Free RE5 exam questions
Real-style RE5 questions with the correct answer and a full explanation for each one — covering the FAIS Act, the General Code of Conduct, FICA and the wider FSCA regulatory framework. Browse a sample below, then jump into the simulator for 700+ more questions.
Client Onboarding
Code of Conduct
- A broker has contracts with three insurers and may place business only with them. She tells a new client: '…
- A broker receives a client's premium cheque at 16:00 on the Thursday before Good Friday. The following Mond…
- A risk policy provides that the premium will increase every year. What does the General Code require the pr…
- A client instructs her adviser on Monday to buy a large block of a thinly traded share. Expecting the order…
- A representative makes the required product disclosures to a client orally on 14 May, and the client buys t…
- Vusi is a representative who, under his FSP's agreement with one insurer, may recommend only that insurer's…
- A representative recommends product A after a full analysis. The client chooses product B instead, which th…
- An FSP's standard client agreement includes this clause: 'The client agrees that the provider is not bound…
- Which statement about how a provider must make disclosures to a client is INCORRECT?
- In a brochure, an FSP compares its recommended fund with a competitor's fund. Which statement reflects the…
- To save time, a representative asks a client to sign a proposal form that is still blank, promising to comp…
- A client receives the policy summary of a new life policy on 1 March. No benefit has been paid or claimed.…
- A representative prepares a thorough record of advice and files it. When the client asks for a copy, he ref…
- A representative sold a client an endowment five years ago and now advises her to replace it with a new one…
- An FSP holds share certificates in safe custody for a client. The client's estranged husband arrives and as…
- After investigating a complaint, an FSP accepts that its administrative error caused the client a loss of R…
- A funeral policy has a six-month waiting period for death from natural causes. The representative never men…
- An advertisement for a market-linked policy shows a 'projected maturity value of R1.2 million' in large pri…
- On Monday a client emails a clear instruction to switch her investment out of an equity fund. The adviser i…
- A representative working under supervision tells clients that she is 'a senior adviser'. She does not menti…
- A representative tells a client she must sign today or 'lose the special rate', refuses to leave the docume…
- An FSP collects premiums from clients and pays them over to insurers each month. Meanwhile it keeps the mon…
Complaints Management
Conflicts of Interest
- The same product supplier gives a representative a gift worth R800 in December 2025 and another worth R700…
- To recruit an experienced adviser from a competitor, an FSP offers her a once-off payment of R200 000 for j…
- An FSP could place a client's business with either of two suitable insurers. It owns part of one of them. I…
- An insurer's subsidiary, a marketing company, offers a representative a weekend away worth R8 000. The repr…
- Which of these would breach the requirement to avoid or manage conflicts of interest?
Consumer Protection
Ethics
FAIS Act
- Thuli is employed by an FSP. She never recommends products. Her work is to collect clients' monthly premium…
- The Authority receives evidence that an FSP is misappropriating client funds and that every day of delay in…
- Two former licensees want to operate again. Zinhle voluntarily and finally surrendered her licence last yea…
- On 2 April an FSP discovers that a representative has been misleading clients. He resigns on 30 April. The…
- A company FSP has two key individuals and no representatives; the two key individuals deal with all clients…
- The Authority publishes a notice in the Gazette declaring a business practice undesirable. An FSP continues…
- A representative is notified of her debarment on 1 March. The notice contains the full grounds and reasons,…
- Officials of the Authority arrive unannounced at an FSP's office during business hours to carry out a super…
- Mandla is a registered representative of Ubuntu Advisers (an authorised FSP). He issues quotations and conc…
- A representative gives negligent advice that falls squarely within his mandate, and the client suffers a lo…
- Which combination lists events on which an FSP's licence lapses by operation of the Act? i) A sole-propriet…
- An FSP has a head office and two branches. Its licence hangs framed at head office only, and its letterhead…
- While auditing an FSP, the auditor discovers that money in the separate client account has been used to pay…
- Pieter is a sole-proprietor FSP with no representatives. He misappropriates client money. Who has the power…
- An insurer sells its own policies through salaried consultants who meet clients and recommend which of the…
- An FSP is licensed for long-term insurance products only. A long-standing client asks for advice on listed…
- The Authority suspends an FSP's licence for three months. During the suspension the FSP signs up twelve new…
- A top-performing representative resigns to join a competitor. Her FSP is angry that she is taking clients w…
- Before rendering a financial service, what must a representative be able to provide to a client under secti…
- An FSP's financial year ends on 30 June. It submits its annual financial statements to the Authority on 15…
- Nomsa's mandate is limited to long-term insurance subcategory B1. A client asks her to arrange a retirement…
- Which of these are intermediary services under the FAIS Act? i) Concluding a transaction for a client on he…
FAIS Ombud
- A client submits a written complaint to an FSP on 1 February (not a leap year). The FSP does not respond at…
- A client's claim against an FSP would prescribe in two months. She lodges a complaint with the FAIS Ombud,…
- A complainant's loss of R4 million is greater than the monetary limit of the FAIS Ombud's jurisdiction, and…
- Which statement correctly describes the FAIS Ombud's power to award costs?
