Free CISI UK RPI Practice Questions: Complaints and Compensation

Use this focused CISI UK RPI page as a short practice test for Complaints and Compensation. The items are original Finance Prep sample exam questions built for scenario-based practice, not trivia, puzzle questions, official CISI questions, copied live-exam content, or exam dumps.

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Sample questions

These are original Finance Prep practice questions aligned to this topic area. They are not official CISI questions, copied live-exam content, or exam dumps. Use them to preview question style and explanation depth before continuing with topic drills, mixed sets, and timed mock exams in Finance Prep.

Question 1

Topic: Complaints and Compensation

A retail investment firm received an eligible complainant’s complaint about investment advice. Eight weeks have passed since receipt, and the firm is still not in a position to issue its final response. Which complaint-handling step should the firm take now under FCA DISP?

• A. Send a summary resolution communication and close the complaint as informally resolved.
• B. Refer the complaint directly to FSCS for compensation assessment.
• C. Send a written response explaining the delay, stating when a final response is expected, and informing the complainant of the right to refer to FOS.
• D. Wait until the investigation is complete before contacting the complainant again.

Best answer: C

What this tests: Complaints and Compensation

Explanation: FCA complaint-handling rules require firms to progress complaints promptly and keep complainants informed. By the end of eight weeks after receiving a complaint, the firm must normally send either a final response or a written response explaining why it is not yet able to do so. If the final response is delayed, the firm should indicate when it expects to provide one and tell the complainant about the right to refer the matter to the Financial Ombudsman Service. This preserves the complainant’s escalation rights rather than leaving the matter open indefinitely.

• A summary resolution communication is used for complaints resolved quickly, not for an unresolved complaint at eight weeks.
• Waiting silently until the investigation is complete fails to meet the eight-week response duty.
• FSCS deals with compensation claims where a firm is unable or likely unable to meet claims, not ordinary complaint escalation by an authorised firm.

At the eight-week point, the firm must either issue a final response or explain the delay and give the complainant FOS referral rights.

Question 2

Topic: Complaints and Compensation

A retail client complains that an FCA-authorised financial adviser gave unsuitable advice on a pension transfer. The firm is still trading and has issued a final response rejecting the complaint. The client received the final response two months ago and wants individual redress without starting court proceedings. What is the single best route?

• A. Ask the FCA to adjudicate the complaint and award compensation.
• B. Restart the firm’s internal complaint process and wait for another final response.
• C. Apply to the Financial Services Compensation Scheme for compensation now.
• D. Refer the complaint to the Financial Ombudsman Service within the permitted referral period.

Best answer: D

What this tests: Complaints and Compensation

Explanation: The Financial Ombudsman Service is the appropriate route for an eligible complainant seeking individual redress against an authorised firm after the firm’s complaint process has reached a final response, provided the referral is made within the relevant time limit. Here, the client is a retail client, the matter concerns regulated investment advice, the respondent firm is FCA-authorised and still trading, and the final response was received only two months ago. FSCS is generally relevant when an authorised firm is unable, or likely unable, to meet eligible claims, not where the firm is still able to respond. The FCA supervises and enforces rules but does not normally decide individual compensation disputes. Repeating the internal process is unnecessary once a final response has been issued.

• FSCS is not the best route because the firm is still trading and there is no indication it cannot meet claims.
• The FCA may use complaint intelligence for supervision, but it does not act as the customer’s ombudsman.
• A further internal complaint cycle is not required after a final response on the same complaint.

The client is an eligible complainant, the complaint concerns regulated advice by an authorised firm, and a final response has been issued recently.

Question 3

Topic: Complaints and Compensation

An individual retail client is affected by the following events:

• A UK-authorised bank is unable to repay her £60,000 savings account.
• An FCA-authorised adviser is in default and cannot meet a £30,000 claim for loss caused by unsuitable investment advice.
• Shares she bought through a solvent execution-only platform have fallen in value because of normal market movements.

Assume she is an eligible claimant and any relevant FSCS compensation limit is higher than each loss. Which statement best applies the FSCS rules?

