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On 30 October a client accepts Tebogo's proposal, which includes a recommended financial product and a separate loyalty/rewards programme that lowers the product's cost. Tebogo gave the advice orally. To comply with FAIS, what must he do?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Confirm the oral advice on the financial product in writing on or before 30 November (within 30 days).Correct
- b) Confirm everything in writing by 7 November.
- c) Confirm nothing in writing, because the loyalty programme makes the whole transaction exempt.
- d) Confirm only the loyalty programme in writing, since that is what saves the client money.
Why this is the answer
The 30-day written-confirmation duty attaches to the advice on the financial product, so written confirmation is due by 30 November. The loyalty/rewards programme is not itself a financial product, but that does not shorten or remove the duty in respect of the financial product advised on.
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