Financial Advisory Ethics Flashcards
6 cards from real CMFAS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Financial Advisory Ethics flashcards as text
What is the balanced scorecard framework for financial advisers?
Answer: A framework that assesses advisers on multiple criteria including ethics, not just sales
The balanced scorecard evaluates financial advisers on multiple dimensions including compliance, quality of advice, customer outcomes, and professional development — not just sales volume.
What should a financial adviser do if they discover a product is unsuitable for a client after sale?
Answer: Inform the client promptly and take corrective action
The adviser must promptly inform the client about the unsuitability and work to rectify the situation, such as recommending a switch or cancellation.
What is churning in financial advisory?
Answer: Excessive trading or switching of products to generate commissions rather than benefit the client
Churning involves advising clients to make unnecessary trades or switch products primarily to generate commissions for the adviser, not to benefit the client.
What is the purpose of continuing professional development (CPD) for financial advisers?
Answer: To ensure advisers maintain and update their knowledge and skills
CPD ensures that financial advisers stay current with regulatory changes, market developments, and industry best practices to provide competent advice.
What is the responsibility of a financial adviser regarding client confidentiality?
Answer: Keep all client information confidential unless authorised to disclose or required by law
Financial advisers must maintain strict confidentiality of all client information and only disclose it with the client's consent or when legally required.
What is the difference between an independent financial adviser and a tied agent?
Answer: An independent adviser can recommend products from multiple providers; a tied agent represents only one company
An independent financial adviser can recommend products from a range of providers. A tied agent represents only one insurance company and can only recommend that company's products.
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Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- ibf.org.sg — Eligibility, fees, score release, registration, retake policy, exam format, passing score, time limit · verified Oct 2026