You work at a Financial Planning practice called 'Alert Advising' in inner Brisbane with a colleague and Licensee, Ralph Rose.Ralph is in hospital after having a knee reconstruction and he has asked you to finalise an insurance contract he was preparing for his clients, Marion and Max Masters. Marion and Max are renting an apartment in West End, and they currently hold a home contents policy with ZZK Insurance Company for cover of $41, 000. They realise this cover is much less than the current value of their home contents.Therefore, they wish to increase the policy value as soon as possible.

Among other things, Marion and Max have some high-value assets which they keep in their apartment. The details of some of the items are set out below:

Cost Replacement Value

Smart TV $11,500 $10,500

Home Computer $7,500 $6,500

Jewellery $65,500 Unknown

Cash $22,500 $22,500

Ralph has given you the following instructions to finalise the insurance contract:

• sell Marion and Max a $3 million householders' policy with Exotic Insurance Company which will give much greater cover than the value of their current household assets. When you queried this with Ralph and asked him why he was over-insuring the clients household assets he said he wanted to ensure they had capacity for the asset values to increase over time. (Ralph also mentioned that he will receive a generous commission on this policy, but that this fact did not influence his advice to Marion and Max.).
• ask Marion and Max for a cash deposit today of $10,000 to secure the policy
• tell Marion and Max that an 'indemnity policy' is better than a 'replacement policy' because the premiums are cheaper.
• tell Marion and Max to not agree to any 'excess' cover on their householders policy

You know for a fact that Ralph did not find out if it would have been cheaper to increase the value of contents cover under the ZZK policy, instead of taking out a new one with Exotic Insurance Company.

1. Discuss the ethical dilemmas and/or conflicts of interest that may be present in this scenario.
2. Suggest actions that can be taken to remove, avoid or mitigate the dilemmas and conflicts in the situation with Marion and Max.
3. What are the key areas where ethical behaviour needs to be improved at 'Alert Advising'?