Ethics
Core concepts
Ethics questions test integrity, fairness, transparency, due skill and care, conflicts of interest, confidentiality, know-your-client, and suitability. Know the six ethical principles commonly examined: integrity, objectivity, competence, confidentiality, professionalism, and fairness.
Understand inducements/commission disclosure, best execution, complaints handling, and treating customers fairly (TCF). Know market abuse, insider dealing, and whistleblowing basics.
Traps
- Assuming disclosure alone resolves a conflict - it must be managed or avoided.
- Confusing suitability (fits the client) with appropriateness (client understands the product).
- Forgetting that confidentiality continues after the relationship ends.
- Overlooking that commission can create a conflict requiring disclosure.
Rule of thumb
Ask: Would I be comfortable if this advice were published? If not, it likely breaches integrity or fairness.
Worked example
An adviser recommends a product paying higher commission when a cheaper equivalent exists. Even with disclosure, this breaches the duty to act in the client's best interest - the recommendation must be justified on suitability, not remuneration.
Pension Trustee Practitioner
Core concepts
Trustee questions test fiduciary duties, scheme governance, investment powers, funding, member communications, and conflict management. Know the trust deed and rules, statement of investment principles, actuarial valuation, funding standard, and scheme wind-up priorities.
Understand trustee duties: act in members' best interests, invest prudently, keep records, disclose information, and manage conflicts. Know employer covenant, contribution schedules, and regulator powers. Distinguish discretionary from mandatory trustee decisions.
Traps
- Assuming trustees can prioritise the employer's interests - members come first.
- Forgetting conflicts of interest must be declared and managed.
- Confusing actuarial valuation (funding) with investment performance reporting.
- Overlooking member communication duties (benefit statements, event-driven disclosures).
Rule of thumb
Trustees must act as a prudent person would, in the best interests of members, with due care and skill.
Worked example
A trustee who is also a company director faces a conflict when the employer proposes reduced contributions. The conflict must be declared, the trustee should not vote, and an independent assessment of the scheme's funding position should inform the decision.