Strategy, Governance and Leadership
Strategy
Strategy sets direction and allocates resources. Candidates must understand environmental analysis, competitive positioning, customer segmentation, distribution strategy and portfolio management. Know the difference between corporate, business and functional strategy, and the role of risk appetite in strategic decisions. Growth, profitability and capital efficiency must be balanced.
Governance
Governance defines how decisions are made and controlled. Know the role of the board, committees, executive management and the three lines of defence: business operations, risk and compliance oversight, and internal audit. Understand board independence, diversity, succession planning and the duty of directors to act in the best interests of the company.
Leadership
Leadership involves setting culture, tone from the top, ethical conduct and stakeholder management. Candidates should understand change management, performance management and the importance of psychological safety and accountability.
Traps in questions
A common trap is confusing the three lines of defence with three departments; the model is about assurance, not structure. Another is assuming the board manages day-to-day operations; it oversees and delegates. Questions may also test whether strategy is separate from risk appetite; it is not.
Worked example
A firm pursues growth in a new segment. The board must assess strategic fit, risk appetite, capital, controls and customer outcomes before approval. The correct answer integrates strategy and risk.
Exam technique
Frame answers around direction, governance, controls and outcomes.
Professional Ethics and Conduct
Ethical frameworks
Professional ethics require integrity, objectivity, competence, confidentiality and professional behaviour. Candidates must understand the difference between legal compliance and ethical conduct; conduct can be legal yet unethical. Know the role of codes of conduct, conflicts of interest, gifts and hospitality policies, and whistleblowing.
Fair treatment of customers
Fair treatment includes clear communication, suitable products, fair pricing, prompt claims settlement and accessible complaints handling. Vulnerable customers require additional care. Treating customers fairly is a conduct outcome, not a tick-box process.
Traps in questions
A frequent trap is assuming that disclosure alone resolves a conflict of interest; avoidance or management may be required. Another is treating a bonus or incentive as acceptable merely because it is disclosed. Questions may also test whether confidentiality can be breached for regulatory reporting; it can, where required by law.
Worked example
An adviser is offered an expensive gift by a product provider. Disclosure may not be sufficient; the firm's gifts policy may require refusal or registration. The ethical answer prioritises customer interest and independence.
Exam technique
Identify the ethical principle, the conflict, the stakeholder and the appropriate action. Use the language of integrity, objectivity and fair outcomes.
Practical note
Ethical culture is reinforced by incentives, leadership example and consistent enforcement.