulation

Front 5

What is the definition of free asset ratio?

Back 5

The surplus assets of a life office over the value of its liabilities expressed as a percentage of total assets.

Front 6

Which EU led requirements were incorporated into COBS?

Back 6

MIFID

Front 7

If a provider gives benefits to an intermediary how long must they keep a record of it for?

Back 7

5 years

Front 8

How does the insurance conduct of business sourcebook (ICOBS) categories insurance products?

Back 8

General insurance, pure protection and PPI

Front 9

Which of the following mortgage contracts is regulated?

Back 9

Where 40% of the property will be used by the borrower.

Front 10

Within the ninth block of the FCA handbook, what does the perimeter guidance manual (PERG) cover?

Back 10

Guidance on when the authorisation is required or exempt person status is available.

Front 11

Under the FSA's strategy for retail distribution review (RDR) which of the following was central?

Back 11

Personal responsibility.

Front 12

What regular reports must a authorised firm provide the FCA?

Back 12

Amount held in clients bank accounts.

Persistency statistics.

Number of complaints received.

Front 13

What factors should a firm take into account in developing a training plan for a new recruit who will be dealing with a retail clients?

Back 13

Qualifications.

Scope of current role.

Previous training.

General market knowledge.

Front 14

What criminal offences were created in the proceeds of crime act 2002 as part of the UK fight against money laundering?

Back 14

Disgusting criminal property.

Removing criminal property from the UK.

Failing to disclose suspected cases of money laundering.

Front 15

A firm is required to keep records of its clients identity verification for 5 years, what form can this take?

Back 15

Photocopies.

Original documents.

Electronic copies.

Computerised copies.

Front 16

What would be regarded as client data?

Back 16

National insurance records.

Family circumstances.

Bank details.

Front 17

Which of the following is a difference between a 'real time' promotion and a 'non real time' promotion?

Back 17

Real time promotions are interactive dialogue.

Generally a non real time promotion is equivalent to a written financial promotion.

A real time financial promotion cannot be communicated at an unsociable hour.

Front 18

Which of the following are not pure protection policies?

Back 18

Unemployment cover.

Endowment.

Front 19

Client agreements are not required for which of the following?

Back 19

Direct offers financial promotions.

Life office selling life polices as principal.

Life offices selling pension policies as a principal.

Front 20

What must be included with a client agreement?

Back 20

Regulation by the FCA.

Any restrictions.

Risk warnings.

Front 21

Which of the following are acceptable limitations to a firm's expertise?

Back 21

Reliance on client information.

Reliance on others.

Insufficient information.

Front 22

Which of the following has a 30 day cancelation period?

Back 22

Electing to take income withdrawal.

Pension annuities.

Stakeholder pension.

Transferring a pension.

Front 23

What key life changes could have an impact on existing and future financial advice?

Back 23

Birth of a child.

Marriage/divorce.

Change of employment.

Accident or illness.

Front 24

Where a investment manager establishes and manages a portfolio of assets taking all the decisions to meet the investors objectives, this is known as?

Back 24

Discretionary service.

Front 25

What are the implications of the additions to the remuneration code effective from 1 January 2011?

Back 25

All authorised banks, building societies and capital adequacy directives investment firms are now within its remit.

Front 26

What is the general rule requirement under the capital adequacy?

Back 26

All businesses must be able to meet their financial obligations as and when they fall due.

Front 27

On what basis did the capital requirements directive divide capital into tiers?

Back 27

Three tiers based on loss absorbency and permanence of the capital.

Front 28

Within the FCA handbook what does COBS stand for?

Back 28

Conduct of business sourcebook.

Front 29

The term 'bancassurer' is often used to describe ?

Back 29

A life office Owned by a bank to distribute products via their branches.

Front 30

What are the main types of sickness and health insurance available in the UK?

Back 30

Income protection

Critical illness

Private medical insurance

Personal accident and sickness insurance

Front 31

What changed did the office of fair trading along with the FSA make to payment protection insurance contracts in February 2009?

Back 31

Before this date these policies could be paid as a lump sum added to the loan.

Front 32

What is the difference between a compulsory purchase annuity (CPA) and a purchased life annuity (PLA)?

Back 32

PLA income is split into income and capital. Only the income element is taxable. CPA is treated as earned income and the whole amount is taxable.

Front 33

Which of the following is true in relation to partnerships?

Back 33

The partners are liable for tax and NI on their share of the profits.

