Try 10 focused CISI UK RPI questions on Complaints and Compensation, with answers and explanations, then continue with Securities Prep.
| Field | Detail |
|---|---|
| Exam route | CISI UK RPI |
| Issuer | CISI |
| Topic area | Complaints and Compensation |
| Blueprint weight | 3% |
| Page purpose | Focused sample questions before returning to mixed practice |
Use this page to isolate Complaints and Compensation for CISI UK RPI. Work through the 10 questions first, then review the explanations and return to mixed practice in Securities Prep.
| Pass | What to do | What to record |
|---|---|---|
| First attempt | Answer without checking the explanation first. | The fact, rule, calculation, or judgment point that controlled your answer. |
| Review | Read the explanation even when you were correct. | Why the best answer is stronger than the closest distractor. |
| Repair | Repeat only missed or uncertain items after a short break. | The pattern behind misses, not the answer letter. |
| Transfer | Return to mixed practice once the topic feels stable. | Whether the same skill holds up when the topic is no longer obvious. |
Blueprint context: 3% of the practice outline. A focused topic score can overstate readiness if you recognize the pattern too quickly, so use it as repair work before timed mixed sets.
These questions are original Securities Prep practice items aligned to this topic area. They are designed for self-assessment and are not official exam questions.
Topic: Complaints and Compensation
A retail client transferred £30,000 to an FCA-authorised investment platform to buy a fund the next day. The cash was being held as segregated client money under CASS. Before the purchase was made, the platform failed, and administrators confirmed a shortfall in the client money pool. Which FSCS outcome is most likely?
Best answer: C
What this tests: Complaints and Compensation
Explanation: The deciding factor is who failed and why the loss arose. Here, the failed firm is an authorised investment platform holding client money under CASS, so the claim is most likely an FSCS investment claim rather than a deposit claim.
FSCS protection depends on the category of claim against the failed authorised firm. In this scenario, the loss arises because an FCA-authorised investment platform failed while holding the client’s money as segregated client money, and there is a shortfall in that pool. That points to an investment-related protected claim.
It is not mainly a deposit claim, because the relevant failure is not a bank or building society being unable to repay a deposit owed to the client. The fact that the asset was still cash does not change the category where the loss stems from an investment firm’s client-asset failure. Nor is a completed fund purchase required; a shortfall in safeguarded client money can itself give rise to a protected investment claim. A FOS decision is also not a prerequisite for FSCS to consider a claim against a defaulted firm.
The key takeaway is to identify the failed firm and the source of the liability, not just the form of the asset.
Because the loss arises from a failed authorised investment firm’s client-money shortfall, it is most likely treated as an FSCS investment claim.
Topic: Complaints and Compensation
For Financial Ombudsman Service purposes, what is an eligible complainant?
Best answer: C
What this tests: Complaints and Compensation
Explanation: An eligible complainant is someone within the categories permitted to use the FOS, such as a consumer and some smaller non-consumer bodies. This is a gateway issue: the FOS cannot consider every complaint from every customer.
The key concept is complainant status. Before the FOS looks at the substance of a complaint, it must be satisfied that the person or entity bringing it falls within a permitted category, commonly a consumer and, in some cases, smaller businesses, charities, or trusts that meet the scheme criteria. That is what makes someone an eligible complainant.
This is different from simply being a customer of an authorised firm. FOS jurisdiction also depends on other factors, such as whether the complaint is about a business and activity covered by the scheme, but eligibility of the complainant is one of the main threshold tests. A protected claim is an FSCS compensation concept, not the FOS eligibility test.
The closest distractor is the idea that any customer can complain, but FOS access is narrower than that.
These are examples of complainant categories that can fall within the FOS scheme, subject to the complaint meeting the jurisdiction rules.
Topic: Complaints and Compensation
A retail client phones her adviser on Monday to complain that a recommended fund switch caused an unexpected exit charge. The firm’s policy says any oral or written expression of dissatisfaction about a regulated activity must be recorded when received. If it is not resolved by the close of the third business day after receipt, it must be referred to the central complaints team for formal handling. By Friday morning, the client is still unhappy and no resolution has been agreed. What is the best next step?
Best answer: D
What this tests: Complaints and Compensation
Explanation: The complaint should already have been recorded when first made, even though it was made by phone. As it remains unresolved after the close of the third business day, the correct process step is escalation to the firm’s formal complaints function.
The core issue is complaint recognition and internal escalation. In UK complaint handling, an oral expression of dissatisfaction about a regulated activity can be a complaint and should be logged when received. The firm’s stated policy then creates a clear timing trigger: if the matter is still unresolved after the close of the third business day, it must be passed to the central complaints team for formal handling. By Friday morning, that trigger has been reached, so internal referral is the correct next step.
