CeMAP FRE2 The Advice Framework: Clients, Disclosure, Charging & Vulnerability question: broker's management information shows

CeMAP FRE2The Advice Framework: Clients, Disclosure, Charging & Vulnerability

A broker's management information shows that customers who disclose a health condition are twice as likely as other customers to end up with a product that does not match their stated needs. What does the Consumer Duty require?

A Nothing more, provided each customer had a suitability check at the time of sale
B Stop accepting customers who disclose health conditions, to prevent further harm
C Report each affected customer to the Financial Ombudsman Service within 8 weeks
D Investigate why that group gets worse outcomes and take action to fix it

Show the answer and explanation

Answer: D. Investigate why that group gets worse outcomes and take action to fix it

PRIN 2A.9.10R requires firms to identify whether any group of retail customers is getting different outcomes from others, and PRIN 2A.9.12R requires appropriate action where it does; FG21/1 expects outcomes for vulnerable customers to be as good as for others. A sale-by-sale check is not enough when the data shows a pattern. Refusing such customers would itself cause harm, and the Financial Ombudsman Service handles complaints, not firm reports.

Common mistake

Thinking individual suitability checks satisfy the Duty even when group data shows harm.

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Study note: The Advice Framework: Clients, Disclosure, Charging & Vulnerability CeMAP FRE2practice questions & mock exams

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Original practice material mapped to the published CeMAP FRE2 learning outcomes. Independent, not endorsed by Walbrook (formerly LIBF). Verify figures and rules against current guidance before relying on them.