IiSA - The Knowledge Web viewMark each correct answer by shading in either the true or false option or select the correct answer from the list of available options by clicking on or

Pre Assessment for RPL, Blended learning or Full Training

Pre Assessment to Ascertain Knowledge and Expeience Levels

For Blended Learning / Full Program_____________________________________________________________

Name ID Number Organisation Occupation Contact Details

E-mail Phone Fax

_____________________________________________________________

2 Hour On line Closed Book Assessment

Overall Assessment Decision( For completion by Assessor)Description %

75 - 100% Excellent – BL: NOE65 - 75% Very Good – BL: NOE / SS60 - 65% Good – BL: SS/CBT50 - 60% Fair – BL: SS/CBT/Full Prog.Less than 50% - BL: CBT/Full Prog.The above are dependent on timein the industry.

1. Ethics, Compliance & Legislation

2. Economic Environment and Risk

3. Technical Skills – Need analysis

4. Technical Skills - Retirement

5. Technical Skills – Tax & Estates

6. Technical Skills - Investments

Average

Comments

7. CCFO

8. Financial Advice Experience

9. Range of experience in financial services

Program: Choose

Signature: _________________________ Date: ________________Assessor: Raymond StrodlNumber: 0A1300513

© Ray Strodl 11 April 2014 Page 1


KNOWLEDGE QUESTIONSMark each correct answer by shading in either the true or false option or select the correct answer from the list of available options by clicking on or lightly shading the correct option. Please only choose ONE option as multiple choices could result in a loss of marks.1 Ethics, Compliance and Legislations

1. The following professional bodies are involved with financial advice and advisers and one of them is an industry body that controls the life insurance offices. Identify this one.

A FPIB LUASAC IBCD ASISA

2. Which of the following actions would be acceptable in terms of the FAIS code of conduct

A Any amount of commission or fee is acceptable as long as the client signs and agrees to the fee.

B You can give client advice even if you employed or controlled by a specific product provider, provided you advise the client of this relationship before they make the decision.

C You can send your letter of introduction setting out your affiliations and qualification at any time in the process as long as they get it before the policy document

D It is acceptable to accept gifts and incentives from product providers to give them more business.

3. Which of the following role players would NOT be effected by the FAIS Act.

A Financial Planner or RepresentativeB Financial Service ProviderC Call Centre agent who provides advice and information on a

life assurance companies productsD A Chartered Accountant who prepares the financial statements

for a small consultants business.

4. The FSP, who holds a licence with the Financial Services Board, is accountable to the Financial Services Board for the implementation, control and monitoring of compliance in accordance with the applicable legislative requirements. The role of the FSP is to provide the consumer with appropriate financial advice.

True False



5. Money laundering is a term used to describe ‘a number of techniques, procedures or processes in which funds obtained through illegal or criminal activities are converted into other assets. This is done in order to conceal their true origin, ownership or any other factors that may indicate an irregularity. The main objective of money laundering is to change the nature of the funds so that they appear to be from a legitimate source which forms part of the formal economy’.

True False

6. Which categoriy of client is recognised in terms of FICA

A Client you have only done a will.B Client you have met a party of social event.C Client with whom you have developed a professional

relationship.D Client with whom you have played golf

7. If a representitive identifies a suspicious transaction they must report this to:

A SA Police Financial BranchB Financial Intelligence CentreC The ScorpionsD You companies internal money laundering officer, compliance

manager, internal audit or duly authorised individual.

8. The South African Reserve Bank (SARB), the country’s central bank, formulates and implements monetary policy, using interest rates as a tool in managing this policy

True False

9. Which of the following systems of marriage are recognised in SA in terms of the SA Constitution and other subordinate legislation.

A Legal marriage in or out of community of property.B Traditional Marriage including polygamyC Religious marriage including multiple wives in terms of Islamic

and other religious ritesD all of the above

10. Which of the following regulators is not involved in retirement fund products?

A Pension Fund AdjudicatorB FAIS OmbudC FSBD Medical Council

Q1 Marks % Result Comment /10 % Not done



Mark each correct answer by shading in either the true or false option or select the correct answer from the list of available options by clicking on or lightly shading the correct option. Please only choose ONE option as multiple choices could result in a loss of marks.

