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FAIS Act FAIS Act and Subordinate Legislation
Which statement about the difference between 'advice' and an 'intermediary service' under FAIS is correct?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Advice is a recommendation/guidance of a financial nature about a specific product, while an intermediary service involves acting between client and product supplier (e.g. concluding or maintaining a transaction).Correct
- b) They are exactly the same thing with two names.
- c) Advice is unregulated while intermediary services are regulated.
- d) Intermediary services may only be rendered by product suppliers, never by FSPs.
Why this is the answer
Advice is a recommendation or guidance about a specific financial product; an intermediary service is acting between the client and product supplier — for example concluding, varying or maintaining a transaction. Both are regulated financial services, and FSPs may render intermediary services.
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