Rose works for an advising firm. The firm has recently changed licensees. Rose has been made aware that for each client that she transitions to a financial product associated with the licensee, both she and her firm will receive a transition payment. Rose encourages all her clients to transition to investments in financial products associated with the new licensee. She does not advise her clients of the conflict of interest inherent in her recommendation.

Questions:

Why should Rose have notified her clients of the conflict of interest? How should she have handled this conflict of interest?

What legal breaches has Rose made? Refer to specific actions in the Corporations Act in your answer?

What ethical breaches have Rose made? In your answer, refer to the FASEA Code of Ethics and the particular standards she has violated?

Answer rating: 100% (QA)

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