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Before a transaction is concluded, which of the following must an FSP disclose to the client?

RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.

  1. a) The actual fees, charges, commission or other remuneration the FSP or representative will receive.Correct
  2. b) Only the benefits of the product, never its costs.
  3. c) Nothing about cost, since the product supplier handles all disclosure.
  4. d) Only an estimate that may differ wildly from the real charges.

Why this is the answer

The Code requires clear, prior disclosure of the actual costs, fees, charges and remuneration (commission/fees) so the client can make an informed decision. Hiding costs or relying solely on the product supplier breaches the disclosure duty.

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