FASEA Ethical Principles 2

Question 1

Under the FASEA Code of Ethics, what does the principle of 'acting in the best interests of the client' primarily require?

Accepted Answer

Prioritizing the client's interests above the adviser's own interests

Answer

The best interests duty requires advisers to prioritize client interests above their own, ensuring advice is genuinely suited to the client's needs and circumstances.

Question 2

A financial adviser discovers that their client is about to make a decision based on a misunderstanding of key facts. Under FASEA ethical standards, what should the adviser do?

Accepted Answer

Correct the misunderstanding and ensure the client has accurate information

Answer

Advisers have a duty of candour and must proactively correct misunderstandings to ensure clients can make informed decisions.

Question 3

Which FASEA ethical standard addresses the requirement that financial advisers must not engage in conduct that is 'misleading or deceptive'?

Accepted Answer

Standard 3 – Not acting in a way that is misleading or deceptive

Answer

FASEA Standard 3 specifically prohibits misleading or deceptive conduct, including omissions that create false impressions.

Question 4

Under FASEA's ethical framework, 'fairness' in the context of client dealings means:

Accepted Answer

Applying consistent, impartial judgment free from bias or self-interest

Answer

Fairness requires consistent, impartial judgment that is not distorted by self-interest, bias, or favouritism.

Question 5

An adviser is asked to provide a Statement of Advice for a complex situation they have limited experience with. Ethically, they should:

Accepted Answer

Decline or seek assistance to ensure competent advice is delivered

Answer

Competence is a core ethical duty; advisers must only provide advice within their knowledge and skill level or seek appropriate assistance.

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

FASEA Ethical Principles 2