2 Economic Envoronment, Current Affairs and Risk

1. During the boom phase there is still an increase in demand and the demand may outweigh the supply. This trend leads to an increase in production costs and consumer prices which may lead to more goods being imported and to an Interest rates rise to curb the increase in consumer prices (inflation).

True False

2. Which of the following statements are correct?

A Disinflation is a increasing rate of inflationB Inflation affects the value of money. It is a continuous decline

in the value of money over a period of time. In other words, inflation is the rate at which the price of goods generally increase, expressed as a percentage.

C Deflation is when average prices rise across an economyD The (CPI) is an index of share prices in a representative

‘average’ South African household.

3. Which of the following would not be used as economic indicator that would have an effect on the SA economy and would effect your advice to the client?

A Head line Inflation or CPIXB The clients personal risk profileC Rand / dollar exchange rateD Prime Rate

4. The uncovering of the ENRON scandal led to the following reactions form the market and authorities:

A Share holders lost money but the directors and management got off scott free.

B The auditors closed down due to their reputation being irreparably damaged and investigations were instituted into the directors and management. As it was suspected that information in financial reporting had been incorrectly reported to make the business appear to be in a better financial situation.

C This event was simply the failure of a business entity and while shareholders may have lost money, no investigations were undertaken or required.

D The Enron failure was simply due to world economic events.



5. When researching financial service commentary and opinions to prepare your self to give clients balanced and professional financial advice you should:

A choose the latest guru or expert and follow their advice as this is the cutting edge opinions.

B only follow the advice and direction given by the government and the SA Reserve Bank as they set the financial policy for the country.

C NEVER follow the advice and direction given by the major companies commentators as they are biased and this advice would be flawed.

D read and research the views of a broad range of financial commentators – gurus, journalists, government and major companies - take their obvious bias into account and formulate a balanced opinion of your own.

6. Which of the following organisations would be considered a professional body rather than an industry regulatory or membership body?

A FPIB FSBC ASISAD LUASA

7. Which of the following events or situations were responsible for the many changes we are seeing in the financial services industry today

A SA ConstitutionB The rise of consumerism in SAC Clients losing money due to poor advice or incompetent

advisersD All of the above.

8. Clem Sunter used scenario planning in the 80’s to examine possible political scenarios for South Africa. These were used by business and other bodies to investigate what could possibly happen to SA in the future and to use this information to make plans for these possible future scenarios .

True False



9. Which of the following statements about scenario planning would be less true?

A Scenarios are stories about what the future environment may hold and how the financial advisor may respond to this.

B By carrying out scenario planning, the financial advisor is in a better position to make strategic planning decisions for both himself and his clients.

C Scenario planning will allow the financial adviser to predict the future.

D The main aim of scenario planning is to describe different outcomes that can be generated by the same set of facts if different options are chosen.

10. If you were conducting research into the risks attached to various financial services in SA which of the following sources would be least useful?

A The FSB WebsiteB The CIS WebsiteC The INSETA WebsiteD The LOA Website

11. Which of the following risks to the professional financial planner would be the most difficult to quantify or manage?

A Legislative or Regulatory RiskB Economic RisksC Reputational RiskD Investment Risk

12. Which of the following economic indicators would be considered to be international rather than national?

A ALSIB NIKKEI DOWC GDPD CPIX

13. Which of the following statements is correct?

A The GDP will give you an indication of the general deposit rates in the market.

B The REPO rate at which repositions have increased in the economy.

C The Prime Rate is the rate at which banks will lend to their prime clients.

D Headline Inflation is the inflation rate for companies rather than individuals.



14. Which of the following factors would be used to help to develop an idea of a clients risk profile?

A The current investment instruments the client is currently using.

B The maximum length of time the client can invest for or the required level of liquidity.

C The client’s age.D All of the above.

15.Which of the following events would NOT be considered as political events that could present a financial risk or opportunity?

A Result of a general election which results in a change of government.

B A senior member of the government being found guilty of fraud.

C FAIS legislation and the implementation of the Ombud systemD Trade unions taking a more militant line to encourage the

government to modify their policies.