Front 34

Which of the following is not a responsibility of the office of fair trading?

Back 34

Products being expressed in plan English.

Front 35

Which of the following can't a firm contract out to a compliance consultant?

Back 35

Regulatory requirements.

Front 36

Which of the following could be a consequence of failing to monitor compliance adequately?

Back 36

Unwelcome publicity.

Front 37

The PRA divides the firms it supervises into categories of potential impact. How many categories are there?

Back 37

5

Front 38

Which of the following does NOT require a cancellation notice to be sent?

Back 38

A life policy with a five month term.

Front 39

Which of the following is NOT a mortgage firm that would usually require regulation?

Back 39

Surveyor

Front 40

Which of the following is not a basis for mortgage advice where the intermediary brings customers and lenders together?

Back 40

Intermediary advising on mortgage protection only.

Front 41

Which of the following statements regarding the differences between information and advice is NOT true?

Back 41

Advice includes using decision trees to help a client decide the best option.

Front 42

The FCA is planning to investigate an adviser. What are the requirements?

Back 42

No notice is required as the investigation relates to possible insider dealing.

Front 43

If a solicitor assisted a client with a claim on a life policy would FCA authorisation be required?

Back 43

No the firm is an exempt professional firm.

Front 44

What is the minimum investment for the medium term investment product within the stakeholder range?

Back 44

£20

Front 45

The rules that all communication concerning financial promotion of regulated business must be fair, clear and not misleading does NOT apply to?

Back 45

A personal quotation or illustration.

Front 46

What is an approved person?

Back 46

Someone who carries out a controlled function.

Front 47

Which of the following firms, authorised prior to the FSMA, would have been automatically re-authorised by the FSA and since recognised by the FCA and PRA?

Back 47

Firms authorised under the banking act 1987

Firms authorised under the insurance companies act 1982

Firms authorised under a self - regulating organisation under the financial services act 1986

Front 48

What must a firm establish before it can appoint someone as an appointed representative (AR)?which

Back 48

The appointment won't prevent the firm from satisfying the threshold conditions.

The firm had adequate control over the persons regulated activity.

The AR is solvent.

Front 49

Which of the following rules apply to reporting of complaints?

Back 49

Firms must submit statistics regarding complaints twice a year.

Firms must report the number of complaints closed in 4 weeks or less of receipt.

Firms must report the number of complaints closed within 8 weeks.

Front 50

Under which circumstances must a firm complete customer due diligence?

Back 50

When a regulated firm establishes a business relationship.

When a regulated firm carries out an ad hoc transaction.

Front 51

What information must be given in a direct offer financial promotion?

Back 51

Conformation that the firm is regulated or authorised by the FCA

Full name and address of the person offering the investment.

Details of any charges and expenses.

Front 52

Which of the following would be regarded as a conflict of interest or a material interest?

Back 52

Dealing with an agent for more than one party.

Dealing as a principal.

Acting as a broker fund advisor.

Recommending a transaction to buy an investment where another client had already given an instruction to sell in the same investment.

Front 53

Under what circumstances does a firm not have to give a client a services and costs disclosure document?

Back 53

If it had already been given to the client and is still valid.

If the initial contract is via telephone.

Execution only transactions in non-life packaged products.

Front 54

For how long must client agreements be held for?

Back 54

5 years for most forms of business.

The duration of the relationship with the client, if longer than 5 years.

Indefinitely if the case is a pension transfer.

Indefinitely if the case is an FSAVC

Front 55

What are the categories of organisations who introduce business to a firm?

Back 55

Firms that are not FCA authorised.

Exempt firms.

Firms that are regulated by a designated professional body.

Front 56

What information must be stated on the cancellation notice?

Back 56

Confirmation of the clients right to cancel.

It must specify the duration of the clients right to cancel.

The steps the client must take in order to cancel.

Front 57

Banks and building societies were developed from the need to?

Back 57

Provide a safe but accessible place to keep individual's money.

Front 58

Which of the following statements regarding 'structured' and 'unstructured 'loans is NOT true?

Back 58

Structured loans are viewed as lower risk that unstructured.

Front 59

What would NOT be an advantage of using a wrap?

Back 59

The ability to benefit from special offers and or discounted charges.

Front 60

What is the correct definition of a derivative?

Back 60

The right or obligation to buy or sell another type of asset at a specified price at a specific date and time in the future.

Front 61

How is capital adequacy accessed?

Back 61

Risk identification and management processes.

