FASEA Regulatory Framework and Compliance 2

Question 1

Under the Corporations Act 2001, what is the maximum civil penalty that can be imposed on an individual financial adviser for a significant breach of their best interests duty?

Accepted Answer

$1,050,000

Answer

The Corporations Act 2001 provides for civil penalties up to $1,050,000 for individuals found to have breached significant obligations including best interests duties.

Question 2

Which body is responsible for receiving and acting on complaints about financial advisers under the AFCA framework?

Accepted Answer

Australian Financial Complaints Authority (AFCA)

Answer

AFCA is the external dispute resolution scheme that handles complaints from consumers about financial advisers and other financial services providers.

Question 3

What does the term 'conflicted remuneration' refer to under the Future of Financial Advice (FOFA) reforms?

Accepted Answer

Benefits that could reasonably be expected to influence the advice given to retail clients

Answer

Conflicted remuneration refers to benefits that could reasonably be expected to influence the financial product advice given to retail clients or the financial products recommended.

Question 4

A financial adviser discovers a systemic issue in their practice that has resulted in widespread non-compliant advice. Under the breach reporting obligations, when must this be reported to ASIC?

Accepted Answer

Within 10 business days of the breach being identified as significant

Answer

Under the breach reporting regime, licensees must report significant breaches or likely significant breaches to ASIC within 10 business days of identification.

Question 5

Which of the following best describes the role of the 'responsible manager' within an Australian Financial Services Licence (AFSL) holder?

Accepted Answer

A person with adequate competence and knowledge to ensure the licensee's obligations are met

Answer

A responsible manager must have adequate competence, knowledge, and skills to ensure that the licensee's obligations under the Corporations Act are met.

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

FASEA Regulatory Framework and Compliance 2