- A client received advice in June 2019 and realised the same month that it had caused him a loss. He did not…
- Mr Sithole's broker negligently allowed his life policy to lapse. Mr Sithole has since died, and his widow,…
- An insurer repudiates Mrs Nel's claim for non-disclosure. She says her broker filled in the proposal form h…
- The FAIS Ombud receives a complaint and, without sending it to the FSP or asking for its version, issues a…
- A complaint to the FAIS Ombud turns on sharply conflicting versions of a meeting, which can be resolved onl…
- After investigating, the FAIS Ombud makes a recommendation to resolve a complaint about unsuitable advice,…
- An FSP disputes both a licence decision of the FSCA and a determination of the FAIS Ombud. Which body can r…
- A pensioner wants to complain about her adviser but cannot afford legal fees. Which statement about the FAI…
- A client emails her FSP a detailed complaint about poor advice. The representative concerned replies the sa…
- The FAIS Ombud makes a final determination in a client's favour, and the FSP does not seek reconsideration.…
- The FAIS Ombud receives a complaint from a client who has never raised the matter with the FSP concerned. W…
- A client lodges a written complaint with an FSP on 1 February. The FSP acknowledges it the next day but has…
- A client issues summons against an FSP in the High Court, claiming damages for unsuitable advice. A week la…
- An adviser properly assessed a client as an aggressive investor and recommended an equity fund suited to he…
- The FAIS Ombud determines that an FSP must pay a client R300 000. The FSP does not ask for reconsideration…
- An FSP is notified of a final determination of the FAIS Ombud on 2 June. It does not ask for reasons. On 15…
- A client has four grievances. Which one should go to the FAIS Ombud, once her FSP has had the chance to res…
- An FSP decides to reject a client's complaint. The complaints manager phones the client to say 'we don't ag…
FIC Act
- A client makes three cash deposits of R20 000 each at different branches over two days, each time asking st…
- A prospective client is the adult daughter of a foreign head of state. She holds no public office herself.…
- A prospective client wants to invest R300 000 but cannot produce any document that verifies his identity, a…
- An FSP's FIC Act compliance officer resigns. The board decides to leave the post vacant for a year and says…
- An FSP's client agreement contains a strict confidentiality clause. The FSP forms a suspicion that the clie…
- An employee reports a suspicious transaction in good faith. The client is later cleared, learns that a repo…
- When an accountable institution verifies a South African individual's identity, which of these does it typi…
- Which of these is most likely to call for a suspicious transaction report, rather than only a cash threshol…
- A client opened an account in 2015 and closed it in March 2022. The FSP shreds all her due diligence record…
- A representative is unsure whether a new client is a domestic prominent influential person: the client is t…
- Which of these does knowing your client properly achieve for an FSP? i) Verifying who the client is. ii) Un…
- An accountable institution identifies two transactions that must be reported under the FIC Act: a R70 000 c…
- An FSP that is an accountable institution has no written Risk Management and Compliance Programme. Its comp…
- A new client wants to invest R200 000 today. She has no identity document with her and promises to bring it…
- A client wants to invest R90 000 in cash. He arranges for three relatives each to deposit R30 000 in bankno…
- An adviser forms a suspicion about a client's transaction on Monday 2 March. The compliance officer prefers…
- An FSP applies exactly the same due diligence to a pensioner investing R500 a month by debit order and to a…
- Under the FIC Act, which of these can be the 'beneficial owner' of a company client? i) A natural person wh…
- The Financial Intelligence Centre finds that an FSP has breached the FIC Act. Which of these can it impose…
- Four new clients each invest R2 million. For which one does the FIC Act require senior management approval…
- A walk-in client tries to invest R300 000 in banknotes. When the adviser asks where the money comes from, h…
- A new client is the adult son of the serving president of a foreign country. He holds no public office hims…
Financial Products
- A house worth R1 000 000 is insured for R600 000 under a short-term policy subject to average. A fire cause…
- A retiree puts all her savings into a five-year fixed deposit at one small bank. Two years later she needs…
- A car with a market value of R180 000 is insured for R250 000 under a short-term policy and is written off…
- Four representatives each deal in one product only: Asha: funeral policies. Ben: retirement annuities. Cebo…
- An investor holds shares in a single mining company. Her adviser suggests spreading the money across 40 com…
- Mr Dube retires and buys a living annuity with R2 000 000. He asks what annual income he may choose to draw…
- Mrs Khan has two life policies of R1 million and R2 million with different insurers. She also has two house…
- Which statement about a unit trust (a collective investment scheme in securities) is INCORRECT?
