Question One

a)What is a financial product (FP) and give an example. What is not an FP?

b)What is the fundamental difference between fixed interest security and equity?

Question Two

a)What is money laundering (research what it is) and who has obligations under the legislation?

b)If a reporting entity suspects that one of its clients is engaging in money laundering, what should it do?

Question Three

What is a fiduciary and give examples of the different types of fiduciary relationships?

Question Four

Why is it so important for a financial advisor to understand their fiduciary, common law, and statutory duties?

Question Five

Matt is a famous football player for the Beagles.One day, Rex Legless, Matt's financial advisor, gives Matt some investment advice. Unfortunately, the advice Rex gives proves to be negligent and wrong and as a result, Matt suffers substantial monetary losses. Matt says to Rex, "I am going to sue for you my lost money". Rex replies, "I do not owe you a duty of care, therefore if I do not owe you a duty of care, I cannot have breached the duty and so you cannot sue me".

a)Advise Matt whether Rex owed him a duty of care in relation to the advice he gave? Make sure you use case law to support your answer.

b)Would your answer be different if Ben had asked for the advice at a party when Rex was drunk?

Question Six

How does the law of agency relate to a financial advisor?