James works for Beta Financial Services (BFS) Pty Ltd as a financial planner for high-net-worth clients. Lately,
Question:
James works for Beta Financial Services (BFS) Pty Ltd as a financial planner for high-net-worth clients. Lately, the firm has suffered a severe downturn and has lost most of its profitable high-net-worth clients. James' boss has given him until the end of the month to meet his KPIs.
One of his long-standing clients is Fiona, who has recently re-married. In this year's review, James recommends that Fiona update her personal insurance coverage given her change in circumstance. Fiona agrees with this recommendation, and James later includes it in the advice statement. Fiona signs off on the advice.
When completing the insurance application form with Fiona, one of the questions the insurer asks is whether Fiona is a smoker. Fiona states that she is a non-smoker and asks James to tick the 'No' box.
Upon reflection, James recalls Fiona works close to the office in the city, and James has often seen her standing outside the building with other colleagues smoking during lunchtime.
Since James has observed his client's behaviour in an informal setting, he is still determining whether to accept what Fiona has told him. Keeping Fiona would mean that he has achieved his set KPIs. James argues that, ultimately, Fiona is signing off on the form and making the declaration. James decides that it may be reasonable to act on the information provided by the client during their official interactions, as he is not responsible for monitoring the client's behaviour informally outside of these official interactions.
Referring to the above scenario, explain
- Whether James is acting in accordance with the five values of the Financial Adviser Standards.
- Drawing upon the twelve standards of the Financial Adviser Standards, explain what James should be doing to meet the ethical standards of the profession.
International Business Law Text Cases And Readings
ISBN: 9780273768616
6th International Edition
Authors: Ray A. August, Don Mayer, Michael Bixby