When a client is advised to replace one financial product with another, what must the provider disclose before the transaction is concluded?

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

1. a) Both the actual and the potential financial implications, costs and consequences of the replacement.Correct
2. b) Only the actual costs already incurred, since future costs are too uncertain to mention.
3. c) Only the potential future costs, since past costs are no longer relevant.
4. d) Neither, provided the client signs a waiver acknowledging the replacement.