Q 2 Marks % Result Comment /15 % Not done




3 Technical Skills – Marketing and Financial Needs Analysis

1. Which of the groups in the following stages of their financial life cycles would be spending capital rather than creating or saving capital?

A Middle aged – married no children B Young unmarriedC Retired – married or singleD Young married and expecting their first child

2. Which of the following financial services products would probably not meet the needs of a young couple with children?

A Compulsory or voluntary annuityB Unit Trusts or collective investment schemeC Endowment PolicyD Savings account

3. An individual who is analytical will make decisions quickly if you avoid providing too much detail and only provide a compelling bottom line reason for changing?

True False

4. Which of the following statements is correct?

A Understanding social styles will enable you to ascertain exactly what your clients needs are with out having to ask questions.

B Understanding the social style of your clients will allow you to manipulate them more effectively.

C Under standing your clients social style will help you in developing and sustaining a professional relationship with your clients.

D Social styles are just another useful sales technique.

5. Which of the following is an incorrect description of the various social styles characteristics?

A Driver is focussed and wants to succeedB Analytical is a very warm and animated individual.C Amiable is a warm people person who wants to be likedD Expressive enjoys meeting new people and speaks a lot.



6. After consultation with Paul Smith, you have worked out that he would need a monthly income of R5 000 in the event of his wife’s death in order to supplement his income and make up for the loss of hers. If the interest rate on a bank saving account is 10%, what capital sum does he need from a life assurance policy in order to provide the required R5 000 per month?

A R1 000 000B R600 000C R900 000D R400 000

7. Use the rule of 72 to caculate what return would you need to achive compounded to double a capital sum in a maximum of 5 years?

A 10% per annumB 12% per annumC 15% per annumD 17% per annum

8. If a client wants to invest an amount monthly to save an amount in a 3 to 5 year term which of the following would you suggest?

A Savings account with a bankB Unit trust or collective investment schemes investmentC An endowment policy with an insurance companyD A living annuity.

9. The FAIS Act requires one of the following when a financial adviser provides financial advice?

A A full financial anlysis of all aspects of the clients situation must be done in every instance.

B A needs analysis can be waived if the client signs a documentC A relevent financial needs analysis should be done which

places the client in a position to make an infirmed decision.D A needs analysis is not required if the clients needs are simple.

10. If a client has a bond of 100 000 at a rate of 11% and has an extra R1000 per month available to save for the next 5 years until they retire, would you suggest they do which of the following?

A Save this in a savings account with the bank getting the best money market rate avalable

B Use this as an extra payment on their bond to reduce the termC Invest this in a guaranteed fund using an endowment policy

which can be used to pay off the bond at retirement.D Make use of a high return but high risk equity fund to get the

best possible return over the next 5 years





4 Technical Skills – Retirement Plannning

1. You are advising a client on investing for their retirement in 25 years time and economic forecasts are for low interest rates due to a slight increase in inflation caused by excessive borrowing in the economy to purchase goods. You would suggest a guaranteed or smooth bonus portfolio for this investment?

True False

2. The pension fund act applies to pension fund and provident funds but would not apply to retirement annuities as these would fall under the Long term Insurance Act

True False

3. Which of the following organisations or individuals would not be responsible for or directly controlled by retirement fund governance in terms of the regulations.

A The Pension Fund AdjudicatorB Board of Trustees in terms of section 7A-7E and the duties and

responsibilities of the BoardC The Life Offices Association (LOA)D The Financial services Board (FSB)

4. Which of the following statements would not be true in relation to pension funds?

A A pension fund must be approved by the receiver of revenve.B Members funds in a pension or provident fund attract no

income tax liability when in the fundC The lump sum from a pension, provident or retirement annuity

may be taxed at average rates after the tax free portion has been calculated

D A member of a pension or provident fund may move their funds from the fund to a preservation fund on resignation from the company and the fund.

5. Your client who is 61 years old, has a retirement annuity that they took out some time ago which is not reulation 28 compliant and is invested in 100% equity fund. If they had extra funds of R1500 per month to invest. You would recommend they do which of the following?

