R01 Gathering information: the fact-find: free practice questions

1. Question 1 of 5

   What is the purpose of a fact-find?

   Option A: To check the client's credit history on behalf of a lenderOption B: To find as many products as possible to sell to the clientOption C: To gather the information needed to recommend suitable productsOption D: To show the FOS that a complaint has been properly handled

   Show answer

   The answer is C: To gather the information needed to recommend suitable products

   Fact-finding gathers the information needed to determine the client's demands, needs and objectives and recommend suitable products. It also captures attitudes and aspirations.

   Why the other options are wrong

   A

   Credit checks are a lender's process, not the fact-find's purpose.

   B

   The aim is suitable advice, not maximising sales.

   D

   The fact-find is part of advice, not complaint handling.

2. Question 2 of 5

   Why does a fact-find ask about a client's country of residence and long-term residence?

   Option A: Because residence affects the client's liability to UK taxOption B: To choose the branch nearest to where the client livesOption C: To check the client's right to work in the UKOption D: To decide which language to use in the client's reports

   Show answer

   The answer is A: Because residence affects the client's liability to UK tax

   Residence and long-term residence are key factors in determining liability to UK taxes, which affects suitable advice.

   Why the other options are wrong

   B

   Branch location isn't the reason.

   C

   Right to work checks aren't the purpose.

   D

   Language preference isn't why residence is asked.

3. Question 3 of 5

   Why is information on employment and employer benefits important in a fact-find?

   Option A: To check that the client's employer is authorised by the FCAOption B: To find referrals among the client's work colleaguesOption C: To show the income at risk and the employer cover in placeOption D: To decide whether the client can afford a foreign holiday

   Show answer

   The answer is C: To show the income at risk and the employer cover in place

   Employment details reveal the earned income that could be lost through illness or death and the employer's life, sickness and medical cover. With State benefits, this shows any shortfall to address.

   Why the other options are wrong

   A

   Employers needn't be authorised.

   B

   Referrals aren't why this information is gathered.

   D

   Holidays aren't the focus.

4. Question 4 of 5

   What might a client's invested assets indicate to the adviser?

   Option A: Nothing useful for the purposes of the adviceOption B: Who their employer is and how secure the job isOption C: Their state of health and whether they smokeOption D: Their likely attitude to risk and time horizons

   Show answer

   The answer is D: Their likely attitude to risk and time horizons

   Invested assets can indicate attitude to risk (heavy equities suggests adventurous, all deposits suggests cautious) and point to short- or long-term needs and investment style.

   Why the other options are wrong

   A

   Invested assets give useful clues.

   B

   Assets don't reveal the employer.

   C

   Assets don't reveal health.

5. Question 5 of 5

   A client's employer pays full sick pay for six months. How should this affect an income protection recommendation?

   Option A: It's irrelevant when recommending income protectionOption B: It makes income protection completely unnecessaryOption C: The deferred period can be set to match the sick payOption D: The deferred period should be as short as possible

   Show answer

   The answer is C: The deferred period can be set to match the sick pay

   Knowing how much sick pay is paid and for how long lets the adviser choose a matching deferred period, so the client doesn't pay for cover they don't need.

   Why the other options are wrong

   A

   Employer sick pay is directly relevant.

   B

   Sick pay ends after six months, so a need may remain.

   D

   A short deferred period would duplicate the sick pay.

R0 Exam Prep is an independent revision tool. It is not produced, endorsed by or affiliated with the Chartered Insurance Institute (CII). Questions and explanations are original. Use it alongside the official study text. About R0 Exam Prep