Under the Consumer Protection Code, the term independent may be used only if which conditions apply? (i) The principal regulated activities of the intermediary are provided on the basis of a fair analysis of the market. (ii) The intermediary allows the consumer the option to pay in full for its services by means of a fee. (iii) The intermediary only charges trail commissions.

• A. (i) only
• B. (i) and (ii) only
• C. (i) and (ii) and (iii)
• D. (i) and (iii) only

Answer: (B)

Independence here means the adviser’s recommendations are not shaped by product providers and are in the client’s best interests. To be able to use the term, two things must be in place: the adviser’s main regulated activities must be based on a fair analysis of the whole market, and the consumer must have the option to pay for the advisory service in full by a fee. This combination helps ensure the advice isn’t biased by any single product’s incentives and that the client can choose how to pay without being pressured into a particular product.

The idea that the intermediary must “only” charge trail commissions isn’t required. Independence can exist even without that strict charging rule, as long as the core conditions of fair market analysis and client-paid fees are met. Trail commissions alone could still pose bias risks, so they’re not a necessary condition for independence to be claimed.