A Increase the contributions to this fund as they will not be able to invest 100% equity in another type of retirement fund

B Immediately change this fund to a regulation 28 compliant fund as this type of investment is no loonger allowed.



C Invest the extra funds in a separate fund and not make any changes to this fund as this will require it to be changed to regulation 28 compliance.

D Invest in an endowment fund as this would not need to be regulation compliant.

6. Which of the following investments would be used to invest the 2/3 portion of a pension fund at retirement to provide a pension?

A Retirement annuityB Voluntary Living annuityC Compulsory annuityD Income protection plan

7. Which of the following funds would probably be regulation 28 compliant?

A Balanced fundB Property FundC Off shore fundD Equity fund which provides guarantees

8. Which of the following would be used to ensure that the capital from a pension fund is retained until retirement should the client become unemployed due to retrenchment?

A EndowmentB Retirement annuityC Preservation fundD All of the above

9. If a client is invested in a provident fund which of the followiung would apply to his contributions?

A All his contributions would be subject to a tax saving in his hands

B No contributions to the provident fund is tax deductableC Contributions to a provident made by the employer are tax

deductable in their hands.D 15 % of non retirement fiunding income would be tax

deductable in the employees hand.

10. Which of the following funds would a pension or provident fund be invested in?

A The untaxed fundB The Coprpoate fundC The individual policy holders fundD The corporate policy holders fund





5 Technical Skills – Tax, Estates, Wills and Trusts

1. Which of the following investment options would be the most tax efficient options for a client who wants to invest a R100 000 for the next 5 years, who is currently in a 40 % marginal tax rate and has utilised his full interest exemption.

A Participation Mortgage BondsB 5 year Fixed DepositC Government StockD General Equity Unit Trust

2. Which of the following types of investment would provide the lowest after tax return in the hands of the client.

A BondsB Money marketC EquitiesD Notice deposits

3. A client has a endowment policy maturing after 5 years and the proceed will taxed in the following way:

A The capital portion will be tax free but the income is taxed at average rates.

B The proceeds of an endowment is exempt of tax as it has been taxed in terms of the 4 fund approach.

C The proceed will be taxed at marginal rates in line with the 6 th

schedule of the income tax act.D The proceeds are tax free as the funds were invested for 5

years or longer.

4. Which are the following statements is falseA Interest income up to R25000 is deductibleB The SA tax system is residence based. C The SA tax return is called an IT12D PAYE and SITE tax deducted and paid by a company is shown

on the IRP 5 which is submitted to the receive as proof of payment.

5. Which of the following would be used to allow the heir use of an asset on the death of a person while ownership resides in another individual?

A Fide Commissum.B Bare dominium.C Usufruct.D Intervivos trust.



6. Assets left to the spouse will be subject to a section 4Q deduction and would not be subject to estate duty?

True False

7. Which are the following statements is falseA Income from a non discretionary trust would be taxed in the

hands of the beneficiaryB All trusts are taxed at the same rate irrespective if the

beneficiary of the trust is a human individual or a corporate individual

C Last expenses – medical and funeral are deductable when calculating estate duty

D Dividend income in a non discretionary trust would be exempt in the hands of the beneficiary

8. The client has R2m invested off shore in equites. Which of the following would apply to the taxation of the dividends from these investments?

A They are exempt as they are off shore dividendsB The first R3000 may be exempt but the balance would be fully

taxable in SAC All diends are exemptedD None of the above

9. All estate have which of the following amounts as the maximum abatement when calculating estate duty?

A R3 000 000B R3 500 000C R7 000 000D R4 000 000

10. An endowment in the name of an individual, paid by the client as a savings to one day start their own business would be in which of the following funds?

A The untaxed fundB The Coprpoate fundC The individual policy holders fundD The corporate policy holders fund





6 technical Skills – Investment Planning

1. Which of the following investment solutions would provide the client with regular income with the capital portion of the income being exempt?

