Q&A - Autumn 2021

The CII Financial Assess training package tests your knowledge of key financial topics

Question 1

Responsibility for the running of the Financial Services Compensation Scheme (FSCS) lies with which regulatory body?     

A. The Financial Conduct Authority (FCA)     
B. The Financial Ombudsman Service     
C. The Office of Fair Trading     
D. The Prudential Regulation Authority

Question 2

Where there is a lasting power of attorney (LPA), an attorney has which powers to make gifts from the donor’s assets?     

A. Limited powers to make gifts in certain circumstances     
B. None at all unless there a special dispensation from the Court of Protection     
C. Powers granted in the LPA itself     
D. Unrestricted powers

Question 3

What is the maximum compensation that the FSCS will pay in respect of mortgages?     

A. £50,000     
B. £85,000     
C. 100% of any loss     
D. 90% of any loss

Question 4

Which of the following statements is correct as regards a power of attorney?     

A. If the donor subsequently becomes bankrupt, this will have no effect on the power of attorney     
B. It can be revoked by the donor so long as he or she retains full mental capacity     
C. It cannot be revoked upon the donor’s death     
D. It will automatically become invalid after three months from the date it was signed

Question 5

What type of benefit does an income protection policy usually pay?     

A. Lump sum     
B. Regular income and lump sum     
C. Regular income or lump sum     
D. Regular income

Question 6

What is the maximum proportion of earned income that can normally be insured under an individual income protection policy?     

A. 100%     
B. 120%     
C. 30%     
D. 60%

Question 7

Who is responsible for regulating trust-based occupational schemes?     

A. HM Revenue & Customs (HMRC)     
B. The Department for Work and Pensions (DWP)     
C. The Financial Conduct Authority (FCA)     
D. The Pensions Regulator (TPR)

Question 8

What was a deferred self-invested personal pension (SIPP)?     

A. A personal pension in a scheme with wide investment powers     
B. A SIPP subject to delayed investment of contributions     
C. A SIPP which HMRC will not register immediately     
D. A SIPP which incorporates deferred annuity features

Question 9

To what form of income does the zero starting rate apply?     

A. Any taxable income below the zero starting rate band of £5,000.     
B. Taxable earned income below the zero starting rate band of £5,000.     
C. Taxable rental income below the zero starting rate band of £5,000.     
D. Taxable savings income below the zero starting rate band of £5,000.

Question 10

Allowable trustee expenses are first offset against which type of income?     

A. Dividend income     
B. Non-savings income     
C. Rental income     
D. Savings income

Answers

1A. The Financial Conduct Authority has responsibility for the FSCS.

2A. There is limited power to make gifts within a specified range of possible circumstances.

3B. The maximum that is payable in respect of a regulated mortgage where a firm fails after 1 April 2019 is £85,000.

4B. A power of attorney can be revoked during the donor's lifetime. It is automatically revoked upon death, bankruptcy or upon the expiry of a specified time limit included within the document.

5D. Income protection policies usually pay a weekly or monthly benefit.

6D. If the client has a very high income or no earned income, a lower maximum figure could apply.

7D. The FCA does not regulate trust-based schemes, although some of those involved in administration/fund management may be FCA regulated.

8A. A deferred SIPP was effectively a personal pension written in a scheme with wide investment powers.

9D. In the current tax year (2021/22), the zero starting rate applies to the first £5,000 of savings income.

10A. Dividend income.

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