CMFAS Financial Advisory Ethics 2

Question 1

What is the balanced scorecard framework for financial advisers?

Accepted Answer

A framework that assesses advisers on multiple criteria including ethics, not just sales

Answer

A sports scoring system

Answer

A method for calculating commissions

Answer

A client feedback form

Question 2

What should a financial adviser do if they discover a product is unsuitable for a client after sale?

Accepted Answer

Inform the client promptly and take corrective action

Answer

Ignore the issue

Answer

Hide the information

Answer

Wait for the client to complain

Question 3

What is churning in financial advisory?

Accepted Answer

Excessive trading or switching of products to generate commissions rather than benefit the client

Answer

Making butter

Answer

Updating client records

Answer

Reviewing product performance

Question 4

What is the purpose of continuing professional development (CPD) for financial advisers?

Accepted Answer

To ensure advisers maintain and update their knowledge and skills

Answer

To increase sales

Answer

To qualify for promotions

Answer

To avoid paying taxes

Question 5

What is the responsibility of a financial adviser regarding client confidentiality?

Accepted Answer

Keep all client information confidential unless authorised to disclose or required by law

Answer

Share client information freely

Answer

Only keep financial information confidential

Answer

Confidentiality expires after one year

Question 6

What is the difference between an independent financial adviser and a tied agent?

Accepted Answer

An independent adviser can recommend products from multiple providers; a tied agent represents only one company

Answer

No difference

Answer

Tied agents are more experienced

Answer

Independent advisers charge more