CASE STUDY:

At the latest practice partners meeting, all four partners agreed from an ethical point of view that they should not provide advice to their own family members or close friends. Instead, they would organise forone of the other advisers in the practice to provide financial advice in these situations. In line with thisarrangement, Don has referred Geoff A RELATIVE onto Anita who is one of the other advisers in the practice, Donhas stepped back and has not taken part in the advice process between Geoff and Anita.

A week after Geoff has begun to implement Anita's advice, the practice support manager comes to ask Dona quick question. During this discussion, she mentions in passing that Geoff's insurance applications have all been accepted without any concerns raised by the insurance underwriters. This surprises Don, ashe is well aware that five years ago, Geoff injured his knee quite seriously while they were playing squash together. In Don's professional judgement, he would have expected the insurance underwriters tohave placed some exclusion or conditions on Geoff's insurances due to the damage to Geoff's knee.

As Don was not a part of the advice process, he assumes that Geoff discussed this information with Anitaand that it was appropriately disclosed to the insurer. Don sees this as a good outcome for Geoff anddecides to take no action.

QUESTION: Evaluate and explain, with reference to the case study facts and the relevant legislation, if the financial adviser (Don) has acted in the best interests of the client (Geoff). In your discussion also provide comment on whether Don has acted in the best interests of the financial planning profession.