R01 Monitoring and reviewing clients' plans: free practice questions

1. Question 1 of 5

   Where a firm offers a periodic assessment of suitability, how often must it be carried out under MiFID II?

   Option A: Only when the client asksOption B: At least annuallyOption C: At least every six monthsOption D: At least every three years

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   The answer is B: At least annually

   Where firms offer a periodic suitability assessment, it must be at least annual. Otherwise there's no specific rule on review frequency; the client agreement sets the service.

   Why the other options are wrong

   A

   Where offered, it must be at least annual.

   C

   Six-monthly isn't the requirement.

   D

   Three years is too infrequent.

2. Question 2 of 5

   Apart from MiFID II periodic suitability assessments, what determines how often a client's plans are reviewed?

   Option A: The client's age, with yearly reviews for those over 60Option B: The service agreed with the client, within the Consumer DutyOption C: The size of the client's portfolio, and nothing elseOption D: A fixed FCA rule that requires reviews every quarter

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   The answer is B: The service agreed with the client, within the Consumer Duty

   There are no specific rules on frequency beyond MiFID II; the firm's terms set the service. The Consumer Duty requires avoiding foreseeable harm through an ongoing relationship.

   Why the other options are wrong

   A

   Age isn't the determining factor.

   C

   Portfolio size isn't the only factor.

   D

   There's no quarterly rule.

3. Question 3 of 5

   Which of these is a key life change that should prompt a review of a client's plans? 1. Birth of a child 2. Divorce 3. Redundancy 4. Inheritance

   Option A: 1 and 2 onlyOption B: 1, 2, 3 and 4Option C: 2, 3 and 4 onlyOption D: 1, 2 and 3 only

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   The answer is B: 1, 2, 3 and 4

   Key events include marriage, separation or divorce, birth or adoption, moving home, job changes or redundancy, illness, death of a relative or inheritance, and approaching retirement.

   Why the other options are wrong

   A

   Redundancy and inheritance are also key events.

   C

   The birth of a child is also a key event.

   D

   Inheritance is also a key event.

4. Question 4 of 5

   At a review meeting, what should the adviser do with the existing fact-find?

   Option A: Assume nothing has changed since the last meetingOption B: Review and update it, re-checking key items each timeOption C: Replace it with a shortened version without checkingOption D: Ask the client to complete it alone after the meeting

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   The answer is B: Review and update it, re-checking key items each time

   The fact-find should be reviewed and changes recorded. Financial situation, needs and objectives, risk profile and capacity for loss must be re-checked each time.

   Why the other options are wrong

   A

   It should never be assumed nothing has changed.

   C

   Shortened versions risk missing important information.

   D

   The adviser should review it with the client.

5. Question 5 of 5

   Some firms state that their relationship with a client covers one piece of advice only. What is the likely position under the Consumer Duty?

   Option A: It is banned outright under the Consumer Duty rulesOption B: It completely removes any responsibility for the advice givenOption C: It means the client can't complain to the FOS at allOption D: It may not satisfy the Duty, though later changes matter less

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   The answer is D: It may not satisfy the Duty, though later changes matter less

   Firms do this to avoid liability for ongoing advice. It's unlikely to fully satisfy the Duty, though a firm is unlikely to be held accountable for later needs changes where there's no ongoing relationship.

   Why the other options are wrong

   A

   It isn't banned outright.

   B

   It doesn't necessarily remove all responsibility.

   C

   The client can still complain about the advice given.

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