Les and Marg Linehan are both in the late 60s and have been clients of the practice

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Question:

Les and Marg Linehan are both in the late 60s and have been clients of the practice for many years, mainly dealing with James. They have one child, a son Robert, with whom they have a strained relationship, and they are not on speaking terms. They do however see their only grandchild, Jennifer (age 22), who is Robert's daughter, on a regular basis. As Jennifer is just about to complete her university degree, Les and Marg think it would be a good time to give Jennifer $200,000, as they have significant wealth accumulated and would prefer to see Jennifer benefit from the funds while they are alive. Les and Marg have already spoken to James about how they believe the money should be managed and invested. Before telling Jennifer about the gift, Les and Marg asked her what her financial goals are.

Jennifer said she wasn't sure but would like to travel overseas or save towards a deposit for her own home. Les and Marg insist that Jennifer receives financial advice before they gift her the money, to ensure she has an effective financial plan in place. They think it would be better for Jennifer to deal with an adviser closer to her own age and suggest that Monique would be suitable. Les and Marg have always found Monique to be friendly over the years and are comfortable that you and James will be mentoring Monique. This will be Monique's first meeting (indirectly supervised) as a provisional relevant provider. You ask Monique about her current plan for the interview, and she provides you with the following outline: Jennifer's grandparents have already spoken to James about how Jennifer's gift should be managed and invested. Les and Marg have been James's clients for a long time and have done well financially, and I'm assuming they know what they are talking about and will be able to provide Jennifer with the right guidance on investments too. To save a bit of time, I've already emailed the FSG to Jennifer and I'll get her to acknowledge she has received it, when I see her. The money will be given to Jennifer as cash. Given that Jennifer is in her early 20s, she has a long-term investment horizon, and it sounds like high-growth investments will be an appropriate solution for her. We've got some really great model portfolios of direct shares on our approved product list, which are currently generating high returns for other clients, that I can talk to her about. I am a bit concerned her grandparents may not be happy for her to put all the funds just in shares, so I may need to check with them about that.

This meeting should be straightforward as we will focus just on investing the $200,000 gift and I doubt whether Jennifer will need any insurance, given her young age. She will eventually inherit all of her grandparents' money anyway, and I'm sure they would look after her if anything was to happen to her in the meantime.

b) Analyse Monique's conduct and discuss whether she complies with Standard 1 and Standard 2 of the Financial Planners and Advisers Code of Ethics 2019 in her dealings with Jennifer?