FPSCh3 - 2010 Reed International Books Australia Pty...

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© 2011 LexisNexis Australia 1 Financial Planning in Australia 4ed – by Taylor, Juchau, Houterman Solutions by Beverly Houterman Ethics and Compliance Chapter 3 Solutions to Questions Question 1: One of the goals of the earlier Wallis Review was to gain ‘consistency’ in the financial services markets. What do you understand this to mean in a financial advice context? Students should define consistency as a concept of sameness of treatment across all areas of the financial services industry — so that the regulatory environment is such that no particular player has a regulatory advantage over other players and that clients receive a consistent level of protection and service based on their needs rather than who they deal with. Question 2: Who are the four key stakeholders and what are their key conflicting goals? Students should identify the following stakeholders and their key conflicting goals: Individuals — the tensions of meeting current expenses and lifestyle needs with the need to save for and prepare for their retirement. Governments — the need to collect sufficient tax revenue to meet the current and expanding needs of the country with the desire to use tax incentives to get people to save for the long term and reduce the government’s growing Age Pension obligations. Question 3: One of the continuing goals for the financial services industry was clarity of roles and single regulatory responsibility. Has this occurred? Students should identify that many of the players in the financial services industry still have responsibilities to a number of regulators. A superannuation trustee is a good example as they are responsible to ASIC, the ATO and APRA. Banks are now responsible to ASIC for lending, APRA for financial adequacy requirements, the RBA for reporting and as companies to the ATO. © 2011 Reed International Books Australia Pty Limited trading as LexisNexis. Permission to download and make copies for classroom use is granted. Reproducing or distributing any material from this website for any other purpose requires written permission from the Publisher. © 2010 Reed International Books Australia Pty Limited trading as LexisNexis. Ancillary for Financial Planning in Sustralia 4ed - Taylor, Juchau, Houterman
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© 2011 LexisNexis Australia 2 Question 4: The data-collection process and the data-collection form are carefully scrutinised by ASIC when it does licensee audits. Why is ASIC so concerned with the data-collection process? The data-collection process is how financial advisers gain their knowledge of the client and this information is needed to form a basis for advice. ASIC is aware that most of the problems with the provision of financial advice have occurred because the adviser did not know their clients and did not have an appropriate basis for advice. Question 5:
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FPSCh3 - 2010 Reed International Books Australia Pty...

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