Reference no: EM133139843 , Length: word count:2800

Question: In your role as a Senior Financial Adviser, you are mentoring a junior colleague who has prepared an SOA for a client. Your mentee has prepared an SOA and your job is to critique it (including a discussion on one ethical issue presented in scenario) and prepare a report for your mentee

1. Read the SOA for Review prepared by your mentee.

2. Assess the SOA for Review and prepare a report (in Microsoft Word) for your mentee which:
o identifies all errors of fact where the SOA contradicts information provided in the Scenario Briefing Paper;
o provides feedback on the strengths and weaknesses of the SOA from the perspective of its compliance with regulatory and legislative requirements of content and form (please note you are not required to critique the advice provided);
o identifies any breaches of the Corporations Act 2001 and discusses the potential consequences of these; &
o includes an analysis for one of the ethical issues outlined in the Scenario Brief.

Overview of the scenario for Assessment

Assessment is based on a hypothetical and limited financial advice scenario as outlined in the Fact Finding and Statement of Advice documents attached. Valerie and David, a de facto couple have asked a financial planner, Mr Adviser, to review their superannuation and insurance arrangements and to advise them on establishing an investment portfolio.

Mr Adviser's details

Mr Adviser is the sole shareholder and director of ABC Financial Planning Pty Ltd, which is an authorised representative of AFS licensee XYZ Licensee Pty Ltd. ASIC has been notified of the appointment of both ABC Financial Planning Ltd as an authorizer and of Mr Adviser as an authorized representative by XYZ Licensee pursuant to s916F (1) Corporations Act 2001 (Cth).

XYZ Licensee Pty Ltd is a wholly owned subsidiary of Pickwick Investments Ltd, an ASX listed company that provides services to financial advisers and accountants in the areas of licensing, training, education, and client engagement. Pickwick Investments Ltd has a material shareholder, WEALTHAB Ltd, which offers an administration and reporting platform to the Australian marketplace.

XYZ Licensee Pty Ltd was previously owned by WEALTHAB and if Valerie and David use the WEALTHAB platform some of XYZ Licensee's employees and representatives (including Mr Adviser) may benefit by virtue of being shareholders in the company.

Additional details

Commissions on new insurances placed are 60% of the premiums in year 1, and 20% thereafter.

David's income protection policy can be transferred to ABC Financial Planning Pty Ltd as the adviser and they would then receive the 20% commission.

Valerie's existing life and TPD policies encapsulated within her current superannuation cannot be transferred to ABC Financial Planning Pty Ltd.

Pursuant to the authorised representative agreement between ABC and XYZ, 90% of all insurance commissions are paid to ABC Financial Planning Pty Ltd. ABC will also receive a fee from XYZ Licensee Pty Ltd based upon the number of clients directed to WEALTHAB per annum.

Around 2800 words

Attachment:- Statement_of_Advice_Assessment.rar