A EquitiesB Voluntary annuityC Compulsory annuityD Living annuity

2. Which of the following investment options would be considered a low risk investment for a longer term

A Blue Chip shares or equitiesB Gilts or Semi giltsC PropertyD Futures or option

3. Which of the following asset classes would be used to provide stability and security to a portfolio

A JSE Shares or Equities B Property – Commercial or IndustrialC Stocks – Gilts and Semi GittsD Derivatives - Futures and Options

4. Which of the following asset classes would not usually be found in a balanced fund?

A EquitiesB PropertiesC Interest Bearing InvestmentsD Hard Assets

5. Which of the following portfolios would carry the least investment risk for the client?

A Managed FundB Balanced FundC Equity Linked FundD Smooth Bonus Fund

6. The first tier of classification of collective investment schemes is as follows. Mark the one which does not apply



A Domestic – at least 85% of the fund is in SAB World Wide – minimum of 30% in SAand max of 30% offshoreC Foreign – at least 85% outside SAD International – at least 30% on SA 30% in EU and 30% in

USA

7. Which of the following regulators is responsible for the control and regulation of foreign exchange transactions in SA ?

A The Financial Services BoardB The SA Reserve BankC The Department for Foreign AffairsD The Department of Finance

8. Which of the following would you expect to recover more quickly after an investmnent crash?

A Property portfolioB Bond and money market portfolioC Actively managed equity portfolioD Passive or value managed portfolio

9. Which of the following invesrtment types would you consider to be the most high risk?

A EquitiesB Specialist EquitiesC Forex dealingD Derivative trading

10. Which of the following investment portfolios would provide the possibility of high returns with the possibility of losses in the short to meduim terms?

A Money market fundB Activly managed bond funds C Passivly managed equity fundsD Regulation 28 compliant funds




Evaluate your self and answer the following about these critcal cross field outcomes

1. When analysing or solving problems for clients do you?

A Use the analysis tools provided by the company or industry to analysise problems and suggest solutions

B Make us of technology and applications to analyse clients needs.

C Able to use Macros in excel to compute complex financial calculations

E Makes use of a fiunancial caculator to do complex cash flow and compoud interest calculations for my clients

2. Would you say that you fall in which of these following categories?

A I am a lone wolf and like to do things for myselfB I make use of specialist when required C I am part of a financial services team made up of

adminstration, underwrites and specialists.D I a team leader and very strong at motivating and encouraging

others in my team so that we can deliver best advice to our clients.

3. How well do you organise and manage your activities and ensure you meet deadlines and achieve your goals?

A I am able to do this is I have the support of a strong administrator and team

B I ensure that I am surrounded by effective and effeicent team members who help with administration and compliance

C I am excelllent at meeting deadlines and achieving goals and have set up checks and balances to ensure this.

D This does not apply to my position as a financial adviser

4. Which of the the following is used to keep up to date with changes and developments in the market and industry?

A I keep up date by reading newspapers and listeing to the news daily.

B I make use of technology to keep up to date with changes in the industry and economy.

C My company provides me with a wealth of informtion about the economy and innovations in the business and this is my main resource.

D I have a network of commentators I keep in touch with using technology and social media which provide me with a broad range of opinions and views on current affairs and how this will impact on my investment clients.

5. Communication is propably one of your stronger skills and which of the following best describes your communications skills?



A I am very good at on to one discussions, with very good questioning and listening skills and able to make complex investment and financial produsts undertandable to my clients.

B I am very good at undertanding my clients needs and then use a wide range of communication strategies to ensure they undertand the situation and solutions I am suggesting.

C I use a wide range of communcation startegies which include one on one interviews, presentations and written explanations to support the financial advice I give to my clients

D I make use of structured interviews, written reports, presentations, newsletters and social media to communicate with my clients and keep them up to date with changes that would be important to their investment and financial strategies.

6. When gathering information to help keep my clients up to date I make use of the following strategies?

A Do not give clients too much information as this may confuse them and result in them making unsound decisions.

B I like to keep my clients up to date with changes in the industry and economy that impact on thiei invesrment and financial decisions

C My clients nees are quiet simple and they do not require regular information and input on what is happening in the market and industry

D If I do not keep up to date with the latest information and changes my sophisticated clients will end up knowing more than me about what is happeing in the industry and martket.

7. When dealing with people of other cultures and beliefs the following would best describe my situation?

A I work with a wide range of people and am able to get on with all sorts of people and understand sufficient to never give offense or cause an emarresment.

