CMFAS RES5 MAS Guidelines question: WealthCo promote itself

CMFAS RES5MAS Guidelines

WealthCo Advisory is a wholly-owned subsidiary of a life insurer and recommends, among others, its parent's policies. It pays its representatives no product-biasing commission and represents six providers per class. May WealthCo promote itself as 'independent'?

A Yes — it represents six providers per class, which is comfortably above the minimum of four that is required
B Yes — it pays its representatives no product-biasing commission, which settles the question
C No — its connection to its parent insurer, a product provider, creates a conflict that defeats independence
D Yes — as a subsidiary it is a separate legal person, so its parent insurer's business is irrelevant

Show the answer and explanation

Answer: C. No — its connection to its parent insurer, a product provider, creates a conflict that defeats independence

Regulation 21(1)(iii)/FAA-G05 requires the adviser to operate without any conflict of interest created by a connection to, or association with, a product provider. WealthCo's ownership by an insurer whose products it recommends is exactly such a conflict, so it cannot be independent even though it satisfies the commission and four-provider limbs.

Common mistake

Passing the commission and four-provider tests does not cure a conflict arising from association with a product provider.

Practise more RES5 MAS Guidelines questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: MAS Guidelines CMFAS RES5practice questions & mock exams

Answer: C. No — its connection to its parent insurer, a product provider, creates a conflict that defeats independence

Common mistake

Passing the commission and four-provider tests does not cure a conflict arising from association with a product provider.

Practise more RES5 MAS Guidelines questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public CMFAS RES5 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.

CMFAS RES5 MAS Guidelines question: WealthCo promote itself

Answer: C. No — its connection to its parent insurer, a product provider, creates a conflict that defeats independence

Common mistake

Related CMFAS RES5 questions

CMFAS RES5 MAS Guidelines question: WealthCo promote itself

Answer: C. No — its connection to its parent insurer, a product provider, creates a conflict that defeats independence

Common mistake

Related CMFAS RES5 questions