FASEA Financial Planning and Advice Standards Flashcards

Under FASEA requirements, what ongoing obligation do financial advisers have regarding their professional knowledge?

Answer: Complete at least 40 hours of CPD per year including ethics training

Financial advisers must complete a minimum of 40 hours of continuing professional development (CPD) per year, which must include a component on ethics.

Under FASEA's Code of Ethics, Standard 12 requires financial advisers to cooperate with which body's investigation processes?

Answer: ASIC and other relevant regulatory bodies

Standard 12 requires advisers to cooperate with ASIC and other regulatory bodies during investigations and inquiries as part of their professional obligations.

A financial adviser is asked to recommend strategies to minimize a client's tax liability. Under FASEA, the adviser should:

Answer: Provide the recommendation only if it aligns with the client's broader financial plan and is within the adviser's competence

Tax minimization strategies can be part of financial advice, but only when they are appropriate to the client's overall plan and within the adviser's area of competence.

Which of the following is an example of a financial adviser meeting FASEA's Standard 6, which requires advisers to act with care and diligence?

Answer: Thoroughly researching product options and checking their suitability before making a recommendation

Acting with care and diligence means conducting thorough, independent research and analysis before making any recommendation to a client.

When a financial adviser identifies that a client may need advice outside their area of expertise, what is the FASEA-compliant action?

Answer: Refer the client to a suitably qualified specialist

Advisers must refer clients to appropriately qualified specialists when advice is needed outside their own area of competence, consistent with competence and best interests obligations.

Under FASEA principles, why is maintaining comprehensive client records important for a financial adviser?

Answer: It helps advisers demonstrate compliance with their obligations, supports review of advice, and enables regulatory oversight

Comprehensive records demonstrate that advice was appropriate and compliant at the time it was given, supporting accountability and enabling regulatory review if required.