Fnscu 5505 Management System Answers Assessment Answer

Assessment Activity

Workplace Simulation

FOFA – Dispute Resolution

Ms A suggested investing their money in a multi-sector retail investment area. Clients explain that Ms A advised the investment platform on the basis “she would review our investment on continuous basis, and to contact them in case of any massive fluctuations within performance.

SOA constructed on 18^th April 2006. 19^th April 2006, advice was actioned and Risk Profile altered  and on 20^th the cheque was deposited in the bank of $334,000.

The complaints of the client was that they were promised of frequent meetings but even after calling MS A, the person was unavailable and the client had problems as they were promised to be  reviewed on a continuous basis and were out of contact for more than 3 months.

They increased their risk profile from the moderate to aggressive on the suggestion of Ms A and were not said that they would have to pay a fee if they wished to change their asset allocation. The client were not given the FSG and during the time of investment the client were assured that Ms A’s other investors receive return of 15-20% which they were not receiving.     

Step 1: Ms A followed step 1 by following the collection of the risk profile, data and from her evidence provided a copy of the FSG. The couple signed the fact find document as being correct.

Step 2: Ms A discovered the goals and objectives of the couple by filling out the fact finding document and having the clients sign this data as precise.

Step 3: Ms A did try to discover any financial issues that may come for the couple, by enquiring about future expenses in regards to the probability of purchasing a house, but the couple indicated that their time period was 5-7 years in the questionnaire.

Step 4: Ms A did construct the SOA for the clients and provided all the needed information, and the clients signed the documents to address that this was true. But Ms A did not write the services that would be provided to the couple and this is what created the problem.

Step 5: Ms A did incorporated the agreed plan

.Step 6: Ms A did not review the couples plan, which  was supposed to be done. 

In accordance to FSG it is said that the client needs to sign the FSG and once it is signed it asks the consultant to provide them with an ongoing service with respect to the investments that have been advised. However, in this case, it is seen that the consultant has not done the same and therefore is liable to be answered for not doing the same. The consultant can be charged a penalty as well.  

The fact find provides the questionnaire with the help of which the clients provide all their answers and the investments they want to undertake and their goals and objectives but Ms A did not look into the same and prepared something own. This is ought not to be done.

 The risk profile addressed the risk taking mentality and the kind of investments the client want to undertake. However, Ms A influenced the client to move from moderate to above moderate without their consent and this created additional pressure and risk for the client.

The Statement of Advice that has been created does not provide all the aspects that needs to be mentioned and Statement of Advice prepared has not been properly fed to the client in order to provide them with the precise knowledge about their investment. This led to several issues and finally the compelled the client to move to another consultant. 

The product disclosure statement was incomplete and therefore when the client wanted to change their investment assets they were not aware that fees would be charged for the same. The disclosures were not totally met and the consultants after the completion of the disclosure statement had to sign the same.   

The Authority to Proceed was incomplete and this form is only signed after all the above documents have been completely understood by the client.  Therefore, without providing proper knowledge Ms A completed all the formalities.

In order to provide effective advices to the clients the consultant needs to have adequate knowledge about the objectives, goals and the desires of the client and their attitude towards investments, risks , retirement planning etc. Hence, Ms A had to determine the attitude of the client with respect to inflation, present income need, need of liquidity, issues regarding capital loss, demand for capital and growth, taxation factors, the level of security desired from the investment, volatile of the investment in the short term etc.

Ms A had to ensure that the goals of the couple were in line with the actual demand in the market.   

It is due to the fact that it is essential to make sure that the recommendations are suitable for the client and any changes had to be reviewed on a yearly basis. As the clients were there with Ms A, it suggests that Ms A had been reviewing the portfolio and therefore the couple were not bothered.

The clients on the other hand monitored their investments through internet in every six months so the clients had knowledge about their investment movements. In addition, when the couple tried to contact with Ms A, she defended it by telling to wait out the scenario as the market would improve and at that point of time the client accepted the same. Therefore, Ms A is not at fault.