RMA Professional Standards & Competencies 2 — Questions and Answers
Question 1: An RMA designee discovers that a colleague is providing retirement income projections using assumptions that appear overly optimistic. What is the MOST appropriate first step?
- Report the colleague immediately to regulators
- Discuss the concern privately with the colleague and suggest reviewing the assumptions (Correct answer)
- Ignore it since the colleague is responsible for their own clients
- Adopt the same optimistic assumptions to remain competitive
Correct answer: Discuss the concern privately with the colleague and suggest reviewing the assumptions
The RMA Standards of Professional Conduct encourage addressing potential violations with the colleague first before escalating to formal reporting.
Question 2: Which of the following best describes the RMA's duty of loyalty when serving both a sponsoring employer and plan participants?
- Prioritize the employer's cost-reduction goals above all else
- Balance competing interests while placing participants' retirement security first (Correct answer)
- Defer all decisions to the plan's legal counsel
- Treat both parties equally regardless of conflict
Correct answer: Balance competing interests while placing participants' retirement security first
The RMA's fiduciary framework requires that participant retirement security take precedence when conflicts arise between employer and participant interests.
Question 3: When an RMA candidate references the designation before officially receiving it, this constitutes:
- Acceptable marketing practice if the exam is passed
- A violation of RMA use-of-marks standards (Correct answer)
- Permissible if supervised by a current RMA
- A minor infraction with no consequences
Correct answer: A violation of RMA use-of-marks standards
Use-of-marks rules prohibit claiming a designation until all requirements—including experience and background checks—are formally completed and approved.
Question 4: A competency framework for retirement advisers typically identifies which three domains?
- Sales, compliance, and administration
- Knowledge, skills, and professional behavior (Correct answer)
- Products, pricing, and portfolio construction
- Tax, legal, and insurance
Correct answer: Knowledge, skills, and professional behavior
Competency frameworks generally organize requirements into knowledge (what you know), skills (what you can do), and professional behavior (how you act).
Question 5: An RMA practitioner who charges fees must ensure those fees are:
- Set at industry-average rates regardless of services rendered
- Disclosed, reasonable, and clearly communicated to clients (Correct answer)
- Approved by the RMA governing body before implementation
- Waived for clients with less than $500,000 in retirement assets
Correct answer: Disclosed, reasonable, and clearly communicated to clients
Fee transparency is a core professional standard: fees must be disclosed upfront, be reasonable relative to services, and be clearly understood by clients.
Question 6: Which action would MOST likely constitute a conflict of interest for an RMA who also sells insurance products?
- Recommending a diversified portfolio that includes an annuity
- Recommending an annuity solely because it generates a higher commission (Correct answer)
- Disclosing the commission structure before making a recommendation
- Comparing multiple annuity products before making a recommendation
Correct answer: Recommending an annuity solely because it generates a higher commission
Recommending a product primarily for its commission rather than client suitability places personal gain over client interest, which is a textbook conflict of interest.
Question 7: Continuing education requirements for the RMA designation primarily serve to:
- Generate revenue for the certifying body
- Ensure designees remain current with evolving retirement planning knowledge (Correct answer)
- Allow practitioners to expand into unrelated financial fields
- Meet state insurance licensing renewal mandates only
Correct answer: Ensure designees remain current with evolving retirement planning knowledge
CE requirements exist to keep RMA holders current with regulatory changes, new planning strategies, and emerging retirement income research.
RMA Professional Standards & Competencies 2
An RMA designee discovers that a colleague is providing retirement income projections using assumptions that appear overly optimistic.
What is the MOST appropriate first step?