Question
Nicole, a Financial Adviser, receives a telephone call from a relatively new client, Simon. Simon says, The share market will never recover from this global
Nicole, a Financial Adviser, receives a telephone call from a relatively new client, Simon. Simon says, The share market will never recover from this global downturn. Its a disaster! I want to change the asset allocation in my super to 100% cash, and I want to do it today!
I want my wife, Lucy, to move her super into cash as well. Simon and Lucy are both 52 and have a combined superannuation balance of $480,000. Nicole advises Simon to not panic, highlights the long-term nature of superannuation investments, and discusses the risks of placing all their monies into cash at this turbulent time.
Nicole makes an appointment the following day to meet with both Simon and Lucy, telling Simon Dont panic or do anything today lets have a look at how to manage this tomorrow. The next day at the meeting, Simon states, I contacted the super fund yesterday, and changed my asset allocation to 100% cash. Lucy also transferred hers to 100% cash. But now I realise I might have panicked and done the wrong thing. What can I do?
Required:
Has Nicole breached any of the core values of the FASEA Code of Ethics by not implementing the instructions of her client immediately she received the telephone call from Simon?
Discuss the core values that Nicole may have failed to comply with and if she has acted correctly by not recommended that Simon change the asset allocation.
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