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Under the General Code, before concluding a product purchase based on advice, what must the representative provide regarding the basis of that advice?

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

  1. a) A record of advice setting out the basis on which the recommendation was made.Correct
  2. b) A signed photograph of the representative.
  3. c) A copy of the FSP’s annual financial statements.
  4. d) Nothing, because the product brochure replaces all advice records.

Why this is the answer

The Code requires a record of advice that sets out the basis on which the recommendation was made — the information relied on, products considered, and reasons for the recommendation — so the client can understand and, if needed, challenge it.

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