Morton Moore RE5 Mock Exam: Paper Three

1. A new Representative appointed today must write the RE5 examination within what period from the Date of First Appointment?

Fit and Proper

Six monthsTwelve monthsTwo yearsThree years

2. Which of the following would be a breach of the duty to act with due skill, care and diligence?

General Code of Conduct

Recording a client needs analysis in fullRecommending a product without establishing the client needsDisclosing a conflict of interestReferring a matter to a specialist colleague

3. What should a Representative do if a client wants a product that is clearly unsuitable?

Advice

Process the request without commentExplain the risks, record the warning and the client instructionRefuse and end the relationship immediatelyReport the client to the regulator

4. Which of these is a category of complaint that the FAIS Ombud may decline to consider?

Complaints

A complaint that has already been decided by a courtA complaint about poor adviceA complaint about non disclosure of commissionA complaint about a delayed claim payment caused by the Provider

5. The Prudential Authority is mainly concerned with which of the following?

Regulators

Market conduct and client fairnessThe safety and soundness of financial institutionsConsumer complaintsAdvertising standards

6. What must a Provider disclose about its licence to a client?

Disclosure

The licence number and the categories for which it is authorisedOnly the trading nameThe names of all shareholdersThe annual turnover

7. Which of the following is true about the central Representative Register?

Representative Register

It is maintained by each Provider and by the AuthorityIt is maintained only by the OmbudIt is a private document not available to the publicIt records only Key Individuals

8. A Representative accepts a gift of high value from a product supplier. What is the correct treatment?

Conflict of interest

It is always allowedIt may only be accepted if it falls within the permitted immaterial financial interest limitIt must be given to the clientIt must be declared to the Ombud

9. Which requirement applies to the language used in client disclosures?

Disclosure

It must be in plain language and not misleadingIt must be in legal terminologyIt must always be in English onlyIt may be verbal only

10. What is the effect of failing to earn the required CPD hours in a cycle?

CPD

There is no consequenceThe Representative no longer meets the competence requirementThe Provider licence is withdrawn immediatelyThe Representative must rewrite the RE5

11. Which of these describes an execution of sale?

FAIS Act

A transaction concluded after full adviceA transaction where the client instructs the Provider without advice being givenA claim paymentA policy replacement

12. What is the required approach when a Provider outsources a function to a third party?

Operational ability

The Provider remains responsible for complianceThe third party takes over all regulatory dutiesThe client must approve the outsourcingThe Ombud must approve the arrangement

13. A client asks for a copy of the record of advice. What must the Provider do?

Record keeping

Provide it on requestRefuse because it is internalCharge a penalty feeRefer the client to the product supplier

14. Which of the following is an example of a material change that must be reported to a client?

Disclosure

A change to the Provider contact details or licence statusA change of office furnitureA change to internal staff seatingA change of stationery supplier

15. What does the term financial soundness require of a sole proprietor Provider?

Fit and Proper

Assets must exceed liabilities and the Provider must not be insolventA minimum turnover of one million randA listed company structureA guarantee from a bank

16. A Representative discovers an error in advice previously given. What is the correct action?

Treating Customers Fairly

Ignore it if the client has not complainedInform the client and the Provider and take corrective stepsAmend the record of advice quietlyWait for the annual review

17. Which document must a Provider have in place to manage complaints?

Complaints

A complaints management frameworkA marketing planA staff handbookA product brochure

18. Who may bring a complaint to the FAIS Ombud?

Complaints

Only companiesA client who has suffered or may suffer financial prejudiceAny member of the public with an interestOnly Representatives

19. What is the pass mark for the RE5 Regulatory Examination?

Exam structure

Fifty percentSixty percentSixty six percentSeventy five percent

20. Which statement about the RE5 examination format is correct?

Exam structure

It is an open book essay examinationIt is a multiple choice examination written under supervision at an approved venue or onlineIt is an oral examinationIt is a portfolio assessment

Morton Moore RE5 Mock Exam: Paper Three

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