Customer Knowledge Assessment (CKA) vs Customer Account Review (CAR)

Concept

Before a customer buys a Specified Investment Product (SIP), the FA must first check whether that customer has the knowledge or experience to understand the risks of such products. This gatekeeping check comes in two flavours that split on whether the product is unlisted or listed: the Customer Knowledge Assessment (CKA) applies to unlisted SIPs, and the Customer Account Review (CAR) applies to listed SIPs. Crucially, both are eligibility/knowledge gates, not the same thing as suitability advice — passing a CKA/CAR does not mean the product is suitable, and the separate suitability duty still applies whenever advice is given.

Key rules & facts

• CKA — for unlisted SIPs. A customer qualifies (passes) via any of: relevant educational qualifications; relevant work experience (verify: e.g. ≥3 years in a relevant financial field); or sufficient investment experience (verify: e.g. ≥6 transactions in specified products in the past 3 years).
• CAR — for listed SIPs. Uses comparable education / work experience / trading experience tests appropriate to listed products.
• Pass → the transaction may proceed with normal disclosure. Fail or lack of knowledge → the FA must provide advice on suitability; on execution-only channels, the FA must at minimum give the customer the opportunity to receive advice, or let them proceed only after explicit warnings / opt-out acknowledgements.
• The assessment outcome can be relied on for up to 1 year (verify) before a fresh assessment is needed.
• CKA/CAR is separate from and additional to the suitability duty — a "pass" never removes the obligation to give suitable advice when advising.

Key data

Exam angle

Situational — given a product (listed or unlisted) plus a customer profile, pick CKA vs CAR and then state the pass/fail consequence. Watch for execution-only wrinkles where a "fail" still lets the customer proceed after warnings.