57 Questions
Which of the following is a reason why the financial planning industry exists?
To help individuals build tailored portfolios
What did the ASIC 'shadow shopping' surveys find about Financial Planners?
They were providing bad advice
What is the purpose of stronger legislation in the financial planning industry?
To introduce reform
According to the text, when is a financial service provided?
When providing financial advice
Who is considered an advisor under the legislation?
Principals, authorized representatives, and paraplanners
What is an Australian Financial Services License (AFSL)?
A license that covers those who carry on the business of providing financial services
What are the key reporting obligations once an ASFL is obtained?
All of the above
Which of the following is a requirement for a Statement of Advice (SoA)?
The SoA must contain the adviser's name and contact details.
What did ASIC's surveys find about previously prepared SoAs?
SoAs were too lengthy and complex.
What type of information should be included in an SoA?
Information elicited from the client.
In which circumstances is an SoA not required to be provided?
In some specific circumstances.
How can risk tolerance be assessed in financial advice?
By using a questionnaire
What does the principle of informed consent in financial advice require?
Clear and concise communication of advice
According to the text, what percentage of advice in the 2012 survey was considered 'good'?
3%
What is the purpose of the statutory, general law, and ethical fiduciary duty on financial advisers?
To act in the best interests of the client
What factors are used to assess whether a financial adviser has met the 'best interest' duty?
- Reasonable level of expertise
- Exercise reasonable care
- Objectively assess client's circumstances
- Regard any action implemented as being in the client's best interest
What are the two key principles for financial planners?
- Know your client (KYC)
- Know your product
Which of the following is NOT required to be included in a Product Disclosure Statement (PDS)?
The issuer's contact information
When can a Record of Advice (RoA) be provided instead of a Statement of Advice (SoA)?
When the relevant circumstances have not changed significantly
What are the penalties for failing to provide compliant documents as an adviser?
Jail sentences and fines
What is misleading and deceptive conduct?
Conduct that leads someone to believe something that is false
According to the text, what is the purpose of the Financial Ombudsman Service (FOS)?
To handle complaints related to investment advice to retail clients and insurance contracts
According to the text, what should the adviser do if the complaint cannot be resolved immediately?
Advise the client of external procedures
According to the text, what should the adviser do if the complaint is justified?
Amend procedures, apologize in writing, and pay compensation if applicable
According to the text, what action can the Financial Ombudsman Service (FOS) take if necessary?
Move to arbitration and adjudication
According to the text, what should the adviser do at all times?
Keep the client fully informed in writing
According to the text, what is the process if the client is not satisfied with the external (industry) procedures?
Go to court
According to the text, what percentage of financial advice in the 2012 survey was considered 'good'?
3%
According to the text, what percentage of consumers were satisfied with the advice when ASIC judged that the advice lacked a reasonable basis?
86%
What is the purpose of the 'best interest' fiduciary duty for financial advisers?
To act objectively and solely in the client's best interest
What are the two key principles for financial planners?
Know your client and know your product
According to the text, what must be included in a Statement of Advice (SoA)?
The adviser's name and contact details
According to the text, what did ASIC's surveys find about previously prepared SoAs?
SoAs were too lengthy and too complex
According to the text, what information should be included in an SoA?
Information on fees
According to the text, when is a Statement of Advice (SoA) not required to be provided?
When the advice is based on inaccurate or insufficient information
Which of the following is NOT a reason why the financial planning industry exists?
Lack of access to expert advice
What was the main reason for the substantial reform in the financial planning industry?
Poor practice by financial planners
According to the text, what did the ASIC 'shadow shopping' surveys find about Financial Planners?
They were not working in the best interests of their clients
According to the text, what was the purpose of stronger legislation in the financial planning industry?
To improve the fiduciary duty of financial planners
Which of the following is NOT a requirement for acting efficiently, honestly, and fairly as a financial adviser?
Maximizing profits for the adviser
How can an adviser assess a client's risk tolerance?
By examining the client's previous investments
What is the purpose of a Financial Services Guide (FSG)?
To disclose the services offered and the financial products available
What is the main purpose of the complaints resolution process in financial advice?
To resolve disputes and grievances between clients and advisers
Which of the following is NOT a requirement for obtaining an Australian Financial Services License (AFSL)?
Being a financial advisor
According to the text, who is exempt from holding an Australian Financial Services License (AFSL)?
Authorised representatives
What is the warning that ASIC has stated is sufficient when providing general advice to a retail client?
"This advice is general; it may not be right for you"
According to ASIC guidelines, which of the following is NOT a factor that may indicate the provision of personal advice?
The adviser did not intend to provide personal advice
According to the text, what is the purpose of a Product Disclosure Statement (PDS)?
To disclose the costs and charges associated with a financial product
What is the potential penalty for misleading and deceptive conduct?
Up to $15.65 million for a company and $1.565 million for an individual
What is the purpose of the Consumer Protection provisions in the financial planning industry?
To provide clients with protection against misleading and deceptive conduct
What is the recommended approach for resolving complaints and disputes in the financial planning industry?
To implement a system for rectifying mistakes speedily and practically
According to the text, what is the purpose of the Financial Ombudsman Service (FOS)?
To handle complaints about investment advice, insurance contracts, and managed investment or superannuation schemes
What is an Australian Financial Services License (AFSL)?
A license that allows individuals to provide financial advice to retail and wholesale clients, as well as dealing in financial products
What are the penalties for failing to provide compliant documents as an adviser?
Suspension of the adviser's license
According to the text, what should the adviser do if the complaint is justified?
Amend procedures, apologize in writing, and pay compensation if applicable
According to the text, what is the process if the client is not satisfied with the external (industry) procedures?
The client may need to go to court
What is misleading and deceptive conduct?
Conduct that unintentionally misleads and deceives clients
Test your knowledge on the different scenarios where advice is given, including the sale of products, client intentions, and specific types of advice such as general insurance and traded products. This quiz focuses on various aspects of providing advice in different contexts.
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