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Conflicts of Interest Code of Conduct
Which action by an FSP would breach the requirement to avoid or manage conflicts of interest?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Steering all clients into an in-house product that pays the FSP more, regardless of suitability, without disclosure.Correct
- b) Disclosing an ownership link to a product supplier and managing it under a policy.
- c) Recommending the most suitable product after a proper needs analysis.
- d) Declining a gift that could influence advice.
Why this is the answer
Pushing clients into a more profitable in-house product regardless of suitability, without disclosure, is an unmanaged conflict. Disclosing links, recommending suitable products and declining influencing gifts are all compliant behaviours.
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