• A. Only the savings claim can be protected, because FSCS protection does not apply to investment advice claims.
• B. The share price fall is protected if the client complains to the platform before making an FSCS claim.
• C. The savings claim is a deposit claim and the unsuitable-advice loss is an investment claim, but the market fall is not compensated merely because the shares performed badly.
• D. All three losses are investment claims because they involve financial products held by a retail client.

Best answer: C

What this tests: Complaints and Compensation

Explanation: The FSCS is a statutory compensation scheme for eligible claimants with protected claims against authorised firms that are unable, or likely to be unable, to meet those claims. A failed bank’s inability to repay a savings account is treated as a deposit claim. A failed FCA-authorised adviser’s inability to meet a valid claim for unsuitable investment advice can fall within investment business protection. The scheme is not a general guarantee against poor investment performance, so a normal fall in share value through a solvent execution-only platform is not compensated merely because the client has lost money.

• Treating all losses as investment claims ignores the separate FSCS categories and the need for a protected claim against a failed firm.
• Excluding advice claims overlooks that investment business protection can cover eligible claims arising from regulated advice.
• Complaining to a solvent platform does not turn ordinary market loss into an FSCS protected claim.

FSCS protection depends on an eligible protected claim against a failed authorised firm, not on ordinary investment performance.

Question 4

Topic: Complaints and Compensation

A retail client received negligent advice from an FCA-authorised investment adviser to transfer into a regulated investment. The adviser has since been declared in default and cannot meet a valid civil liability claim. The loss is not simply a fall in market price. Which FSCS protected-claim category/function matches these facts?

• A. Insurance: compensation is payable because the investment loss is treated as a policy claim.
• B. Deposit: compensation is payable because the client paid money to the adviser before buying the investment.
• C. Complaint handling: the FSCS decides the complaint and orders the failed adviser to pay redress.
• D. Investment business: compensation may be available for an eligible claimant’s valid liability claim against the failed adviser.

Best answer: D

What this tests: Complaints and Compensation

Explanation: The FSCS is a compensation scheme for eligible claimants when an authorised firm is unable, or likely to be unable, to meet protected claims against it. In this case, the relevant activity is investment advice by an FCA-authorised firm, and the firm is in default. That points to an investment business protected claim, provided the client and claim meet the scheme rules. The key distinction is that the FSCS does not compensate normal investment performance losses. It may compensate where the loss is linked to a valid claim against the failed firm, such as negligent advice or a failure to return money or assets within the protected scope.

• Treating the case as a deposit confuses investment advice with money placed with a bank or building society.
• Treating the case as insurance confuses investment business with claims under contracts of insurance or insurance distribution.
• Treating the FSCS as a complaint handler confuses it with routes such as the firm’s complaints process and the Financial Ombudsman Service.

The claim arises from regulated investment advice by a failed authorised firm, so it falls within the investment business category rather than ordinary market-loss protection.

Question 5

Topic: Complaints and Compensation

Assuming the claimant is eligible and the relevant authorised firm is in default, which list contains only categories that can give rise to an FSCS protected claim?

• A. FCA fines, FOS administration costs, and any court judgment against an authorised firm.
• B. Market-price losses, tax-planning losses, and poor service complaints against solvent firms.
• C. Unregulated cryptoassets, commercial lending disputes, and general consumer purchases.
• D. Deposits, insurance business, regulated investment business, home finance mediation, and debt management.

Best answer: D

What this tests: Complaints and Compensation

Explanation: The FSCS is a fund of last resort. A protected claim normally requires an eligible claimant, a relevant authorised firm that is unable to meet claims, and a claim that falls within an FSCS-protected category. These categories include areas such as deposits, insurance, regulated investment business, home finance mediation, and debt management. FSCS protection is not a general guarantee against all financial losses. It does not compensate ordinary market movements, tax disappointment, general service complaints while a firm can still pay, or losses from activities outside the protected regulatory categories.

• Market-price losses and tax-planning losses are not protected merely because a client lost money.
• Unregulated cryptoassets and general commercial disputes fall outside the protected categories unless a specific regulated activity and FSCS protection applies.
• FCA fines, FOS costs, and court judgments are different legal or regulatory outcomes, not FSCS protected claim categories.

