Customer Needs Quiz

1. What is the primary purpose of a factfind?

A. To sell financial products
B. To gather personal and financial information about the client
C. To calculate the client's tax liability
D. To assess the client's credit score

2. Which of the following is a typical financial need for young adults in employment?

A. Saving for retirement
B. Borrowing to fund education
C. Saving for a house deposit
D. Planning for long-term care

3. What is a key consideration when analyzing a client's income and expenditure?

A. Their favorite holiday destination
B. Their past income levels
C. Their attitude to risk
D. Their surplus income available for savings or investments

4. Why is it important to establish a client's place of birth during a factfind?

A. To determine their creditworthiness
B. To assess their eligibility for state benefits
C. To establish their domicile for tax purposes
D. To understand their past

5. What is the purpose of assessing a client's attitude to risk?

A. To determine their debt to income
B. To recommend suitable financial products
C. To calculate their tax liability
D. To assess long-term planning needs

6. Which of the following is a key financial need for a client with dependents?

A. Protecting against loss of income due to illness or death
B. Saving for a house deposit
C. Investing in high-risk high-reward equities
D. Maximizing pension contributions

7. What is the purpose of presenting a features and benefits analysis to a client?

A. To meet a regulatory requirement that all financial products be accompanied by a full cost-benefit ratio calculation.
B. To replace the need for any discussion about the client's personal circumstances or objectives.
C. To provide a detailed technical manual so the client can service the product themselves without professional assistance.
D. To explain how the product meets their needs

8. What is the purpose of after-sales care?

A. To ensure the client is satisfied and their needs are met
B. To sell additional products
C. To calculate the client's future tax liability
D. To ensure the clients credit score remains excellent

9. How long must records relating to pension transfers be retained?

A. 3 years
B. 5 years
C. 7 years
D. Indefinitely

10. What is the primary objective of the FCA?

A. To maximize profits for financial institutions
B. To protect consumers and ensure market integrity
C. To regulate international trade
D. To manage government debt

Main Advice Areas Quiz

1. What is the primary purpose of budgeting in financial planning?

A. To increase credit availability.
B. To ensure sufficient funds for day-to-day living and future expenses.
C. To eliminate financial risk.
D. To reduce tax liabilities.

2. Which of the following is a key reason for clients to consider protection against the financial impact of death?

A. To avoid paying inheritance tax.
B. To remove the need for an emergency fund.
C. To increase savings for retirement.
D. To maintain the family’s standard of living after the loss of an income earner.

3. How is the sum assured for key person insurance typically calculated?

A. Based on the employee’s age and health.
B. Using a multiple of the key person’s salary or their contribution to profits.
C. Based on the company’s total assets.
D. Using the employee’s years of service.

4. What is a key difference between the cross-option method and the buy-and-sell method in partnership protection?

A. The cross-option method involves a legal obligation to buy or sell, while the buy-and-sell method does not.
B. The buy-and-sell method avoids inheritance tax, while the cross-option method does not.
C. The cross-option method is only applicable to shareholders, not partners.
D. The buy-and-sell method involves a legal obligation to buy or sell, while the cross-option method does not.

5. Which of the following is a key consideration when advising on mortgage affordability?

A. The client’s current income only.
B. The client’s credit score.
C. Stress testing mortgage payments over at least five years.
D. The client’s past income.

6. What is the real rate of return if an investment yields 4% and inflation is 3%?

A. 1%.
B. 7%.
C. 3%.
D. 4%.

7. Why is it important to start saving for retirement early?

A. To avoid paying tax on pension contributions.
B. To take advantage of compounding and reduce the required monthly contributions.
C. To ensure access to State Pension benefits.
D. To avoid the need for life insurance.

8. What is the purpose of writing a life assurance policy in trust for inheritance tax purposes?

A. To prevent the policy proceeds from forming part of the deceased’s estate.
B. To reduce the premiums payable on the policy.
C. To ensure the policy is tax-free for the beneficiary.
D. To increase the sum assured.

9. Which of the following investments is most suitable for a non-taxpayer?

A. Offshore bonds.
B. UK investment bonds.
C. Endowment policies.
D. Unit trusts.

10. Why are regular reviews of a client’s financial plan important?

A. To ensure the adviser earns ongoing commission.
B. To adapt to changes in the client’s circumstances and financial needs.
C. To comply with regulatory requirements only.
D. To reduce the client’s future tax liabilities.

Consumer Rights, Compensation and Complaints Quiz

1. Which Alternative Dispute Resolution (ADR) method under the Consumer Rights Act 2015 results in a binding decision without going to court?

A. Mediation
B. Negotiated settlement
C. Arbitration
D. Informal conciliation

2. In ADR, which process involves a neutral party helping both sides reach a voluntary agreement without imposing an outcome?

A. Mediation
B. Arbitration
C. Tribunal hearing
D. Judicial review

3. A contract term is hidden in small print and heavily favours the supplier. Under unfair contract terms rules, what is the likely outcome?

A. It remains enforceable if the customer signed the contract
B. It is enforceable if its clear on the website
C. It voids the entire contract
D. It may be deemed unfair and unenforceable, leaving the rest of the contract intact

4. Which of the following best meets the FCA definition of an eligible complainant?

A. A large corporation in dispute with government
B. A retail customer suffering financial loss from a firm’s misconduct
C. A trade association raising general concerns
D. A competitor alleging unfair competition

5. What is the correct sequence for handling a complaint in line with regulatory expectations?

A. Immediate escalation to senior management → Written acknowledgement within 8 weeks → Final response → Internal review → Referral to the Financial Ombudsman Service
B. Prompt written acknowledgement → Fact‑finding and evidence gathering → Ongoing updates to the complainant → Issuing a reasoned final response within the regulatory deadline → Advising on external escalation rights
C. Initial verbal acknowledgement → Resolution attempt → Escalation to compliance → Internal archiving
D. Complaint logged → Resolution issued → Acknowledgement sent → Investigation conducted → Ombudsman referral offered

6. After exhausting a firm’s complaint process about a mis‑sold investment, what is the most appropriate next step if the firm is still trading?

A. Apply directly to the FSCS
B. Begin court proceedings
C. Refer the case to the Financial Ombudsman Service
D. Contact the FCA

7. A pension scheme member disputes their benefit calculation due to administrative errors. Which body should they approach?

A. Financial Services Compensation Scheme
B. Pensions Ombudsman Service
C. Financial Ombudsman Service
D. Trading standards

8. Which situation would most likely involve the FSCS rather than an ombudsman?

A. A dispute over bank charges with a solvent bank
B. A complaint about unclear contract terms with an insurer
C. A service complaint about slow claims handling
D. An authorised investment firm becomes insolvent and cannot meet liabilities

9. Alongside goods and services, what else is explicitly covered by the Consumer Rights Act 2015?

A. Digital content
B. Real property transfers
C. Employment contracts
D. Charitable donations

10. Which of the following would not be part of a compliant regulated firm’s complaints procedure?

A. Clear instructions on how to complain at point of sale and online
B. Defined timelines for acknowledgement, investigation, and resolution
C. Charging an administration fee before logging a complaint
D. Escalation routes including referral to the Financial Ombudsman Service