- A representative's client asks for advice on four things. On which of them is advice a financial service un…
- Which statements distinguish a discretionary FSP from an advice-only FSP? i) It needs Category II authorisa…
- A client holds units in a unit trust. How is her investment classified under FAIS?
- A client with R20 000 wants exposure to listed shares but cannot afford a spread of individual shares and d…
- A client takes out a long-term insurance policy and, a week after receiving the policy summary, changes her…
- A client asks whether advice on a foreign currency deposit falls under FAIS. Which statement is correct?
- A client took out a recurring-premium endowment policy two years ago. She now wants to make two withdrawals…
- Lerato sells only funeral policies and is therefore exempt from the RE5. Next month her FSP wants her to st…
- A client cancels a 10-year endowment policy after two years and receives back less than the premiums she pa…
- A risk-averse retired client will need her R400 000 in two years' time to buy a smaller home. Which of thes…
- Insurer X issues a life policy. Broker Y recommends it to a client. Administrator Z collects the monthly pr…
- A representative may sell the products listed below. For which of them must he have passed the RE5 within t…
- A representative recommends a structured product that he admits he does not understand, because the supplie…
Fit & Proper
- Refilwe was first appointed as a representative for a Tier 1 product on 1 February 2021. She had neither th…
- When applying to be a representative, Mpho leaves out the fact that a professional body sanctioned him for…
- Vuyo must complete 6 CPD hours per cycle. He completes 4 accredited hours in July 2024 and a further 2 accr…
- An insurer materially changes the benefits and exclusions of a policy that Kabelo has sold for years. Kabel…
- Ayanda is a representative working under supervision while she completes her competence requirements. Her F…
- Sibusiso was first appointed for a Tier 1 product two years ago and has worked under supervision since. He…
- A representative appointed for a Tier 1 investment product holds a BSc in Chemistry at NQF level 7. The qua…
- A Category I FSP that holds no client funds has total assets of R900 000, of which R300 000 is goodwill. It…
- An FSP places new representative Lwazi under the supervision of Nomvula. Nomvula has been with the FSP for…
- Three failures occur at an FSP: 1. A server crash destroys client records and there were no backups. 2. Its…
- An FSP's representatives argue that keeping themselves competent is entirely their own business, and the FS…
- Jabu was first appointed as a representative for a Tier 1 product on 1 July 2019. He passed the RE5 in 2020…
- A representative is convicted of fraud for falsifying invoices in a family business that has nothing to do…
- Which of the following is NOT one of the competence requirements in the Fit and Proper requirements?
