Nadine has not been well lately and has just been diagnosed with early-stage breast cancer. Her doctors have recommended she take at least six months off from work to concentrate on her treatment plan, which they are in the process of finalising. As Nadine will be away from the office for some time, she asks you to provide advice for her existing clients. Your first meeting is with Nadine's clients, Roger and Ashleigh Stevens. You will be meeting them for the first time and Nadine has told you they are important clients because they often recommend family, friends and their own clients (from their business) to the practice. Roger and Ashleigh operate a successful legal practice where they manage the estate planning affairs for many clients. There has been a longstanding referral relationship between Nadine and the Stevens, which sees them share many clients. There remains frequent cross-referral of clients between Nadine and the Stevens; however, this arrangement has been altered due to the introduction of the Financial Planners and Advisers Code of Ethics 2019. Where in the past, Nadine simply paid them a referral fee, she now adjusts her advice fees (up or down) to Roger and Ashleigh, in lieu of referral payments. The Stevens' file shows that a Statement of Advice was issued three years ago. The client notes state that Nadine recommended the Stevens establish an SMSF, and this has now been in place for nearly three years. The file notes also state they have rolled over superannuation from their previous superannuation funds with AustralianSuper and Aware Super. Both funds were previously invested in the 'balanced' options. As lawyers, the Stevens undertake a lot of the SMSF work themselves. As you read through their file, it appears they have little knowledge of investing. The only assets currently in the SMSF are a $1.4 million term deposit with the CBA and the SMSF administration account with about $60,000. You review their goals and objectives listed in their file and note that their main goals are to build wealth for their retirement and help their adult children. After introducing yourself to the Stevens, you explain that as you are not fully aware of their financial situation, and as part of the review process, it would be worthwhile revisiting their current situation, goals and objectives. Part-way through the meeting, Roger takes a phone call and states he will need to leave immediately to take care of some urgent business, and Ashleigh can update him later on what was discussed. However, as he leaves, he says that he just wants you to invest the money in the way you think is appropriate for them as 'Nadine does this all the time'. He adds, 'we know how the process works, so we don't really need to go through all the paperwork'.

(a) (b) (c) (d) Explain how Nadine's conduct would be assessed under the value of Diligence and Standard 5 of the Financial Planners and Advisers Code of Ethics 2019. (10 marks) Explain three (3) potential breaches of the Financial Planners and Advisers Code of Ethics 2019 that may arise from Nadine's actions of adjusting advice fees as a result of cross-referrals with Roger and Ashleigh. (15 marks) Discuss whether Nadine's previous advice to Roger and Ashleigh meets the best interests obligations under Standard 2 of the Financial Planners and Advisers Code of Ethics 2019. (5 marks) Outline the obligation Standard 12 of the Financial Planners and Advisers Code of Ethics 2019 places on advisers. Given your experience in dealing with the Stevens, outline three (3) actions you could take to comply with this obligation. (10 marks) Support your answers with reference to the case study and scenario facts and research.

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