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Code of Conduct Adhere to the specific Codes of Conduct
A representative recommends product A after a full analysis. The client chooses product B instead, which the representative considers riskier. Besides warning the client, what does the General Code require about the record?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The record of advice should be rewritten to show product B as the product that was recommended.
- b) The record of advice should be replaced by an indemnity signed by the client in favour of the provider.
- c) The record should reflect what was recommended and that the client chose differently.Correct
- d) No record of advice is needed, because the client did not act on the advice that was given.
Why this is the answer
The provider must keep a record of the advice actually given and the basis for it, and where the client elects a different product must alert the client to the risk and advise particular care. Recording those facts protects both parties. Rewriting the record to match the outcome would falsify it, and an indemnity cannot replace Code obligations.
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