QUESTION 3

Use IRAC format to answer the question if you applicable.

1. Issue: State the legal issue(s) to be discussed.
2. Rule: State the relevant statutes and case law.
3. Application: Apply the relevant rules to the facts that created the issue.
4. Conclusion: State the most likely conclusions using the logic of the application section

You are a graduate analyst working for a Melbourne financial advisory practice. Your supervisor Julianne Peterson provides you with an extract of an ASIC Media Release on 11 May 2020 which reads as follows: ASIC has banned southeast Melbourne-based financial adviser Bimaljeet Sekhon from providing financial services for three years. From June 2013 to July 2017, Ms Sekhon was an authorised representative of Count Financial Limited, which was owned by the Commonwealth Bank of Australia at the time. She was an authorised representative of Politis Investment Strategies Pty Ltd between November 2017 and March 2019. ASIC found that Ms Sekhon failed to comply with financial services laws, including failing to provide advice that was in the best interests of her clients. ASIC also found that Ms Sekhon was not adequately trained or competent to provide financial services. A review of Ms Sekhon's advice showed that she failed to make reasonable inquiries into, and base all judgements on, her client's relevant circumstances, and to appropriately scope the advice. Ms Sekhon failed to consider some clients' existing insurance arrangements and the potential impact of the recommended products' premiums on her clients' retirement savings. Financial advisers must act in the best interests of their clients when providing personal advice. This includes taking reasonable steps to understand their clients' personal circumstances and exploring existing and other available financial products to ensure they are providing advice that meets their clients' objectives. Ms Sekhon has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

REQUIRED

Outline the legal rules breached by the financial advisor from the description of his conduct in this ASIC Media Release and discuss in the context of a client considering establishing a Self-Managed Superannuation Fund.

You can refer to theCorporations ACT 2001 on the link below if need be.

http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/