Professional Paraplanner’s TDQ (Training, Development and Qualifications) series, is run in conjunction with key support providers, such as Brand Financial Training, and aims to test your knowledge of the financial services market, as part of your overall training goals and exam techniques.
The following questions, which can also be found in our September 2022 issue, relate to examinable Tax year 20/21, examinable by the CII until 31 August 2022.
You will find the answers separately under the Development Zone tab on the Professional Paraplanner website.
Questions
1. Under the status disclosure rules, what should an adviser confirm to a retail client on first contact where advice or arrangements in packaged products are contemplated?
Tick all that apply.
A. How to complain
B. The firm’s regulatory status
C. Investment objectives
D. Withdrawal rights
2. Disinflation typically occurs when:
A. prices are declining over time and the rate of inflation becomes negative.
B. the supply of goods rises faster than the supply of money.
C. there is a decrease in the rate of inflation.
D. buying power of money is reduced.
3. Henry is planning to move to Switzerland. Which of the following tax planning strategies relating to his investments should he consider? Tick all that apply.
A. Move bank accounts offshore to avoid any potential liability to UK income tax
B. Dispose of any gilt-edged securities as the income is taxable
C. Withdraw any ISA investments as they will lose their tax-free status
D. Dispose of any assets that will produce a loss and postpone the disposal of any assets that will produce a gain
4. A contract-based pension scheme has which advantage over a trust-based pension scheme?
A. Member contribution refunds for early leavers
B. Member contributions deducted from gross pay before tax and National Insurance contributions are applied
C. Less costly and time-consuming administration
D. Protection for the members, with their interest being safeguarded by Trustees
5. Which of the following is disregarded for long term care purposes according to the Care Act 2014?
A. Insurance (investment) bonds
B. Capital redemption bonds
C. Individual Savings Accounts
D. Unit trusts
6. Money supply is the quantity of money available within the economy. The most commonly quoted measures of money supply in the UK are M0 and M4. What is the difference between M0 and M4?
A. M4 is ‘broad money’ and includes bank/building society deposits that have been created through their lending activities.
B. M0 is ‘broad money’ and includes deposits lodged by savers.
C. M4 is the more commonly quoted measure of money supply in the UK.
D. M4 reflects changes in the economic cycle, and M0 causes changes in the economic cycle.
7. The term given to a collection of services provided by investment banks to their hedge fund clients and other asset management boutique firms is known as
A. prime brokerage.
B. stock-lending.
C. service provision.
D. financing.
8. Under the Care Act 2014, in England after paying domiciliary care an individual must be left with an amount equal to:
A. the basic State pension or new State pension depending on their age
B. the weekly personal expenses allowance
C. the rate of income support or Pension Credit they are eligible for
D. the rate of personal independence payment or disability allowance they are eligible for
9. Which of the following statements regarding the key elements of MCOB’s definition of a lifetime mortgage is false?
A. Borrowers should be above a certain age
B. There may or may not be a mortgage term
C. Repayment can be sought at any time
D. Potential deferral of interest repayments
10. Vera and Ken are a couple in their mid-fifties in need of a capital lump sum to replace the company car Ken has just lost due to redundancy. They are considering taking out a second mortgage to release some of the equity they have in their home. They should be aware that:
A. when they sell their property, it will be paid off first.
B. the second mortgage will usually carry lower interest rates.
C. their home is not at risk with a second charge mortgage.
D. when they sell their property, the first charge is paid first.
