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Client Onboarding Best Practices FAIS Act
A client refuses to tell the representative anything about her income, debts or other investments, but insists on buying a particular unit trust. What does the General Code require of the representative?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Explain that the advice may not be appropriate without the information, and record this.Correct
- b) Have her sign a waiver of the suitability provisions, and then proceed with the purchase.
- c) Process the purchase as normal, because her refusal ends his duties under the Code.
- d) Refuse to deal with her, because no service may be rendered without a full needs analysis.
Why this is the answer
Where a client declines to give the information needed for a proper analysis, the provider must explain that this may limit the appropriateness of the advice and that the client should take particular care, and must record it. The Code does not forbid the transaction, the duties do not simply end, and a client may not be asked to waive rights under the Code.
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