These are broad FSCS protection areas where an eligible claim may be covered if the relevant firm cannot meet it.

Question 6

Topic: Complaints and Compensation

An authorised investment firm receives a written complaint from an individual retail client about unsuitable advice. The matter is not resolved by the close of the third business day after receipt, and the applicable FCA final response deadline is eight weeks. Which procedure matches the firm’s complaint-handling requirements?

• A. Escalate it only to the MLRO and delay any acknowledgement until law-enforcement consent is obtained.
• B. Treat it as informal unless the client submits the firm’s complaint form, then respond after the adviser has reviewed it.
• C. Record it, send a prompt written acknowledgement, escalate it for fair investigation, and issue a final response within eight weeks or a delay response with FOS referral rights.
• D. Refer it to the FSCS, because compensation claims replace the firm’s duty to investigate unresolved complaints.

Best answer: C

What this tests: Complaints and Compensation

Explanation: FCA complaint-handling procedures require firms to identify, record, and handle complaints promptly and fairly. Where a complaint is not resolved by the close of the third business day after receipt, the firm should send a prompt written acknowledgement and ensure the matter is investigated competently and impartially through its complaint process. For the stated investment-advice complaint, the firm must provide a final response within eight weeks or send a written response explaining why it is not yet able to do so and informing the client of Financial Ombudsman Service referral rights. A firm cannot avoid these duties by treating the matter as informal, sending the client straight to compensation arrangements, or using unrelated financial-crime escalation routes.

• FSCS compensation may be relevant only after firm failure or a valid compensation route; it does not replace the firm’s complaint-handling duties.
• MLRO escalation concerns suspicious activity and financial crime, not ordinary suitability complaints.
• Requiring the client to use a prescribed complaint form is too narrow; complaints may be made in different forms and still require proper handling.

An unresolved complaint must be recorded, acknowledged promptly, investigated fairly through the firm’s complaint process, and answered within the FCA deadline or with a compliant delay response.

Question 7

Topic: Complaints and Compensation

A retail client phones her investment firm and says she is unhappy with advice to transfer an ISA, believes she has lost money, and wants the matter reviewed. The adviser records the call as a “service query” because the client has not put anything in writing. He keeps the matter within his own team and sends a brief holding email five weeks later. Compliance first sees the file after nine weeks, when no final response or referral-rights wording has been sent.

What is the primary cause of the complaint-handling failure?

• A. The client did not provide the complaint in writing before the firm investigated it.
• B. The firm failed to recognise and escalate an oral expression of dissatisfaction into its formal complaints process.
• C. The adviser sent a holding email rather than immediately offering financial redress.
• D. Compliance became involved only after the adviser had already gathered background information.

Best answer: B

What this tests: Complaints and Compensation

Explanation: A complaint does not have to be made in writing. If a retail client expresses dissatisfaction about regulated advice and indicates possible loss, the firm must identify it as a complaint and handle it through its established complaints procedure. That includes prompt acknowledgement where required, proper escalation, fair investigation, keeping appropriate records, and issuing the required response or delay communication with referral rights within the applicable timeframe. In this scenario, the missed trigger was at the start: the adviser wrongly treated the call as a service query and kept it outside the complaints process. The later missing final response and late compliance involvement are consequences of that initial failure rather than the main driver.

• A holding email may be inadequate, but the deeper failure was that the matter was not entered into the complaints process at all.
• A written complaint is not required; oral complaints can trigger the firm’s complaint-handling duties.
• Compliance gathering information is not improper by itself; the problem is delayed escalation after the complaint was misclassified.

The client’s call raised dissatisfaction and possible financial loss, so it should have been treated as a complaint and handled under the firm’s complaint procedures from the outset.

Question 8

Topic: Complaints and Compensation

Under FCA complaint-handling rules for an eligible complaint, a firm cannot resolve the complaint by the close of the third business day after receipt. Which step best matches the required process?

• A. Send a summary resolution communication and close the complaint without further investigation.
• B. Refer the complainant directly to the FSCS as the next step in the complaint process.
• C. Wait until the investigation is complete before sending any written acknowledgement.
• D. Handle it under the full complaints process, including prompt written acknowledgement and a final response within the applicable eight-week period.

