Stuart and Belinda, who earn good salaries, want to buy a property they can use to live in and operate a bed and breakfast in their retirement. The only funds they have available is their combined superannuation balance of around $350,000. They have a number of debts, including a mortgage over their home. Deborah is an adviser with Wonderful Advice Pty Ltd, which is a subsidiary of Truthful Bank Ltd and holds a financial services license. Deborah is an employee and is authorized by it to provide personal advice to retail clients on a range of financial products. Deborah advises Stuart and Belinda to set up a self-managed superannuation fund structure to take out a loan to buy the property (for about $1.4m) to live in and run the bed and breakfast, and to buy life insurance and income protection insurance (from a related body corporate of Truthful Bank) at a level that would cover the debt they expected to incur to buy the property. An Truthful Bank business banker, whom Deborah arranges to consult them, tells them they should be able to borrow enough money to achieve their goal. Stuart and Belinda sell their home, pay off some of their debts, establish the self managed superannuation fund (at a cost of $4,000) and roll over their current balances into that fund. They take out the recommended insurances, at a considerable on-going annual premium cost. Wonderful Advice P/L charges an up-front fee of $5,500 and a $3,500 annual fee for ‘ongoing advice’. Truthful Bank receives $4,200 in upfront commissions as a result of the implementation of the advice. This helps Deborah achieve her monthly bonus targets. Truthful Bank then tells Stuart and Belinda that their overall financial situation will not support a loan of the size needed to carry out their plans.

Required

Given the information above, review the case study and present an argument as to whether Deborah has acted in the ‘best interest’ of her clients in terms of both the Corporations Act and the Financial Planners and Advisers Code of Ethics 2019.