A summary resolution approach only fits complaints resolved within the stated short timeframe. Referring the client straight to the ombudsman or waiting for a written complaint would bypass the firm’s required process.
Because the complaint is oral, valid on receipt, and still unresolved after the third business day, it must move into the firm’s formal complaints process.
Topic: Complaints and Compensation
A retail client telephones a UK investment firm to complain that advice on switching her Stocks and Shares ISA into a higher-risk fund was unsuitable. The adviser cannot resolve the issue by the end of the next business day. Under the firm’s complaint procedure, unresolved complaints at that point must be escalated, acknowledged promptly in writing, and answered finally within eight weeks. What should the firm do next?
Best answer: B
What this tests: Complaints and Compensation
Explanation: A complaint about regulated advice can be made by telephone; it does not need to be in writing. Because the firm has not resolved it within the stated initial period, it must follow its complaint procedure: log and escalate the matter, acknowledge it promptly in writing, investigate, and provide a final response within eight weeks.
The core concept is that a firm must have and follow a proper complaints procedure for eligible complainants. Here, the client is a retail customer complaining by telephone about regulated investment advice, so the complaint is valid even though it is oral. Because it remains unresolved after the stated initial period, the firm should record it, pass it to the appropriate complaints function, send prompt written acknowledgement, and investigate fairly and competently. It then needs to issue a final response within the stated eight-week period, or if it still cannot conclude the matter, send a written update explaining the delay and the client’s right to go to the Financial Ombudsman Service. Waiting for a letter, delaying until loss is known, or bypassing the firm’s process would not meet the procedure.
This follows the stated complaints procedure for an unresolved oral complaint about regulated advice.
Topic: Complaints and Compensation
A retail client complains to an FCA-authorised investment firm that unsuitable ISA advice led her to switch into a higher-risk fund. The firm rejects the complaint in its final response, and she refers it to the Financial Ombudsman Service within six months. If the Ombudsman upholds the complaint, what is the single best answer?
Best answer: C
What this tests: Complaints and Compensation
Explanation: The Financial Ombudsman Service can do more than say whether a complaint is fair. If it upholds an eligible complaint, it can require the firm to pay compensation and can direct practical steps to put the customer back in the position they should have been in.
The key point is that the Financial Ombudsman Service is a dispute-resolution body, not a regulator imposing disciplinary sanctions. Here, the complaint concerns regulated investment advice to a retail client, the firm has issued a final response, and the matter has been referred to FOS, so the Ombudsman can determine the complaint. If the complaint is upheld, the Ombudsman may make a money award for financial loss and, where appropriate, distress or inconvenience, and may also direct the firm to take practical steps to put matters right, such as correcting records or reconstructing the customer’s position.
If the customer accepts the Ombudsman’s decision, it becomes binding on the firm. By contrast, fines and permission changes are regulatory tools, and FSCS is for failed firms or unmet claims, not routine complaint adjudication.
The Ombudsman can make a money award and direct the firm to take practical remedial action.
Topic: Complaints and Compensation
A retail client phones a UK investment firm to complain that an adviser persuaded her to switch her ISA into a higher-charge product. She is recently bereaved and says she struggles with paperwork. The adviser disputes her account, and the firm has not yet issued a final response. What is the most appropriate response by the firm?
Best answer: C
What this tests: Complaints and Compensation
Explanation: The firm should treat the phone call as a complaint immediately and handle it fairly. Because the client is vulnerable and the adviser is implicated, the matter should be reviewed independently and communicated in a clear, supportive way.
The core issue is ethical complaint handling: acting with integrity, treating the customer fairly, and avoiding barriers to redress. A complaint does not need to be in writing, so the firm should log the call straight away. Because the client is recently bereaved and struggling with paperwork, the firm should adapt its communication to her needs. Since the adviser is directly involved in the events complained about, an impartial review is important to avoid conflicts and maintain trust.
A sound response would:
The closest distractor is informal resolution by the adviser, but that risks pressure, bias, and poor governance.
A verbal complaint must be handled promptly and fairly, with an impartial review and suitable support for a vulnerable retail client.
Topic: Complaints and Compensation
Harbour Arts is a UK charity with annual income below the FOS eligibility limit. It received investment advice from an FCA-authorised wealth manager about placing its reserve funds, then complained in writing about unsuitable advice. Nine weeks later, the firm has still not issued a final response. What is the single best answer?
Best answer: B
What this tests: Complaints and Compensation
Explanation: An eligible charity can complain to the FOS about a regulated activity carried out by an authorised firm. Here, the charity is below the stated eligibility limit, the complaint is about investment advice, and the firm has had more than eight weeks to respond, so the complaint can be referred.
