Case study: FutureLife Financial Services
Shaun Watkins (age 44) established FutureLife Financial Services 15 years ago. Five years ago he brought
Emily Redbank (age 49) into the partnership. They are both owners and principals and hold their own
Australian financial services (AFS) licence. You are a senior financial adviser employed for the past
three years by FutureLife, with an offer for equity in the business within the next few years. With the
business having experienced exceptional growth over the past 12 months, FutureLife has decided they
need an additional adviser. Rather than hire outside the firm, they have opted to transition their young
support staff member, Josie, into an adviser role.
Shaun’s clients are predominantly self-funded retirees, with a small number who require specialised
aged care financial advice. His clients have accumulated their wealth through successful small businesses.
Shaun prefers to look after his existing clients, with any new clients referred to yourself or Emily.
Emily’s clients (age 35 to 55) are successful wealthy professionals from a mix of professional backgrounds.
Given their wealth, Emily has recommended self-managed superannuation funds to a number of these
clients.
Josie has worked in the practice in a number of support roles over the last four years while she was
completing her university degree. Josie graduated 12 months ago with an approved Bachelor of Commerce
(Financial Planning) degree. As part of her career planning, you have agreed to supervise Josie through
her professional year, and she is currently in the third quarter of her professional year.
You have 10 years experience as a financial adviser and are fully qualified to provide advice on a wide range
of strategies and products. Half of your clients followed you to FutureLife, from your previous financial
adviser role. When Shaun or Emily is on leave, you also help out by providing advice to their clients. ---------------------------------------------------------------------------------------  --------------------------------------------------- Scenario 3 — FutureLife clients: Kevin and Anika Leste
Emily has not been well lately and has just been diagnosed with early-stage breast cancer. Her doctors have
recommended she take at least six months off from work to concentrate on her treatment plan, which they
are in the process of finalising. As Emily will be away from the office for some time, she asks you to provide
advice for her existing clients.
Your first meeting is with Emily’s clients, Kevin and Anika Leste. You will be meeting them for the first time
and Emily has told you they are important clients because they often recommend family, friends and their
own clients (from their business) to the practice.
Kevin and Anika operate a successful bookkeeping business where they manage the accounts for many
self-employed clients. There has been a longstanding referral relationship between Emily and the Lestes,
which sees them share many clients. There remains frequent cross-referral of clients between Emily and
the Lestes; however, this arrangement has been altered due to the introduction of the Financial Planners
and Advisers Code of Ethics 2019. Where in the past, Emily simply paid them a referral fee, she now adjusts
her advice fees (up or down) to Kevin and Anika, in lieu of referral payments.
The Leste’s file shows that a Statement of Advice was issued three years ago. The client notes state that
Emily recommended the Lestes establish an SMSF, and this has now been in place for nearly three years.
The file notes also state they have rolled over superannuation from their previous superannuation funds
with AustralianSuper and Aware Super. Both funds were previously invested in the ‘balanced’ options.
As bookkeepers, the Lestes undertake a lot of the SMSF administration work themselves. As you read
through their file, it appears they have little knowledge of investing. The only assets currently in the SMSF
are a $1.4 million term deposit with the CBA and the SMSF administration account with about $60,000.
You review their goals and objectives listed in their file and note that their main goals are to build wealth
for their retirement and help their adult children.
After introducing yourself to the Lestes, you explain that as you are not fully aware of their financial
situation, and as part of the review process, it would be worthwhile revisiting their current situation,
goals and objectives. Part-way through the meeting, Kevin takes a phone call and states he will need to
leave immediately to take care of some urgent business, and Anika can update him later on what was
discussed. However, as he leaves, he says that he just wants you to invest the money in the way you think
is appropriate for them as ‘Emily does this all the time’. He adds, ‘we know how the process works,
so we don’t really need to go through all the paperwork’. --------------------------- IN a tone other than AI/ChatGPT please answer the following questions using 2000 words and  at the end give an -in-depth and extensive references list in harvard referencing style guide ---------------------------------------------------------------------------------- (a) Explain how Emily’s conduct would be assessed under the value of Diligence and Standard 5 of the
Financial Planners and Advisers Code of Ethics 2019. (10 marks)
(b) Explain three (3) issues or potential breaches of the Financial Planners and Advisers Code of Ethics
2019 that may arise from Emily’s actions of adjusting advice fees as a result of cross-referrals with
Kevin and Anika. (15 marks)
(c) Discuss whether Emily’s previous advice to Kevin and Anika meets the best interests obligations
under Standard 2 of the Financial Planners and Advisers Code of Ethics 2019. (5 marks)
(d) Outline the obligation Standard 12 of the Financial Planners and Advisers Code of Ethics 2019 places
on advisers. Given your experience in dealing with the Lestes, outline three (3) actions you could take
to comply with this obligation. (10 marks)
Support your answers with reference to the case study and scenario facts and research.