FASEA Regulatory Framework and Compliance 3

Question 1

Under the FASEA Code of Ethics, Standard 3 requires advisers to not advise, refer, or act in any way that results in what?

Accepted Answer

A client being in a significantly worse position than if the service had not been provided

Answer

Standard 3 prohibits advisers from acting in any way that would result in the client being in a significantly worse position than if the relevant service had not been provided.

Question 2

Which legislative instrument sets out the specific educational requirements that financial advisers must meet under the FASEA framework?

Accepted Answer

The Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2018

Answer

The Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2018 specifies the approved degrees, qualifications, and courses for financial advisers.

Question 3

An adviser is offered a complimentary overseas conference trip valued at $5,000 by a product provider. Under ASIC's guidance on conflicted remuneration, this would most likely be treated as:

Accepted Answer

Conflicted remuneration that is banned under FOFA

Answer

A $5,000 overseas conference trip from a product provider is likely to constitute conflicted remuneration banned under FOFA, as it could influence product recommendations.

Question 4

What is the 'best interests duty safe harbour' under section 961B(2) of the Corporations Act designed to do?

Accepted Answer

Provide a set of steps that, if followed, will allow advisers to demonstrate they acted in the client's best interests

Answer

The safe harbour provides specific steps that, if completed, allow advisers to demonstrate they have satisfied the best interests duty, though it does not guarantee compliance.

Question 5

Under the ongoing fee arrangement rules introduced post-Hayne Royal Commission, how frequently must clients renew their consent for ongoing advice fees?

Accepted Answer

Annually

Answer

Post-Hayne reforms require clients to renew their consent for ongoing fee arrangements annually through a fee disclosure statement and renewal notice process.

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

(FASEA) Financial Adviser Standards and Ethics Authority Practice Test

FASEA Regulatory Framework and Compliance 3