FASEA Professional Ethics and Standards 5

Question 1

Under FASEA's ethical framework, an adviser who identifies that a client has been given poor advice by a previous adviser should FIRST:

Accepted Answer

Inform the client of the issue, provide corrective advice, and document the findings

Answer

Immediately contact ASIC to report the previous adviser

Answer

Ignore the past advice and focus solely on the new engagement

Answer

Refer the client to a legal practitioner without providing any financial advice

Question 2

FASEA Standard 12 requires advisers to support the profession's reputation. This is BEST demonstrated by:

Accepted Answer

Upholding ethical standards in daily practice and reporting breaches by peers

Answer

Avoiding all public commentary on financial matters

Answer

Joining a professional association and attending annual conferences

Answer

Advertising services using testimonials from satisfied clients

Question 3

When a financial adviser is also a director of a company that issues financial products, which FASEA principle is MOST at risk?

Accepted Answer

Independence and management of conflicts of interest

Answer

Competence

Answer

Confidentiality

Answer

Diligence

Question 4

A client asks an adviser to recommend a product the adviser is not qualified to advise on. Under FASEA's competence standards, the adviser SHOULD:

Accepted Answer

Decline and refer the client to a qualified adviser for that product type

Answer

Provide the recommendation after a brief internet search on the product

Answer

Provide the advice with a disclaimer that it is outside their expertise

Answer

Recommend a similar product within their competence without informing the client

Question 5

What distinguishes 'ethical' behaviour from merely 'legal' behaviour in the FASEA framework?

Accepted Answer

Ethical behaviour meets a higher standard of conduct than minimum legal compliance

Answer

Ethical behaviour generates higher revenue for the adviser

Answer

Legal behaviour supersedes ethical obligations in all cases

Answer

Ethical behaviour applies only to client-facing interactions

Question 6

Under FASEA, an adviser who provides advice in a new subject area without adequate knowledge is in breach of which standard?

Accepted Answer

Standard 5 — Competence

Answer

Standard 2 — Integrity

Answer

Standard 9 — Confidentiality

Answer

Standard 11 — Independence

Question 7

An adviser notices that a client's financial circumstances have significantly changed since their last review. Under FASEA's ongoing duty obligations, the adviser SHOULD:

Accepted Answer

Proactively contact the client, reassess their situation, and update the advice accordingly

Answer

Wait until the client requests a review before making any changes

Answer

Adjust the client's portfolio without consulting them to save time

Answer

Send the client a general market update newsletter without individual assessment