FOS jurisdiction depends on the complainant being eligible, the complaint relating to a matter within jurisdiction, and the firm having had the chance to deal with it first. Harbour Arts meets those conditions. A charity below the relevant FOS income limit can be an eligible complainant. The respondent is an FCA-authorised wealth manager, and investment advice is a regulated activity. The charity has already complained to the firm, and nine weeks have passed without a final response, so it does not need to wait any longer before referring the matter to the FOS.
The main trap is thinking the FOS is only for private individuals or that a final response is always required; under these facts, neither point prevents jurisdiction.
It is an eligible complainant, the complaint concerns regulated advice by an authorised firm, and more than eight weeks have passed.
Topic: Complaints and Compensation
An FCA-authorised consumer-credit broker has sent near-identical final responses rejecting 250 complaints from retail clients about undisclosed fees. The cases are now with the Financial Ombudsman Service, which believes the issue may be causing widespread consumer harm beyond the files already received. Under the UK complaints framework, what is the single best way for the FCA to be alerted?
Best answer: D
What this tests: Complaints and Compensation
Explanation: Because the issue is already before the FOS and appears systemic across many retail complaints, the best route is a mass-detriment reference to the FCA. A super-complaint is a different mechanism used by designated consumer bodies, not by the FOS in this situation.
The core concept is distinguishing who can use each escalation route. In this scenario, the Financial Ombudsman Service is already handling a large number of similar complaints and has identified possible wider consumer harm. That is the kind of situation in which the FOS can alert the FCA through a mass-detriment reference, so the conduct regulator can consider whether broader supervisory or redress action is needed.
A super-complaint is a separate mechanism for designated consumer bodies to raise concerns about features of a market that may significantly harm consumers. The FSCS is concerned with compensation where valid claims cannot be met by a failed or defaulting firm, and the PRA is not the main conduct body for this retail complaint issue. The key distinction is that FOS-wide complaint trends point to mass-detriment referral, not a super-complaint.
Where the FOS sees a widespread complaint pattern causing broader consumer harm, it can alert the FCA through a mass-detriment reference.
Topic: Complaints and Compensation
An FCA-authorised investment adviser receives four complaints about unsuitable advice on an authorised bond fund. Assume each complaint was made in time and relates to regulated activity. For this question, FOS eligible complainants include charities with annual income below £6.5 million, but not listed public companies or investment banks acting for their own account. To treat customers fairly, which complainant should the firm tell may refer the matter to the FOS if dissatisfied with the final response?
Best answer: C
What this tests: Complaints and Compensation
Explanation: The deciding issue is complainant eligibility. On the facts given, the charity is within the stated FOS category because its annual income is below £6.5 million and the complaint concerns regulated advice, so the firm should signpost FOS rights if the complaint remains unresolved.
FOS jurisdiction depends on both the type of complaint and the status of the complainant. Here, the stem removes timing and activity doubts by stating that each complaint was made in time and relates to regulated activity. That means the key test is whether the complainant is eligible. Under the facts provided, a charity with annual income below £6.5 million is an eligible complainant, so the firm should treat that complaint as potentially within FOS jurisdiction and include FOS referral rights in the final response.
A listed plc and an investment bank acting for their own account are excluded by the stem, and a former employee with no advisory relationship is not complaining as a customer about the regulated advice. The correct approach is to assess eligibility carefully rather than assume any dissatisfied party can go to the FOS.
A charity below the stated income threshold is an eligible complainant, so its complaint can fall within FOS jurisdiction.
Topic: Complaints and Compensation
A customer contacts an advice firm about two unrelated problems. She has £12,000 on deposit with a UK bank that has failed, and the FSCS has said eligible depositors will be paid automatically. She also lost money after unsuitable ISA investment advice from a separate FCA-authorised firm that the FSCS has already declared in default. What is the best next step?
Best answer: A
What this tests: Complaints and Compensation
Explanation: FSCS protection applies differently by claim category. Here, the deposit claim is already being processed automatically, but the unsuitable advice loss is an investment business claim against a firm already declared in default, so the customer should submit that claim to the FSCS.
The key concept is that FSCS processes depend on the type of protected claim. For deposits, once a bank fails, eligible depositors are often compensated directly, and the stem explicitly says the FSCS will pay automatically. That means no separate claim or complaint step is the best next action for the deposit.
The unsuitable ISA advice loss falls under investment business. Because the advice firm has already been declared in default, the correct route is now to the FSCS for compensation. The FOS resolves complaints, and the FCA regulates firms, but neither is the right next step here for a defaulted firm where the claim is being pursued under the FSCS regime.
The key takeaway is to match the action to the protected claim category: automatic handling for the deposit, active FSCS claim for the failed investment adviser.
The deposit claim is being handled automatically, while the loss from the defaulted advice firm should now be pursued as an FSCS investment claim.
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