Banking Law

Tiana is seeking your advice to help her mom resolve some of the issues in relation to the so-called "best interests duty and related obligations." The facts are given as follows: EastPac, an ADI and AFS licensee, provides financial advice on managed investment schemes (MIS). Tiana's mother-Jen, who worked as a receptionist at SMU Co. with an annual salary of $80,000 in June 2020, considered retiring early amid the Covid crisis. Jen visited one of EastPac's branches in South Yarra and consulted Jack, a financial planner employed by EastPac. EastPac has a set of detailed questionnaires for their staff to check and determine the risk profiles of each client before they give personal advice. However, Jack was in a rush to have his lunch break and just went through a few basic questions with Jen regarding her personal circumstance, objective, and financial needs. While Jen tried to explain her objectives and need for her early retirement in detail, Jack stopped her and advised that "according to your situation, I would suggest switching your MIS products from "JustTrust" to "Amazing Trust," a subsidiary wholly owned by EastPac. Although the information about Jen is incomplete, and Amazing Trust has a very different strategy and focuses more on riskier investment, Jack still gave his recommendation to switch the MIS to 'Amazing Trust". Not long after Jen implemented Jack's advice, she noticed that she lost more than $25,000 in her MIS account. EastPac has held only two training sessions for its employees and authorized representatives about their FOFA obligations since its establishment in 2016. Tiana is very upset with what happened to her mom and seeks your advice on the following