All RE5 questions
TCF Adhere to the specific Codes of Conduct
A savings product is marketed to pensioners as offering 'steady growth with no surprises'. It is invested mainly in volatile equities and falls 25% in its first year. No advice was given. Which Treating Customers Fairly outcome is most directly breached?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Outcome 6, because the pensioners face barriers when they try to claim
- b) Outcome 5, because it did not perform as customers were led to expectCorrect
- c) Outcome 1, because the firm's board does not care about fairness
- d) Outcome 4, because the advice the pensioners received was unsuitable
Why this is the answer
Outcome 5 requires products to perform as customers have been led to expect. A product marketed as steady that behaves like an aggressive equity fund fails that outcome, and its marketing may also breach Outcome 3. No advice was given, so Outcome 4 is not in point.
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