Case Study 2 - Gifts, benefits, hospitality and your ethics

Scenario

Xavier is a friend in Adelaide who, like you, is a finance and mortgage broker; you are based in Sydney so aren't in competition with each other. Xavier entered into a referrer agreement with a national real estate agency called Ray-Courts last year and has been getting quite a few cool thank you gifts.

Xavier has mentioned that Ray Courts really show their appreciation to mortgage brokers that get good results with their referred clients. They "shout" brokers for weekends away, all expenses paid, give them tickets to corporate boxes at sporting events and gift vouchers. Ray Courts are owned by AAMC Bank.Xavier's told you that a lot of his loans are now settled by AAMC Bank because for the most part their products are on par with other lenders that he has on his lending panel.

Xavier is encouraging you to contact Ray Courts in Sydney to see if you can get into a referral arrangement as well with the possibility of benefiting from these kinds of rewards. You ask Xavier if he has listed these gifts in his gifts, benefits and hospitality register and he says he listed half of them, so he's still being honest by notifying that he gets gifts.

If you are unable to open the embeddedEthical Decision-making Frameworks document to assist you with answering the following questions, it is available for download from your Resources tab in your Learning Centre.

Knowledge questions

1. Answer whether Xavier is acting ethically or notand which include information on which Obligation/Rule he may need to analyse.

Clickhere https://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-273-mortgage-brokers-best-interests-duty/ to refer to RG 273 Best Interest Duty

• Do not look at Section B 'Acting in the consumer's best interests'.

Yes No

2. Using the Ethical Decision-making Frameworks embedded in the scenario, explain what you could say to Xavier to help him analyse whether his actions are ethical or not.

Reference which ethical framework(s) you have used to help you decide on what to say.

• Explanation is required in maximum words
• Make your script conversational
• Include questions you could get Xavier to ask himself

3. Using the ethical decision-making frameworks, what questions could you ask yourself:

• regarding whether you should work with Ray Courts; and

• to understand your motives for reaching out to Ray Courts

4. If you find your motives are pure, you see this as a great opportunity to broaden your referrer network, and you decide to reach out to Ray Courts to enter into a referrer relationship; what could you do to ensure your work ethics don't shift to a reward focus?