CeMAP 1 Advice Skills & the Fact Find Practice Questions
Advice Skills & the Fact Find makes up 4 of every 40 questions on a Tigertest CeMAP 1 practice test. Here are 10 of the 20 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on LIBF's FSRE (CeMAP Module 1) syllabus for FRE1 and FRE2. Original questions; case studies written as single questions. Not affiliated with LIBF or Walbrook Institute London.
1. Which is an example of 'hard facts' gathered in a fact find?
- A.Feelings about debt
- B.Gross annual income
- C.Attitude to risk
- D.Plans to retire early
Answer: B. Hard facts are objective and checkable, such as income, age, debts and outgoings. Attitudes, priorities and plans are soft facts.
2. Which is an example of 'soft facts' gathered in a fact find?
- A.Monthly loan payments
- B.Current mortgage balance
- C.Date of birth
- D.The client's priorities
Answer: D. Soft facts are the client's views, feelings, priorities and plans. They are harder to measure but just as important to a suitable recommendation.
3. Which question is an open question?
- A.How do you feel about debt?
- B.Is your income over budget?
- C.Are you employed full time?
- D.Do you have any children?
Answer: A. Open questions invite a full answer and draw out soft facts. Closed questions, answerable yes or no, are useful for confirming hard facts.
4. Repeating back a summary of what the client has said, to check it is understood, is an example of:
- A.Upselling
- B.Execution-only sales
- C.Active listening
- D.Closed questioning
Answer: C. Summarising and reflecting back shows the client they have been heard and confirms the adviser has understood. It is part of good communication.
5. Why should an adviser identify a client's needs before discussing products?
- A.So no fact find is needed
- B.So the client signs sooner
- C.So the advice fits the client
- D.So the firm can earn more fees
Answer: C. Needs come first; products are then matched to them. Starting from a product risks a sale that does not suit the client.
6. A client's capacity for loss refers to:
- A.Ability to absorb falls in value
- B.Their emotional attitude to risk
- C.The size of their cash deposit
- D.How much they want to invest
Answer: A. Capacity for loss is a financial measure: how far the client's lifestyle would suffer if investments fell. Attitude to risk is how comfortable they feel with risk.
7. Before making a recommendation, an adviser checks a client's stated income against payslips. This is part of:
- A.Researching products
- B.Building rapport with the client
- C.Closing the sale
- D.Verifying the information
Answer: D. Advisers check that what the client says is plausible and, where needed, evidenced. Income evidence is central to responsible mortgage lending.
8. Which is the best order for the advice process?
- A.Review, gather facts, recommend, analyse
- B.Gather facts, analyse, recommend, review
- C.Recommend, gather facts, analyse, review
- D.Analyse, recommend, review, gather facts
Answer: B. Advice starts with information, then analysis of needs and options, then a recommendation, followed by ongoing review where agreed.
9. An 'insistent client' is one who:
- A.Keeps changing to a new adviser
- B.Goes ahead against the advice
- C.Asks a great many questions
- D.Refuses to give any information
Answer: B. An insistent client chooses a different course from the recommendation. The adviser must make the risks clear and record that the client is acting against advice.
10. When a client insists on a transaction the adviser has advised against, the adviser should:
- A.Refuse ever to deal with them again
- B.Report the client to the FCA
- C.Change the advice to match theirs
- D.Record the advice and the choice
Answer: D. Clear records show the advice given, the risks explained and the client's own decision. The transaction must not be presented as the adviser's recommendation.
Practice all 20 advice skills & the fact find questions, and the rest of the 200-question bank, in the free CeMAP 1 training sets. Questions you miss come back until you have mastered them.
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