Chapter 8

Question 1 of 14

1

If a client wanted to make additional contributions to an occupational pension scheme, which of
the following options would give him the greatest choice of provider and a say in how the
funds are invested?

Select one of the following:

  • Non-contributory occupational scheme

  • Contributory occupational scheme

  • Freestanding Additional Voluntary Contributions

  • Additional Voluntary Contributions

Explanation

Question 2 of 14

1

Which of the following is likely to be the MOST important consideration when selecting the
most appropriate protection product for a client?

Select one of the following:

  • The level of the premium and charges

  • The financial strength of the provider

  • The quality of the service provided

  • Investment choice and performance

Explanation

Question 3 of 14

1

What type of information is contained in a Key Features Document?

Select one of the following:

  • A clear description of the financial product being recommended to the client

  • Cancellation rights if a client changes their mind about investing in a product

  • All product recommendations listed in the financial plan and the reasoning behind them

  • Taxation implications for all the products listed in the financial plan

Explanation

Question 4 of 14

1

Where the proposer and the life assured are different people under a life policy, the policy:

Select one of the following:

  • provides cover on a joint life basis

  • was taken out on someone else's life

  • owner holds power of attorney status

  • was arranged by a financial adviser acting independently

Explanation

Question 5 of 14

1

What is the MAIN purpose of a power of attorney document?

Select one of the following:

  • It appoints someone to distribute the assets of a deceased person

  • It enables ownership of property to transfer from one person to another person

  • It allows one person to conduct specific transactions on behalf of another person

  • It entitles one trustee to override the demands of another trustee

Explanation

Question 6 of 14

1

Which of the following would MOST likely be found in a formal written report presenting
recommendations to a client?

Select one of the following:

  • Details of family and dependants

  • The tax implications on the client's position

  • Details of the client's occupation, earnings and other income sources

  • A summary of the client's assets and liabilities

Explanation

Question 7 of 14

1

Where funds are to be set aside to provide for the future financial maintenance of a disabled
child, this can normally be achieved through the establishment of a legal document called a:

Select one of the following:

  • codicil

  • trust

  • grant of representation

  • power of attorney

Explanation

Question 8 of 14

1

What lump sum must someone aged 35 invest today given an assumed annual growth rate of
7% if they are to accrue a lump sum of £450,000 at the age of 65?

Select one of the following:

  • £14,018

  • £59,115

  • £64,285

  • £420,560

Explanation

Question 9 of 14

1

Who controls the assets of a trust and looks after the property for the person or persons who
will ultimately benefit from it?

Select one of the following:

  • Benefactors

  • Beneficiaries

  • Creditors

  • Trustees

Explanation

Question 10 of 14

1

John is worried that he will be unable to work due to a heart attack. Which of the following
would enable him to claim if he had a severe heart attack?

Select one of the following:

  • Critical Illness cover

  • Permanent Health Insurance

  • Mortgage Protection

  • Accident, Sickness & Unemployment cover

Explanation

Question 11 of 14

1

What are two advantages of investing in an offshore trust?

Select one of the following:

  • Less complex product and only local taxes apply

  • Privacy and flexibility for the client

  • Security and a less complex product

  • Privacy and only local taxes apply

Explanation

Question 12 of 14

1

When giving financial advice on the subject of protection, it is important to quantify a client's
assets to:

Select one of the following:

  • determine whether the costs can be offset against tax liabilitie

  • establish what shortfall may arise if an insured event occu

  • ensure that the underwriters have sufficient information

  • identify the client's appropriate risk profile

Explanation

Question 13 of 14

1

A client in the UK was granted lasting power of attorney in relation to his elderly mother. Why
did this facility fail to provide him with control over her financial affairs after she was deemed
to have lost her mental capacity?

Select one of the following:

  • She was over retirement age when her poor state of mind was first diagnosed

  • He was her adopted son

  • She only granted him health and welfare powers

  • He was operating a power of attorney for his father at the same time

Explanation

Question 14 of 14

1

John is taking out a life insurance policy on Mary, his wife, and one for himself. Which of the
following statements is TRUE once the policy is in force?

Select one of the following:

  • John is the life assured

  • Mary is the life assured

  • Mary is the proposer

  • They are both the life assured

Explanation

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