R04 Retirement compliance and consumer protection: free practice questions

1. Question 1 of 5

   When must a provider first send an open market options statement?

   Option A: Six weeks before retirementOption B: Within two months of the client reaching 50Option C: Only when the client asks for one in writingOption D: When the client reaches 55

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   The answer is B: Within two months of the client reaching 50

   The first statement goes within two months of age 50, then every five years, plus at other trigger points such as a retirement quote request.

   Why the other options are wrong

   A

   Six weeks is the reminder stage.

   C

   It's a requirement, not on request.

   D

   The first one is at 50, not 55.

2. Question 2 of 5

   Under COBS 19.9, what must a firm show if the market-leading annuity pays more than its own quote?

   Option A: The monetary difference and that a higher income may be availableOption B: Only the percentage differenceOption C: A recommendation to buy the market-leading annuityOption D: Nothing, if the client is an existing customer of the firm

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   The answer is A: The monetary difference and that a higher income may be available

   Firms must compare their quote with the market-leading quote and, if lower, state the cash shortfall and that shopping around could give more.

   Why the other options are wrong

   B

   It must be a monetary amount.

   C

   It's comparison information, not a recommendation.

   D

   Existing customers must still be told.

3. Question 3 of 5

   Which is NOT one of the risk factors required in a drawdown suitability report?

   Option A: The State Pension may be reducedOption B: Income levels may not be sustainableOption C: The fund's capital value may be erodedOption D: There may be tax implications

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   The answer is A: The State Pension may be reduced

   Required factors include capital erosion, returns below illustration, worse future annuity rates, unsustainable income and tax implications.

   Why the other options are wrong

   B

   Unsustainable income is required.

   C

   Capital erosion is required.

   D

   Tax implications are required.

4. Question 4 of 5

   Which statement about targeted support is correct?

   Option A: It needs no FCA permissionOption B: It can be used for DB transfer decisionsOption C: It gives ready-made suggestions to groups with shared characteristicsOption D: It is personal advice after a full fact-find

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   The answer is C: It gives ready-made suggestions to groups with shared characteristics

   Since 6 April 2026, firms with permission can give segment-based suggestions under COBS 9B. It isn't personal advice and can't cover safeguarded benefits.

   Why the other options are wrong

   A

   A separate permission is needed.

   B

   It can't be used for safeguarded benefits.

   D

   It isn't personal advice.

5. Question 5 of 5

   Which of these is a Consumer Duty cross-cutting rule?

   Option A: Give advice free of chargeOption B: Treat every customer the same, whatever their needsOption C: Avoid causing foreseeable harm to retail customersOption D: Always recommend the cheapest product

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   The answer is C: Avoid causing foreseeable harm to retail customers

   Firms must act in good faith, avoid foreseeable harm and enable customers to pursue their financial objectives.

   Why the other options are wrong

   A

   Advice can be charged for.

   B

   Fair treatment doesn't mean identical treatment.

   D

   Cheapest isn't required.

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