Grace is employed by a financial advisory firm. The firm has recently changed licensees $($AFSL$).$ Grace has been informed that for each client that she transitions to a financial product associated with the licensee, both she and her firm will receive a transition payment. Grace encourages all her clients to transition to investments in financial products associated with the new licensee. She does not advise her clients of the conflict of interest inherent in her recommendation.

Required

a$)$ Why should Grace have notified her clients of the conflict of interest? How should she have handled this conflict of interest?

b$)$ What legal breaches has Grace made? Refer to specific sections in the Corporations Act in your answer.

c$)$ What ethical breaches has Grace made? In your answer, refer to the FASEA Code of Ethics and the particular standards she has violated.

d$)$ What penalties may be imposed on Grace for legal or FASEA code of ethics breaches?