Best answer: D

What this tests: Complaints and Compensation

Explanation: The FCA rules distinguish between complaints resolved quickly and those needing the full complaints process. If a complaint is resolved by the close of the third business day after receipt, the firm may use a summary resolution communication. If it is not resolved by then, the firm should acknowledge it promptly in writing, investigate it competently and fairly, keep the complainant informed, and issue a final response within the applicable eight-week period. If the firm cannot provide a final response in time, it must explain the delay and inform the complainant about referral rights to the Financial Ombudsman Service where applicable.

• A summary resolution communication is only appropriate where the complaint has been resolved by the close of the third business day.
• Delaying acknowledgement until the investigation is complete conflicts with the requirement to acknowledge unresolved complaints promptly.
• The FSCS deals with protected claims where firms are unable or likely unable to meet claims; it is not the ordinary next step for handling a live complaint.

If the complaint is not resolved by the close of the third business day, it must move into the firm’s full complaint-handling process rather than the summary resolution route.

Question 9

Topic: Complaints and Compensation

A retail client phones an investment firm and says that advice received from one of its advisers was unsuitable and caused a loss. The adviser believes the complaint has no merit and offers to call the client back with an explanation. What pattern should the firm’s complaint procedure require at this stage?

• A. Treat it only as a training and competence matter unless the firm later agrees to pay compensation.
• B. Recognise it as a complaint, record and escalate it under the complaints process, acknowledge it promptly unless resolved quickly, and investigate before issuing the required response.
• C. Leave it with the adviser as an informal service query until the client confirms the complaint in writing.
• D. Refer it immediately to the Financial Ombudsman Service and pause the firm’s own review until the ombudsman requests information.

Best answer: B

What this tests: Complaints and Compensation

Explanation: A complaint does not need to be written or use the word “complaint”. Where a customer expresses dissatisfaction about regulated activities and alleges loss, material distress, or inconvenience, the firm should apply its complaint procedures. That means recording the matter, escalating it to the appropriate complaint-handling route, acknowledging it where required, investigating it fairly and promptly, and issuing the appropriate response. The adviser’s view that the allegation has no merit does not remove the need to follow the procedure. Nor should the firm bypass its own process by sending the matter straight to the Financial Ombudsman Service before it has had the opportunity to respond.

• Requiring written confirmation is wrong because oral complaints can trigger the complaints process.
• Sending the case straight to the Financial Ombudsman Service is premature; the firm must first handle and respond to the complaint.
• Treating the issue only as training and competence ignores the customer-facing complaint record, investigation, and response duties.

An oral expression of dissatisfaction alleging loss should enter the firm’s complaint-handling process, with proper recording, escalation, acknowledgement, investigation, and response.

Question 10

Topic: Complaints and Compensation

An authorised investment firm has failed and is unable to meet a valid protected claim from an eligible retail client. Which mechanism matches this function?

• A. A FOS money award requiring the firm to pay redress after deciding an individual complaint about its conduct
• B. An FCA enforcement fine imposed on the firm and automatically distributed to eligible protected claimants
• C. A FOS direction requiring the firm to take specified steps to put a complainant back in the correct position
• D. FSCS compensation paid under the statutory compensation scheme for eligible protected claims when a firm is unable, or likely to be unable, to meet claims

Best answer: D

What this tests: Complaints and Compensation

Explanation: FSCS is the UK compensation scheme of last resort for eligible protected claims, typically relevant when an authorised firm has failed and cannot meet its liabilities. FOS deals with complaints about firms and may make a money award or give a direction requiring the firm to take action, but that is complaint redress against a respondent firm, not scheme compensation for firm failure. FCA enforcement action may punish or deter misconduct and can involve redress arrangements in some cases, but an enforcement fine is not the same as FSCS protection for an eligible protected claim.

• A FOS money award is complaint redress, not the statutory safety net for a failed firm.
• A FOS direction can require action to resolve a complaint, but it is not a compensation scheme payment.
• An FCA fine is a regulatory sanction and is not automatically paid as FSCS compensation.

FSCS compensation is designed to protect eligible claimants where a protected claim cannot be met because the authorised firm has failed or is likely to fail.

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