Financial Advisory Ethics Flashcards

What is the ethical duty of a financial adviser when terminating a client relationship?

Answer: Ensure proper handover, provide necessary documentation, and give the client adequate notice

When ending a relationship, the adviser must give proper notice, ensure the client's interests are protected, provide all necessary documentation, and facilitate a smooth transition.

What is the purpose of the MAS Fair Dealing Guidelines in financial advisory?

Answer: To ensure fair treatment of customers at all stages of the advisory relationship

Fair Dealing Guidelines ensure that financial institutions and advisers treat customers fairly throughout the entire advisory process — from product design to after-sales service.

What is the significance of maintaining professional boundaries with clients?

Answer: It prevents exploitation, maintains objectivity, and protects both parties

Professional boundaries protect both the adviser and client, preventing exploitation, maintaining objectivity in advice, and ensuring the relationship remains professional.

What is the ethical responsibility for handling vulnerable clients?

Answer: Take extra care to ensure they understand products and are not taken advantage of

Vulnerable clients (elderly, financially illiterate, etc.) require additional care and attention to ensure they fully understand products and are not exploited.

What is the importance of accurate record-keeping in financial advisory?

Answer: It ensures accountability, regulatory compliance, and protection for both adviser and client

Accurate records provide evidence of compliance, support the audit trail, protect against disputes, and demonstrate that proper advisory processes were followed.

What ethical standards apply to digital financial advisory (robo-advisory)?

Answer: The same ethical obligations of suitability, disclosure, and fair dealing apply

Digital financial advisory services must meet the same ethical and regulatory standards as traditional advice, including suitability assessment, risk disclosure, and fair dealing.