Ken acquired an Australian Financial Services Licence some time ago and commenced business as a financial planner. He is approached for advice by Kerry who provides him with her financial statements for the year ended 30 June 2023. Ken tells Kerry that he will need to see her financial statements for the previous three years and a current statement of income and expenses to provide the advice she needs - to which Kerry responds that these documents remain with her solicitor and her accountant following her divorce earlier this year. Kerry does provide Ken with contact details for her solicitor and accountant, but Ken later believes that he has sufficient information to make a recommendation and decides not to contact these people further.

Kerry also tells Ken that she is currently employed although she will be retiring very shortly. She believes that she will then be able to access a small superannuation pension of around $1,000 per fortnight. However, she is unsure of the exact amount and tells Ken that she 'has never really understood how superannuation works'. Kerry does not believe that this pension will itself be sufficient to meet her fortnightly rental payments and cover her daughter's expenses as she begins her university studies this year.

In these circumstances, Kerry hopes that her bank savings of $30,000 will be sufficient to cover her upcoming expenses. She is not yet sure how much her daughter's university fees and other expenses are likely to cost. She wishes to know whether Ken can recommend a suitable investment for her $30,000 - one that might earn her more than the bank interest it presently earns.

Ken believes Kerry may be underestimating the money she will need in retirement. He knows that to be clear about this he should know how much she will receive in her superannuation pension and further details of the costs Kerry and her daughter might expect to incur. However, Ken sees this to be unnecessarily time-consuming work. He recommends that Kerry buy units in a new managed investment fund to a value of $20,000 from her bank savings. The promoters of this fund are promising a good rate of return and say that Ken will receive 1% commission on any amount invested by his clients in the fund.

On this information, please answer the following three questions. You need to provide reasons and the full legal authority for your answer.

(1)What disclosure obligations should Ken consider under Chapter 7 of the Corporations Act?

(2)Which duties under Chapter 7 of the Corporations Act might have been breached by Ken in advising Kerry? (10 Marks)

(3) Further to your answer to Question (2), what are Ken's potential liabilities for breaching those duties (5 Marks)