Schwarzenegger works for Reta Financial Services $($RFS$)$ Pty Ltd as a financial planner for high$-$net$-$worth

clients. Due to the COVID$-19$ lockdown, the firm has suffered a severe downturn and has lost most of its

profitable high$-$net$-$worth clients. Schwarzenegger's boss, Kai$-$Li$,$ has given him until the end of the month to

bring in more profitable business to meet his KPIs.

One of his clients is Akemi, who has recently re$-$married. Akemi has always lived and enjoys a modest lifestyle.

Akemi is in her late seventies. She is mainly unfamiliar with financial matters. In this year's review,

Schwarzenegger recommends that Akemi update her personal insurance coverage, given the change in her

circumstances. Akemi agrees with this recommendation, and Schwarzenegger later includes it in the advice

statement. Akemi signs off on the advice.

When completing the insurance application form with Akemi, one of the questions the insurer asks is whether

Akemi is a smoker. Akemi states she is a non$-$smoker and asks Schwarzenegger to tick the $\text{'}$No$\text{'}$ box.

Upon reflection, Schwarzenegger recalls Akemi works close to the office in the city, and Schwarzenegger has

often seen her standing outside the building with other colleagues smoking during lunchtime. Since

Schwarzenegger has observed his client's behaviour in an informal setting, he is still determining whether to

accept what Akemi has told him. Keeping Akemi would mean that he has achieved his set KPIs.

Schwarzenegger argues that, ultimately, Akemi is signing off on the form and making the declaration.

Schwarzenegger decides that it may be reasonable to act on the information provided by the client during

their official interactions, as he is not responsible for monitoring the client's behaviour informally outside of

these official interactions.

$3$

Schwarzenegger has also learned that Akemi recently received a $$1,710,000$ endowment from her previous

marriage. Akemi told Schwarzenegger that she wanted to use part of the endowment for a cruise holiday every

two or three years but that he would guide her as he has a good head for money. Akemi would also like to

give her two grandchildren money to alleviate the stress of finding work and settling. Lastly, she would like

whatever is left to be managed prudently so that she has something to leave for the only grandchildren.

In Schwarzenegger's recent meeting with Akemi, she mentioned that she would like to invest in an offshore

high$-$growth, high$-$yield fund that a friend recommended and in a high$-$tech growth stock $($a buy$-$now$-$pay$-$later

digital platform$)$ that another friend has made lots of money from. The investment fund she mentions is on

RFS$\text{'}$ licensee Approved Products List $($APL$)$ and pays a generous commission, being the most speculative

product on the APL. Schwarzenegger has also learned that it has one of the licensee's principal as an

investment advisor.

In discussing the clients' situation with Kai$-$Li at the weekly briefing, Kai$-$Li notes that as Akemi is a bequest,

she is now a wholesale client, and Schwarzenegger does not need to comply with the Corporations Law

requirements. Kai$-$Li casually states that a friend has mentioned to him in private Akemi is starting to lose her

memory.

Schwarzenegger is now concerned about what to do next.

Specific Requirements

Identify and explain the ethical dilemmas facing Schwarzenegger.

Select one of the ethical dilemmas you have identified. What should Schwarzenegger do to address this ethical

dilemma? In your written report, work through the steps of the Moral Intervision Model of ethical decision$-$

making to reach and justify a responsible and ethical judgement concerning the ethical dilemma

Schwarzenegger is facing as a moral agent