Front 62

Within the FCA high level standards, regulated firms must comply with common plat for requirements, what does this refer to?

Back 62

The systems and controls a firm should have that are appropriate to its business.

Front 63

What are the rules regarding a firm taking out insurance indemnity itself for the FCA penalties or enforcement costs?

Back 63

A firm cannot indemnify itself against an FCA penalty, but can against cost of defending enforcement action or costs it may be ordered to pay.

Front 64

Who does COBS apply to?

Back 64

All regulated life, pension and investment businesses and deposit taking institutions.

Front 65

Under COBS 2 providers can run seminars for intermediaries, but can they pay their expenses?

Back 65

They cannot pay their expenses.

Front 66

What is a demand and needs statement?

Back 66

A statement detailing the clients needs with the reasons for any recommendations.

Front 67

Who would be regarded as a eligible complainant and therefore qualify for compensation?

Back 67

A persons representative of a deceased person.

A trustee on behalf of a small family trust.

Front 68

What forms of of remuneration must a firm disclose before selling a packaged product via its agent?

Back 68

Any remuneration due from the packaged product.

Proper value of the agents car.

Proper value of the agents pension benefit.

Front 69

What is the difference between best execution and execution only sales?

Back 69

With 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.

Best execution does not apply to life of pension contracts. Although rare,execution only can apply to this field.

Front 70

Which investments have a 14 day cancellation period?

Back 70

Transferring a child trust fund with face to face advice.

Enterprise investment scheme with face to face advice.

Transferring an ISA with face to face advice.

Cash deposit ISA.

Front 71

Which of the following financial planning opportunities can usually be addressed at the end of a tax year?

Back 71

Using up remainder of ISA allowances.

Utilise CGT allowance.

Utilise remaining pension contribution limits.

Front 72

Which of the following mortgage contracts is NOT regulated?

Back 72

The loan is secured on a second charge.

Front 73

How did the consumer credit act 2006 change the definition of an individual?

Back 73

To include sole traders,small partnerships and unincorporated associations.

Front 74

How do the FCA and the office of fair trading work together in considering fairness of standard terms in financial services contracts?

Back 74

The FCA considers fairness within authorised firms and OFT considers the fairness of unregulated activities.

Front 75

When should a firm notify the FCA of its address change?

Back 75

In advance of the change in address.

Front 76

Since 31st December 2012 all remuneration for financial advice will be in the form of a fee- what is this 'customer agreed remuneration' called?

Back 76

Advisor charging.

Front 77

Which of the following is NOT regarded as a key cultural driver?

Back 77

Ethnic diversity.

Front 78

Which of the following is NOT one of the FCA principles for business?

Back 78

Honesty.

Front 79

Which of the following are regulated activities as defined under the FSMA 2000?

Back 79

Advising on home finance activities.

Assisting in the administration and performance of contract of insurance.

Safeguarding and administering investments.

Front 80

Which documentation/procedure would be deemed acceptable to help verify client identification?

Back 80

Valid passport.

National identity card.

Firearms certificate.

Record of home visit by member of staff.

Front 81

Which government department is responsible for the payment of state benefits?

Back 81

The department of work and pensions.

Front 82

The insurance mediation directive (IMD) imposed professional indemnity insurance PII cover requirements on intermediaries that give advise on insurance based products. How are these minimum requirements increased?

Back 82

By the European index of consumer prices.

Front 83

R

Back 83

R

Front 84

Alex is a member of his employees 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 of its members

Back 84

The actuary.

Front 85

Kevin aged 62 is a self employed joiner. He recently read some information about retirement benefits from the state. What benefit does he potentially qualify for?

Back 85

State pension credit.

Front 86

On 6th of April 1978 the government introduced a scheme called the state earnings related pension scheme to help top up the state pension. When was this replaced with the new state second pension?

Back 86

April 2002

Front 87

Jim has recently been the subject of a bankruptcy order. Who is initially the owner of Jim's assets?

Back 87

The official receiver.

Front 88

Who is responsible for calculating the inheritance tax due on an estate?

Back 88

HMRC

Front 89

Which of the following is an example of a statutory trust?

Back 89

Intestacy trust.

Front 90

Which of the following documents 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?

Back 90

Death certificate and trust deed.

Front 91

Which of the following is NOT one of the three certainties required to establish a trust?

Back 91

Written and signed documentation.

Front 92

What was established on N2 day?

Back 92

The FSA as the sole regulatory body.