CeMAP FRE2 Ethics, Professional Standards & CPD question: product's exit fee

CeMAP FRE2Ethics, Professional Standards & CPD

Priya is told that hiding a product's exit fee from a client would make no difference to the outcome, because the client will never redeem early. She still discloses it, saying 'the client has a right to know'. Which approach is this?

A Deontology, because she treats disclosure as a duty whatever the outcome
B Consequentialism, because she expects disclosure to improve the client's outcome
C Ethical egoism, because disclosure protects her from a later complaint
D Utilitarianism, because disclosure produces the greatest good overall

Show the answer and explanation

Answer: A. Deontology, because she treats disclosure as a duty whatever the outcome

Deontological (duty-based) ethics holds that some actions are right or wrong in themselves, whatever their consequences (FSRE spec v7 FRE2 AC8.1). Priya accepts that disclosure will not change the outcome and discloses anyway because the client has a right to know, which is duty-based reasoning. Consequentialism and utilitarianism would judge by outcomes, which she has set aside. Ethical egoism would justify the act by her own interest, which she does not give as her reason.

Common mistake

Assuming any honest act must be justified by its outcomes.

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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.