FASEA Regulatory Framework and Compliance 4

Question 1

Under the FASEA Code of Ethics, what does Standard 6 require regarding an adviser's competence?

Accepted Answer

Advisers must only provide advice in areas where they have adequate knowledge and skill

Answer

Advisers must hold a degree approved by FASEA

Answer

Advisers must complete 40 CPD hours annually

Answer

Advisers must pass the FASEA exam every 3 years

Question 2

When must a licensee provide a Financial Services Guide (FSG) to a retail client?

Accepted Answer

As soon as practicable after it becomes apparent financial services will be provided

Answer

Only when the client requests one

Answer

At the time the Statement of Advice is provided

Answer

Before the client signs any product application form

Question 3

Under the Corporations Act, which of the following is NOT a required component of a Statement of Advice?

Accepted Answer

The adviser's tax file number

Answer

The basis on which the advice is given

Answer

Information about any remuneration or other benefits that might reasonably be expected to influence the adviser

Answer

The subject matter of the advice

Question 4

What was the primary reason the Hayne Royal Commission recommended removing the 'grandfathered commissions' exemption?

Accepted Answer

They created an inherent conflict of interest that undermined client-centered advice

Answer

They were too complicated for advisers to calculate

Answer

They were not disclosed in product disclosure statements

Answer

They only benefited large licensees and not individual advisers

Question 5

Under the FASEA Code of Ethics Standard 12, what must an adviser do when they identify that a client may be experiencing financial difficulty or vulnerability?

Accepted Answer

Give priority to the client's needs and consider whether additional safeguards are appropriate

Answer

Immediately terminate the advice relationship

Answer

Take no additional steps beyond standard advice obligations

Answer

Refer the client to a social worker before providing any advice

Question 6

ASIC has the power to issue a 'stop order' against a product disclosure statement under which circumstances?

Accepted Answer

When the PDS does not comply with the Corporations Act requirements

Answer

Only when a product has caused financial losses to consumers

Answer

When APRA has flagged concerns about the underlying product

Answer

Only after a consumer complaint has been lodged

Question 7

Under the professional year requirement for new financial advisers, what combination of supervised work experience and structured training must be completed?

Accepted Answer

1,500 hours of work including 100 hours of structured training

Answer

2,000 hours of work including 100 hours of structured training

Answer

1,500 hours of work including 200 hours of structured training

Answer

2,500 hours of work including 150 hours of structured training