- A company is appointed as a juristic representative of an FSP. Its liabilities exceed its assets. The FSP a…
- Priya has ten years' experience advising on short-term insurance. Her FSP now appoints her to advise on inv…
- A representative is appointed to render services on both funeral policies (Tier 2) and retirement annuities…
- An FSP that is an accountable institution has no systems to identify clients or to report suspicious transa…
- A key individual is found liable for fraud in a civil case. He decides not to tell the FSP's board or the A…
- An FSP wants to appoint a promising graduate who has a recognised qualification but has not passed the RE5…
- A representative with a postgraduate degree in finance asks why she must still write the RE5. Which answer…
Key Individual
- A company FSP proposes to the Authority that its key individual should be 'Apex Management Services (Pty) L…
- A growing FSP wants its operations manager to join the existing key individual in overseeing the financial…
- An FSP's sole key individual spent two years focused on a new business venture and left the representatives…
- A company FSP has a CEO who manages its financial services business, a CFO who deals only with finance and…
- Farida is the key individual of a Category I FSP. She also personally advises clients, but only on funeral…
- A consultant is the approved key individual of six unrelated FSPs in four provinces and visits each for one…
- The sole key individual of a company FSP dies unexpectedly. The company continues to trade. Which statement…
- The Authority withdraws its approval of a key individual. The FSP's board wants him to keep running the adv…
- An FSP proposes its top adviser as an additional key individual. She has 15 years' experience advising clie…
- An FSP licensed for long-term insurance has one key individual, whose experience and approval relate to lon…
- Sipho is both a key individual and a representative of a company FSP. The FSP discovers that he misled clie…
- The sole key individual of an FSP takes a six-month sabbatical abroad and cannot be contacted. The represen…
- An FSP appoints a new representative without checking her background. It later emerges that another FSP deb…
- A key individual oversees ten representatives. One of them has failed to keep proper records of advice for…
- Which of these may a key individual of an FSP lawfully do? i) Render financial services to clients as a rep…
- An FSP employs: (a) a representative who advises on unit trusts; (b) a key individual who oversees the repr…
- An FSP proposes to approve its top-selling representative as a key individual. She would carry on selling f…
- Which of these are failures of a key individual's duty to manage and oversee the FSP's financial services?…
- A representative has not given his FSP the annual confirmation that he still meets the Fit and Proper requi…
- An FSP is licensed for Category I and Category II. Its only key individual approved for Category II resigns…
- An external compliance officer prepares an FSP's annual compliance report, which states that all representa…
Licensing
Needs Analysis
Organizational Structure
POPIA
- An FSP wants to email new product offers to (a) its existing clients, whose details it obtained when sellin…
- An FSP stores its client files with a cloud provider. The provider is hacked and clients' identity numbers…
- A former client asks an FSP to delete all the personal information it holds about her. Her policy ended two…
- An FSP collected clients' identity numbers to meet its FIC Act duties. It now wants to run those numbers th…
Professional Development
Record Keeping
- An FSP advised a client on a unit trust in 2016. The client sold the whole investment, and the FSP became a…
- An FSP scans all client documents, stores them in a cloud system and shreds the paper originals. Which stat…
- An accountable institution ends its business relationship with a client on 30 June 2022. The last transacti…
- An adviser gives a client detailed advice by telephone. The client accepts it and the transaction is conclu…
- An accountable institution submits a suspicious and unusual transaction report to the Centre on 10 May 2021…
- A client asks for a copy of the record of advice from a meeting fourteen months ago. The FSP says records a…
- A client's short-term policy, sold in 2019, was cancelled in 2023. In 2024 she complained about how the pol…
- Which of these must an FSP keep as records under the FAIS Act and the General Code? i) Records of the advic…
- An FSP discovers that for two months a representative advised clients on a product he was not registered fo…
- A representative resigns to join another FSP. She wants to take her client files with her, saying: 'They ar…
- A product supplier, a client's adult daughter and an inspector appointed by the FSCA each ask to see a clie…
- An FSCA inspector asks for the records about a representative who left the FSP four years ago. The FSP dest…
- Which of these must a record of advice contain under the General Code? i) A brief summary of the informatio…
- A representative advised a client to buy a living annuity in 2015. The client is still drawing an income fr…
- A representative advises a client by telephone. The FSP keeps a voice recording of the call instead of a wr…
- A client instructs an FSP to buy units in a named fund for her, and the FSP gives no advice at all. The com…
- A representative keeps his clients' needs analyses only in a notebook at his home. The notebook is stolen i…
- An FSP discovers that for two months a representative advised clients on a product he was not registered fo…
- An FSP kept its records of advice in software it stopped licensing three years ago. The files still exist,…
- A representative advised a client on a 10-year endowment policy in June 2014. The policy matured and paid o…
- An FSP's client records are kept electronically. Several staff use one shared login, so nobody can tell who…
Regulatory Bodies
- A client asks the FAIS Ombud to do three things: (1) order the FSP to compensate her for the loss caused by…
- A short-term insurer lets clients buy cover online in five minutes, but requires anyone who wants to cancel…
- A newly appointed compliance officer lists the powers of the Financial Sector Conduct Authority. Which item…
TCF
- A savings product is marketed to pensioners as offering 'steady growth with no surprises'. It is invested m…
- Which of these best shows an insurer meeting Treating Customers Fairly Outcome 2?
- The board of an FSP resolves that Treating Customers Fairly is 'a matter for the representatives at the poi…
- A client was properly advised and bought a suitable investment. Over the next three years the provider stop…
- An insurer markets credit life cover, without advice, to self-employed traders. A large part of the premium…
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