Question: Assessment questions:
1. Financial advisers have a number of disclosure obligations when they provide financial services to a client.
a. What legislation imposes those disclosure obligations?
b. Where would look for guidance on how you would go complying with those obligations? How will you know your source for guidance is reliable?
c. How is disclosure made to clients? Identify any documents required and the procedure for providing them.
d. Using the sources of information on legislative and regulatory requirements identified in your answers above, explain the compliance obligations in relation to providing a client with a Financial Services Guide (FSG). In your answer explain:
i. What an is an FSG;
ii. What is included in an FSG;
iii. When would you give an FSG to a client?
iv. When is an FSG not required?
v. Can these obligations be contracted out of?
2. The FPA has issued various additions to the Professional Code which are centred on the FPA's "client first" principle. These include "Practice Standard 7.5: Conflicts of Interest and Prioritisation".
a. Search the web and locate this practice standard.
b. In your own words explain:
i. How you would monitor your work to ensure that you meet this practice standard;
ii. When tasks arise that may raise doubt regarding their propriety, with whom (individual or organisation) or what source of information would you check to ensure that you complied with the practice standard.
3. In one or two paragraphs explain the effect of Regulatory Guide 146.
4. Explain:
a. how the need for professional development relates to RG146. In your answer state why it is important that financial advisers undertake ongoing professional development?
b. the professional development activities (for your work as a financial planner/paraplanner) that you have undertaken in the last year and explain how these activities relate to your job role/description. If you have not worked in the industry, search the internet and find a relevant job role, then search for activities (a seminar/workshop/other) that would be useful to you in your work in that role. Explain how the activities you have selected relate to the job role.
c. Identify what professional development opportunities that you intend to undertake in the next year. (Identify the activity and then map it to your role).
5. (a) Provide a definition of a "conflict of interest" in the context of the provision of financial services.
(b) What obligations are placed upon financial service licensees about conflicts of interest. Identify the source and substance of the obligation.
(c) What guidance is provided to financial service licensees on dealing with conflicts of interest?
(d) In your answer summarize the three suggested mechanisms for managing conflicts of interest.
(e) Choose one mechanism for managing a conflict of interest you identified in (d) above and discuss what steps a financial services licensee would take to ensure compliance.
6. RG246 deals with the ban on conflicted remuneration. What is "conflicted remuneration"? What does this ban mean for financial advisers?
7. A financial adviser must act in the best interests of the client.
(a) What is the source of this obligation?
(b) How can an adviser ensure that he/she complies with the obligation?
8. Identify and describe a financial planner's compliance obligations under the following legislation and explain how a financial planner will comply with same:
a. Anti-Money Laundering/Counter Terrorism Financing Act; and
b. Privacy Act.
9. Go to the ASIC website and read Media Release 15-357MR "ASIC imposes licence conditions on Morgans Financial Limited": https://asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-357mr-asic-imposes-licence-conditions-on-morgans-financial-limited/
Write a short essay on the purpose of licencing, identifying the relevant legislation and regulatory guidance and discuss whether ASIC's action in relation to Morgans Financial Limited has further the purpose of licencing.
10. In the course providing financial planning advice to a client, a financial adviser may have to seek advice from experts/specialists. Identify a situation where this might occur and include in your answer the type of advice the adviser would seek.