B My market is multi cultural and I make it my business to understand the various peoples cultures and behaviours.

C I can read an write in my home language and can converse in one other official language

D I can speak more than 3 of this countries official languages

8. Which of the following best describes your relationship with technology?

A I can use technology needed to do my job but I do not love working with computers.

B I can use word processors, spread sheets, email and the internet for personal and business, making use of social media

C I am able to use MS Office products better than most individuals at my office and can use macros to program and automate documents

D I love technology and have always been involved in cutting edge developments. I can program or set up my personal



networks and like to use new software and technology at work and at play to give me an edge

Q 7 Marks % Result Comment / % Not done



1. Which of the following best describe your involvement in protecion planning?

A Involved in basic life insurance and funeral policies – Cat BB Give advice on life insurance and lump sum disabilityC Give advice on life insurance, lump sum disability, income

disability and dread disease insurance to individualsD Give advice on life insurance, lump sum disability, income

disability, dread disease insurance and professional cover to self employed individuals and companies

E I do not do protection planning

2. Which of the following best describes your involement in retirement planning?

A I do not do retirement planningB I sell the occaional retirement annuity and provide advice on

planning for retirementC I sell retirement annuities and advice on planning with

lumpsums at retirement.D My main focus is on planning for investment at retirement.E My main focus is on employee benefits and providing advice to

companies group on benefits

3. Which of the following best describes your involvement in estate planning and wills?

A I do not do estate planning or wills for my clients. These are passed on to a wills and trust specialist

B I do wills for my clients using will forms and these are then drafted by an estates specialist who then deal with the client.

C I do wills and trusts for my clients making use of an estate specialist but remain involved with the client in this areas and get wills signed.

D I am a wills , trust and estate planning specialist.

4. Which of the following best describes your involvement in investment planning?

A I do not do any investment planningB I only do monthly savings plans for my clients using

endowments, unit trusts or retirement annuities for my clients but do not do lump sum investments.



C I do monthly savings and lump sum investment for my clients and provide advice on use of funds and managers to meet the clients investment needs and risk profile.

D Most of my focus is on lump sum investment planning and I provide advice on use of managers, funds and products that will best meet their investment needs and risk profile.

E I help my clients to manage their investment protfolios by providing advice on tax, investments, risk, the market and strategies that will help them to achieve their investment goals.

5. Which of the following best describes your involvement in business assurance?

A I do not do business assurance as I only deal with individualsB I provide advice on a range of business assurance, which

includes buy and sell, parntership insurance, keyman and other busines policies.

C I am involved in business assurance which includes conforming and non conforming poicies, debt redemtion plans and group benefits

D I am involed in group benefits, pensions and medical planning for companies and trade unions and very rarely deal with individual clients.




1. How long have you been involved in the financial services industry?

A 1 year or lessB 2 to 4 yearsC 5 years or moreD 10 years or more

2. Which of the following areas of the financial services industry have been employed in during your time in the industry. You may choose as many as you need?

A Funeral poicies and basic life Insurance Cat BB Life insurance and disability Cat CC Endowments and retirement annuities – monthly savings Cat CD Unit Trusts and Collective Investments schemesE Lump sum endowments and annuitiesF Wills, Trusts and Estae PlanningG Personal Line insuranceH Commercial Line InsuranceI Medical Aids and health insuranceJ Banking products

3. Which best describes your highest education level?

A Matric or NQF level 4 in financial servicesB 30+ Credits towards level 5 in financial servicesC 60+ cerdits towards level 5 in financial servicesD 90+ credits towards level 5 in financial servicesE Full qualification(120 credits or more) at level 6 that is not

relevent to financial services

4. Do you use any of the following social media and applications?

A FaceBookB TwitterC Linked InD SkypeE DropboxF Other



5. Give a short description of your current position with your current employer?

6. Give a short description of your existing qualifications – certified copies of these certificates must be submitted?

7. Any comments or information you feel would be relevent?



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IiSA - The Knowledge Web viewMark each correct answer by shading in either the true or false option or select the correct answer from the list of available options by clicking on or