STEP Ethical Standards & Professional Conduct 3

Question 1

Under STEP ethics, which scenario most clearly triggers a duty to report suspicions of money laundering?

Accepted Answer

A client wishes to settle a large international trust using funds from an undisclosed source

Answer

Large settlements involving funds from undisclosed sources constitute a classic red flag requiring the member to consider a Suspicious Activity Report under AML obligations.

Question 2

A STEP practitioner suspects their own firm may be facilitating tax evasion. What does professional ethics require?

Accepted Answer

Raise concerns through internal whistleblowing channels and, if unresolved, consider external reporting

Answer

STEP ethics and applicable law require members to raise concerns internally first, then consider external reporting if the internal process fails to address serious wrongdoing.

Question 3

Which best describes the ethical duty of 'confidentiality' under STEP principles?

Accepted Answer

A duty that survives the end of the client relationship but may yield to legal obligations

Answer

Confidentiality is a continuing duty that persists after an engagement ends but may be overridden by law, court order, or regulatory requirements.

Question 4

A STEP member is approached by the press for comment on a client's estate dispute. The most ethically correct response is to:

Accepted Answer

Decline to comment and confirm or deny any details about the client

Answer

Confidentiality requires a STEP member to decline to confirm or deny any information about a client's affairs to unauthorised third parties, including the press.

Question 5

Which of the following actions by a trustee-practitioner would constitute a breach of the duty of loyalty?

Accepted Answer

Investing trust assets in a fund that also holds the practitioner's personal investments

Answer

Investing in a fund where the practitioner also holds personal interests creates a conflict of interest that breaches the duty of loyalty owed to trust beneficiaries.

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

(STEP) Society of Trust and Estate Practitioners Certification Practice Test

STEP Ethical Standards & Professional Conduct 3