Elton, a long-term risk protection client, has contacted John, his financial adviser about the escalating cost of his life and TPD insurance policies. In January 2016, Elton purchased this cover with ABC Insurance, at the time, Elton was in perfect health and the policy was accepted at standard rates. From John's previous interactions with Elton, he knows that he has low financial literacy, and needs even the simplest concepts explained in detail. During your appointment with Elton, you notice that he is answering all questions with one or two word answers. Elton indicates that his preference would be that the policy be held in superannuation as in his words "It'll cost me nothing'. You also notice Elton is not looking as fit as he once did and he mentions that his back has been playing up lately.

When conducting your research, you realise that you need additional information from Elton in relation to his superannuation fund as well as more detail about his back complaint. You have Identified that XYZ insurance is prepared to offer life and TPD cover through superannuation with a substantial price saving for Elton. XYZ Insurance commission will be 70% of the premium with and ongoing trail of 20%. ABC insurance currently pays a trail of 10%.

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What provision of the Corporations Act requires John to seek additional information regarding Elton's superannuation fund and current health?

Select one:

Conflicted remuneration.

Best interest duty.

The Statement of Advice provisions.

Anti-avoidance provisions of tax legislation.

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If John recommends insurance in superannuation for Elton, identify the actions which he must take to comply with the FASEA Code of Ethics:

Select one:

John can Ignore the impact of insurance in superannuation as he is delivering scaled advice on this matter

John retains his obligation under the Code to ensure that the advice delivered to Elton addresses the long-term impacts of taking Insurance in superannuation, Including the pros and cons of this strategy

As this is insurance advice only, it is not covered by the code.

Provided that John complies with Best Interest Duty under the Corporations Law, he will automatically comply with the Code.

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Elton would like to refer his sister to John, as she would like to set up a self-managed superannuation fund. John is not authorised to advise on self-managed superannuation funds and has no experience in these. Is John able to advise Elton's sister? Why or why not?What course of action should he take?

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John is a tax (financial) adviser registered with the Tax Practitioner's Board (TPB). He is not a registered tax agent. Which service(s) is Andrew not able to provide?

Answer:

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Which of the following is not required in John's Financial Services Guide?

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Compensation and professional indemnity insurance arrangements.

The date of the Financial Services Guide.

Remuneration, commissions and other benefits.

The financial advisers previous employment history.