QFA Regulation common mistakes
QFA Regulation · Understand the traps and how to avoid them.
Classifying a unit-linked life policy under one rulebook only - answering conduct-of-business questions as if the product were governed purely by MiFID II, or purely by the Consumer Protection Code / insurance distribution rules.
The syllabus teaches products module by module, so candidates tag each product to a single regime and then apply that regime to every question about it, even where a life-wrapped investment attracts overlapping obligations.
What to do instead
Build a one-page classification grid: product type down the side, rulebooks across the top (CPC, MiFID II, insurance distribution regulations, MCC), and a tick where each obligation bites. Answer every scenario question by first locating the product on the grid.
Drafting a statement of suitability / reasons-why that simply restates the product's features and charges, with no reference to the client's stated needs, no rejected alternatives, and no risks.
Product features are the easiest content to revise and the most heavily tested elsewhere, so candidates default to describing the product instead of evidencing the advice process.
What to do instead
Practise five-mark answers on a fixed skeleton: client's needs and circumstances as recorded - options considered and why rejected - why this product and provider - costs, charges and risks - how and when it will be reviewed. Never write a feature unless it is linked to a recorded need.
Treating the intermediary as the decision-maker when a client complains about a life policy - telling the client the broker will adjudicate, or that the Central Bank of Ireland will decide the complaint and award redress.
Because the intermediary sold the product, candidates blur the seller's handling obligations with the insurer's contractual liability and with the regulator's supervisory role.
What to do instead
Learn the escalation chain as a sequence: internal complaints procedure of the regulated entity, acknowledged and progressed within the Consumer Protection Code timeframes, then referral to the Financial Services and Pensions Ombudsman. Note explicitly that the Central Bank supervises firms and does not adjudicate individual complaints or award compensation.
Attributing pension obligations to the wrong body - for example saying the Central Bank approves scheme rules, that Revenue polices trustee governance, or that the Pensions Authority sets the tax relief limits.
Pensions sit under several regimes at once (trust law and the Pensions Act, Revenue tax approval, and Central Bank conduct rules for the distribution side), and candidates memorise the rules without memorising who owns them.
What to do instead
Draw a three-column regulator map (Pensions Authority / Revenue / Central Bank) and write beside each entry the specific duty it owns. Before answering, ask: is this question about scheme governance, tax approval, or how the product was sold?
Assuming the funding, contribution and access rules are the same across a PRSA, an occupational scheme, an AVC and a personal pension, and answering transfer questions without checking preserved-benefit and statutory transfer entitlements.
The vehicles share vocabulary (contributions, retirement age, tax relief) but differ in who sets the limits and in what the member is entitled to on leaving service, so one set of rules gets generalised across all of them.
What to do instead
Build a comparison grid with one row per vehicle and columns for who sets contribution limits, how relief is given, employer obligations, and what happens on change of employment or on transfer. Answer transfer questions by first identifying the scheme type at each end.
Using 'suitability' and 'appropriateness' interchangeably, and treating an execution-only route as available for any instrument the client asks for.
Both concepts are described as 'know your client' checks, so the distinction between advice-driven assessment and a narrower warning-based test is lost, as is the non-complex instrument condition.
What to do instead
Use a decision tree in every answer: is there a personal recommendation or discretionary management (suitability)? If not, is an appropriateness assessment required, and is the instrument non-complex and eligible for execution-only? State the consequence of failing each test, not just its name.
Assuming client categorisation (retail, professional, eligible counterparty) or a signed acknowledgement removes the firm's conduct obligations, or that costs and charges need only be disclosed once at the point of sale.
Categorisation is taught as a labelling exercise, and initial disclosure is easy to remember because it leaves a document trail; the continuing obligations that survive opt-up are rarely rehearsed.
What to do instead
Produce two lists: what changes on opt-up and what does not. Produce a disclosure timeline showing what must be given before, at and after the transaction (including periodic reporting of costs and charges), and quote the obligation in each answer rather than the label.
Answering consumer household or motor insurance disclosure questions using the old utmost-good-faith framework - saying the insurer can automatically avoid the policy for any non-disclosure - instead of applying the consumer duty to answer questions honestly and with reasonable care and the graduated remedies that follow.
Legacy study notes and general insurance folklore still frame disclosure as a single all-or-nothing doctrine, and the statutory reform is comparatively recent.
What to do instead
Learn the remedy ladder as a sequence keyed to the state of mind: innocent, negligent (proportionate remedy), reckless (avoidance with premium refund). Then practise stating which remedy applies before explaining the reasoning, and always distinguish consumer from non-consumer contracts first.
Assuming that because a commercial client is a business, status disclosure, remuneration disclosure and conflicts-of-interest management do not apply, and omitting them from commercial placement scenarios.
Candidates associate conduct rules with 'consumer' protection language and therefore assume commercial equals unregulated, rather than checking whether a specific exemption actually applies.
What to do instead
Keep a list of obligations that are client-type dependent and a list that apply regardless of client type. In commercial questions, state the client's category first, then name the disclosure or conflict obligation and say whether an exemption is being relied on and why.
Applying ordinary non-life or life underwriting logic to private medical insurance - accepting individual risk rating, refusing renewal on claims history, or ignoring community rating, open enrolment, lifetime cover and minimum benefit requirements.
PMI is taught inside the general insurance family, so candidates carry across rating and renewal assumptions that the health insurance regime specifically prohibits.
What to do instead
Memorise the four pillars of the health insurance regime (community rating, open enrolment, lifetime cover, minimum benefit) plus the risk equalisation scheme, and in every PMI scenario test the proposed insurer action against each pillar before answering.