All RE5 questions
Financial Products Apply knowledge of the financial products and services environment
When advising on a product, a representative must explain the consequences of early termination, such as penalties or lost benefits. This disclosure exists chiefly to ensure the client understands:
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The detail of the FSP’s internal audit programme.
- b) Their contractual rights and obligations, including the cost of getting out early.Correct
- c) The representative’s CPD obligations.
- d) The terms of the FSP’s professional indemnity cover.
Why this is the answer
Disclosing early-termination consequences lets the client grasp the contract's terms and the financial impact of exiting early — essential to an informed decision. It is not about the FSP's audits, the representative's CPD, or the firm's PI policy.
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