FASEA Operations and Process Management 2

Question 1

Under FASEA's Code of Ethics, when a financial adviser discovers an operational error that resulted in a client receiving incorrect advice, what is the FIRST required action?

Accepted Answer

Rectify the error and notify the client promptly

Answer

FASEA's Code of Ethics Standard 2 requires advisers to act with integrity, which includes promptly rectifying errors and informing affected clients.

Question 2

A licensee's compliance process requires that all Statements of Advice (SOAs) be reviewed by a compliance officer before delivery. An adviser skips this step due to time pressure. Which operational process principle has been violated?

Accepted Answer

Quality assurance and control

Answer

Bypassing a mandatory SOA review violates the quality assurance and control step embedded in the licensee's compliance process.

Question 3

Which record-keeping obligation under the Corporations Act 2001 applies specifically to SOAs provided by financial advisers?

Accepted Answer

SOAs must be retained for 7 years after issue

Answer

Section 961B and related regulations require SOAs to be kept for 7 years from the date they are provided to the client.

Question 4

When designing an operational process for onboarding new financial advice clients, which step is essential to meet FASEA's 'know your client' obligations?

Accepted Answer

Collecting comprehensive financial position, needs, and objectives

Answer

FASEA Standard 6 requires advisers to take reasonable steps to understand the client's relevant circumstances, including their financial position, needs, and objectives.

Question 5

A financial advice firm wants to streamline its complaint-handling process. Under RG 271, what is the maximum timeframe for resolving most complaints?

Accepted Answer

60 calendar days

Answer

ASIC's RG 271 requires most complaints to be resolved within 30 calendar days, with 45 days for superannuation complaints, but the outer limit for complex complaints is 45 days under standard rules; however, the general standard limit is 30 days — and AFCA allows up to 45 for super; the standard firm IDR limit is 30 days.

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

FASEA Operations and Process Management 2