Question 1.

From the licensee’s point of view, which of the following is a mandated obligation in the provision of advice to a retail client, as opposed to a wholesale client?

  1. Only a retail client is required to be given a FSG, SoA, PDS
  2. Dispute resolution & compensation arrangements only apply to retail clients
  3. FOFA requirements concerning best interests obligations, ongoing fee disclosure and conflicted remuneration only apply to retail clients
  4. All of the above

Question 2.

There are certain circumstances where a Financial Services Guide is not required to be given to a client, including where the client is not a retail client TRUE or FALSE 

Question 3. 

In its example Statement of Advice, ASIC points out that an SOA serves which of the following purposes?

  1. A compliance tool
  2. A mechanism to protect the providing entity against liability
  3. A complete record of all information that you would expect to find in the client file (i.e. the information kept about the advice provided to the client); or
  4. A communication tool that sets out and explains the advice
  5. A place to include additional information not required by law
  6. All of the above

Question 4.

A Statement of Advice can be combined into a single document with a Financial Services Guide TRUE or FALSE 

Question 5.

Ryan is an authorised representative and advice provider who recommends a replacement life insurance policy (product switch).  In determining whether his client is likely to be in a better position by following his advice, Ryan must take into account all of the circumstances, including the overall cost savings of the product replacement (i.e. making the switch).   In determining overall cost savings to the client, Ryan must include his fees if his fees are payable only if the switch is made.  However, his fees do not need to be included in the overall cost determination if his fees are payable regardless of whether the product switch is made or not.  TRUE or FALSE

Question 6.

  Which of the following statements is NOT true of scaled advice?

  1. The rules that apply to ‘scaled advice’ and ‘comprehensive advice’ are identical
  2. Scaled advice can include advice on a single topic or advice on multiple topics
  3. Scaled advice can be simpler and of lower quality where the subject matter is not complex
  4. When giving scaled advice, it should be very clear in your SOA what advice you have provided and what advice you have not provided

Question 7.

Authorised Representative and Advice provider Sarah recommends that that her client withdraws money from bank account savings and invest it in managed funds.  Sarah considers this to be an investment into a new product rather than a replacement product (i.e. product switch) and does not provide further disclosure (as required by s947D) in her Statement of Advice (SoA).  Sarah’s SoA is not defective.  TRUE or FALSE

Question 8.

In regard to the Financial Planners and Advisers Code of Ethics 2019, even if an adviser follows the steps set out in s961B of the Corporations Act (i.e. the safe harbour steps), that adviser may still not have complied with the duty under the Code (i.e. the Financial Planners and Advisers Code of Ethics 2019) to act in the client’s best interests.  TRUE or FALSE  

Question 9.

Which of the following is one of the main factors in determining whether or not you have provided personal advice rather than general advice?

  1. You provided a current FSG to the client
  2. You considered at least one aspect of the client’s relevant circumstances
  3. You asked general questions at the fact find interview
  4. You were in possession of at least two aspects of the client’s relevant circumstances

Question 10.

Standard 3 of the Financial Planners and Advisers Code of Ethics 2019 requires that you must not advise, refer or act in any other manner where you have a conflict of interest or duty.

Homer is an authorised representative and advice provider employed by a bank.  He recommends the bank’s own brand of risk insurance products to his client.  As part of Homer’s employment contract, he earns bonuses which are directly related to the volume of risk business he writes.  Homer has breached Standard 3?  TRUE or FALSE

Question 11.

In relation to general advice in advertisements, which of the following statements is incorrect?  Financial product advertisements must:

  1. Identify the issuer of the product
  2. Refer potential buyers to the PDS or disclosure document.
  3. The advertisement does not need to state that the client should consider whether the financial product is appropriate for them
  4. The advertisement does not need to contain the s949A warning

 Question 12.

There are two categories of advice. They are. ‘scaled advice’ and ‘comprehensive advice’, and there are different best interests duty requirements for each.  TRUE or FALSE 

Question 13.

Which of the following does NOT make a Statement of Advice defective?

  1. There is a misleading or deceptive statement in the SoA
  2. There is an omission of one or more of the main SoA requirements required by section s947B, s947C
  3. There is a failure to provide the additional SoA information required by s947D where advice recommends replacement of one product with another
  4. Information has been incorporated by reference into the SoA and the document containing the information has already been given to the client and the SOA states that a copy of the information may be obtained from the providing entity on request, at no charge

Question 14.

Read the following scenario and answer the questions below.


A client couple approaching retirement meets with an advice provider to seek advice on what to do with their superannuation when they retire.

The clients have healthy superannuation balances because they have been contributing to their superannuation for the past 35 years. They have no experience with investing.

The clients’ existing employer sponsored superannuation fund has no pension option. The clients understands that they need to start making some decisions about their superannuation but, because they have no previous investment experience, they are nervous about this process.

They want a simple, cost-effective solution that they can easily understand and does not require too much of their time.  They have been told that SMSFs are an easy way to maximise the value of their superannuation but they are unsure.

They are looking forward to retirement and do not want the burden of watching the market every day, as they have seen some of their colleagues do.

The advice provider recommends an SMSF and reassures the client that they do not need to be too involved because the advice provider will look after it for them.


  1. Has the adviser acted in the best interests of the client? (provide at least one Corporations Act reference to support up your answer)
  2. Which of the seven (7) elements of the safe harbour has the adviser failed to satisfy?
  3. In regard to the Financial Planners and Advisers Code of Ethics 2019, in what way has the adviser failed to demonstrate realise or promote the values of ‘trustworthiness’ and ‘fairness’?
  4. How has the adviser breached Standard 2 of the Financial Planners and Advisers Code of Ethics 2019?
  5. How has the adviser breached Standard 5 of the Financial Planners and Advisers Code of Ethics 2019?
  6. How has the adviser breached Standard 7 of the Financial Planners and Advisers Code of Ethics 2019?