NZFMA Bridging Test Questions with Correct Answers
Can FO input information in the processing or settlement of transactions? - Answers Yes
What are the broker conduct obligations - Answers § exercise competence that a reasonable
broker would exercise in the same circumstances
§ No misleading or deceptive conduct
§ Don't advertise in a way that is misleading, deceptive or confusing
§ Not to receive client money or client property for the acquisition of a product if that product is
not legal
Is a a call debt security a cat 2 product? - Answers yes it is
What can a RFA provide? - Answers Can provide personalised service to retail clients on cat 2
products
Class service other than DIMS to retail clients
Financial advisor service to wholesale clients
QFE requirements pre and ongoing? - Answers Disclosures pre personalised services
Conduct and care
Ongoing compliance
Advisor business statement
To give digital advice you must - Answers FMA approved exemption
Reg'ed fspr
Approved dispute scheme
What must the QFE disclosure obligation contain? - Answers Name of QFE
Address, tel and email
Info on disputes process
,Contact details of disputes scheme
If other services are provided:
Nature of service
Approvee of said service
Every other matter req. to be disclosed as a condition of QFA
Required disclosures by other financial advisers (not QFE) - Answers The required formcovers
the following:
· Contact details of the adviser
· Sections titled:
o It's important that you read this
o What sort of adviser am I?
o What should you do if something goes wrong?
o How am I regulated
A form of declaration to be signed by the adviser
Personalised service via phone disclosure requirements - Answers Must orally disclose:
What type of adviser they are (RFA, AFA, QFE)
Adviser belongs to approved dispute resolution scheme
name of scheme
any other discl. required by T&C of licence
That the adviser will provide the client with full disclosure if required
Penalties for breach of disclosure obligation - Answers FMA may give the advisor direction
which could be:
· Comply with the disclosure
· List steps the advisor must take in order to comply
· Require the advisor to report how and when the direction will be implemented
Failure to comply = fine of up to $5000
, A person who knowingly or recklessly breaches = fine of up to $100,000 for individuals and
$300,000 for firms
Conduct obligations that apply to all advisors - Answers Exercise reasonable care, diligence and
skill that a reasonable financial adviser would exercise in the same circumstances, taking into
account
· Nature and requirements of client / clients
· Nature and circumstances of the service provided
· Type of advisor
Do not be misleading or deceptive
Do not advertise your service in a way that is misleading deceptive or confusing
AFA conduct obligations - Answers · Comply with code of prof. conduct for AFA's
· Not recommend illegal products
· When providing DIMS:
o Act honestly
o Act in best interests of the client
o Exercise the care, diligence and skill that a competent person would
o Not use information gained through service to gain improper advantage or disadvantage the
client
o Ensure a client agreement and investment authority for the personalised DIMS is in place
o To ensure that client money and property is held on behalf of client by something that meets
the custodian requirements of the FA Act
Comply with T&C of their authorisation
Report breaches to the FMA
QFE conduct obligations - Answers Comply with T&C of their authorisation
No misleading or deceptive conduct
Do not advertise service in misleading, deceptive or confusing manner
Breaches of code for financial advisers penalties - Answers Financial advisers disciplinary
committee may:
Can FO input information in the processing or settlement of transactions? - Answers Yes
What are the broker conduct obligations - Answers § exercise competence that a reasonable
broker would exercise in the same circumstances
§ No misleading or deceptive conduct
§ Don't advertise in a way that is misleading, deceptive or confusing
§ Not to receive client money or client property for the acquisition of a product if that product is
not legal
Is a a call debt security a cat 2 product? - Answers yes it is
What can a RFA provide? - Answers Can provide personalised service to retail clients on cat 2
products
Class service other than DIMS to retail clients
Financial advisor service to wholesale clients
QFE requirements pre and ongoing? - Answers Disclosures pre personalised services
Conduct and care
Ongoing compliance
Advisor business statement
To give digital advice you must - Answers FMA approved exemption
Reg'ed fspr
Approved dispute scheme
What must the QFE disclosure obligation contain? - Answers Name of QFE
Address, tel and email
Info on disputes process
,Contact details of disputes scheme
If other services are provided:
Nature of service
Approvee of said service
Every other matter req. to be disclosed as a condition of QFA
Required disclosures by other financial advisers (not QFE) - Answers The required formcovers
the following:
· Contact details of the adviser
· Sections titled:
o It's important that you read this
o What sort of adviser am I?
o What should you do if something goes wrong?
o How am I regulated
A form of declaration to be signed by the adviser
Personalised service via phone disclosure requirements - Answers Must orally disclose:
What type of adviser they are (RFA, AFA, QFE)
Adviser belongs to approved dispute resolution scheme
name of scheme
any other discl. required by T&C of licence
That the adviser will provide the client with full disclosure if required
Penalties for breach of disclosure obligation - Answers FMA may give the advisor direction
which could be:
· Comply with the disclosure
· List steps the advisor must take in order to comply
· Require the advisor to report how and when the direction will be implemented
Failure to comply = fine of up to $5000
, A person who knowingly or recklessly breaches = fine of up to $100,000 for individuals and
$300,000 for firms
Conduct obligations that apply to all advisors - Answers Exercise reasonable care, diligence and
skill that a reasonable financial adviser would exercise in the same circumstances, taking into
account
· Nature and requirements of client / clients
· Nature and circumstances of the service provided
· Type of advisor
Do not be misleading or deceptive
Do not advertise your service in a way that is misleading deceptive or confusing
AFA conduct obligations - Answers · Comply with code of prof. conduct for AFA's
· Not recommend illegal products
· When providing DIMS:
o Act honestly
o Act in best interests of the client
o Exercise the care, diligence and skill that a competent person would
o Not use information gained through service to gain improper advantage or disadvantage the
client
o Ensure a client agreement and investment authority for the personalised DIMS is in place
o To ensure that client money and property is held on behalf of client by something that meets
the custodian requirements of the FA Act
Comply with T&C of their authorisation
Report breaches to the FMA
QFE conduct obligations - Answers Comply with T&C of their authorisation
No misleading or deceptive conduct
Do not advertise service in misleading, deceptive or confusing manner
Breaches of code for financial advisers penalties - Answers Financial advisers disciplinary
committee may:
