Prevention is Better Than Cure

CPD Assessment: Multiple Choice Questions

Instructions

This assessment contains 10 multiple choice questions based on the BareRock guide Prevention is Better Than Cure: A Comprehensive Guide to Complaint Prevention in Financial Advice. Select one answer for each question.

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After a poorly performing investment, a client contacts their adviser and says “I always had a feeling this wasn't right for me”. At the time of the original advice, the client had expressed no reservations whatsoever. Which cognitive bias best explains this?

Overconfidence bias

The Fundamental Attribution Error

Hindsight bias

Impression management

An adviser makes an administrative error due to an unusually busy period. The client, unaware of this context, concludes the adviser is careless and incompetent. The adviser, by contrast, views it as an isolated mistake caused by external pressure. Which theory explains this difference in perception?

Hindsight bias

The Ebbinghaus forgetting curve

Impression management

The Fundamental Attribution Error

A client understood their pension advice at the point of sale. Five years later, with no review meetings in between, they cannot recall why certain decisions were made and believe they were never explained. Which psychological principle best explains this?

Motivated reasoning

The Ebbinghaus forgetting curve

Cognitive dissonance

Overconfidence bias

What are the three pillars of complaint prevention identified in the guide?

Documentation quality, regulatory compliance and claims management

Ongoing engagement, client understanding and satisfaction monitoring

Annual reviews, suitability reports and proactive disclosure

Adviser training, complaint procedures and file management

Which one of the following accurately reflects the FCA's regulatory definition of a complaint?

A written allegation of financial loss submitted within six years of the advice

Any formal dispute referred to the Financial Ombudsman Service

Any expression of dissatisfaction alleging loss, distress or inconvenience, whether justified or not

A complaint about advice suitability supported by documentary evidence

Firms have historically struggled to use the FCA's three-day rule for swift complaint resolution. What is the primary reason for this?

The FCA removed the three-day rule and replaced it with the eight-week deadline

Traditional PI insurance conditions required insurer notification before resolution, typically exceeding three days

Most complaints cannot be resolved within three days due to their complexity

The three-day rule only applies to complaints referred by claims management companies

What specific problem does BareRock's Policy Clause 4.2 solve ?

It extends the three-day window to five days for complex complaints

It removes the need to notify the insurer for complaints below a set financial value

It allows firms to resolve complaints within the excess without prior insurer approval, enabling use of the three-day rule

It requires template wording for all Financial Ombudsman Service referrals

A client makes a complaint, receives a prompt and empathetic response and feels genuinely heard throughout the process. Research suggests what outcome is possible?

The client is more likely to refer to the Financial Ombudsman Service due to raised expectations

The client may become more loyal than if the complaint had never arisen

The client will accept a lower financial settlement than they would otherwise have sought

The complaint is more likely to be resolved without a formal final response letter

The guide recommends firms treat the eight week regulatory deadline as an absolute maximum. What timeframe does it suggest firms should aim for in most cases?

Two weeks

Three weeks

Four Weeks

Six Weeks

Which one of the following is not identified in the guide as a factor that accelerates memory fade in financial advice?

Information overload during the advice meeting itself

The low day-to-day visibility of financial products once purchased

Personal stress, health issues or significant life changes during the advice process

The technical complexity of the adviser's professional qualifications