Case study: FutureLife Financial Services
Shaun Watkins (age 44) established FutureLife Financial Services 15 years ago. Five years ago he brought
Emily Redbank (age 49) into the partnership. They are both owners and principals and hold their own
Australian financial services (AFS) licence. You are a senior financial adviser employed for the past
three years by FutureLife, with an offer for equity in the business within the next few years. With the
business having experienced exceptional growth over the past 12 months, FutureLife has decided they
need an additional adviser. Rather than hire outside the firm, they have opted to transition their young
support staff member, Josie, into an adviser role.
Shaun’s clients are predominantly self-funded retirees, with a small number who require specialised
aged care financial advice. His clients have accumulated their wealth through successful small businesses.
Shaun prefers to look after his existing clients, with any new clients referred to yourself or Emily.
Emily’s clients (age 35 to 55) are successful wealthy professionals from a mix of professional backgrounds.
Given their wealth, Emily has recommended self-managed superannuation funds to a number of these
clients.
Josie has worked in the practice in a number of support roles over the last four years while she was
completing her university degree. Josie graduated 12 months ago with an approved Bachelor of Commerce
(Financial Planning) degree. As part of her career planning, you have agreed to supervise Josie through
her professional year, and she is currently in the third quarter of her professional year.
You have 10 years experience as a financial adviser and are fully qualified to provide advice on a wide range
of strategies and products. Half of your clients followed you to FutureLife, from your previous financial
adviser role. When Shaun or Emily is on leave, you also help out by providing advice to their clients. -----------------------------------------------------------------------------------------------------------------------   Scenario 1 — FutureLife clients: Les and Marg Russell
Les and Marg Russell are both in the late 60s and have been clients of the practice for many years,
mainly dealing with Shaun. They have one child, a son Robert, with whom they have a strained relationship,
and they are not on speaking terms. They do however see their only grandchild, Jennifer (age 22), who is
Robert’s daughter, on a regular basis. As Jennifer is just about to complete her university degree, Les and
Marg think it would be a good time to give Jennifer $200,000, as they have significant wealth accumulated
and would prefer to see Jennifer benefit from the funds while they are alive.
Les and Marg have already spoken to Shaun about how they believe the money should be managed and
invested. Before telling Jennifer about the gift, Les and Marg asked her what her financial goals are.
Jennifer said she wasn’t sure but would like to travel overseas or save towards a deposit for her own home.
Les and Marg insist that Jennifer receives financial advice before they gift her the money, to ensure she has
an effective financial plan in place. They think it would be better for Jennifer to deal with an adviser closer
to her own age and suggest that Josie would be suitable. Les and Marg have always found Josie to be
friendly over the years and are comfortable that you and Shaun will be mentoring Josie.
This will be Josie’s first meeting (indirectly supervised) as a provisional relevant provider. You ask Josie
about her current plan for the interview, and she provides you with the following outline:
Jennifer’s grandparents have already spoken to Shaun about how Jennifer’s gift should be
managed and invested. Les and Marg have been Shaun’s clients for a long time and have done
well financially, and I’m assuming they know what they are talking about and will be able to
provide Jennifer with the right guidance on investments too.
To save a bit of time, I’ve already emailed the FSG to Jennifer and I’ll get her to acknowledge
she has received it, when I see her.
The money will be given to Jennifer as cash. Given that Jennifer is in her early 20s, she has
a long-term investment horizon, and it sounds like high-growth investments will be an
appropriate solution for her. We’ve got some really great model portfolios of direct shares
on our approved product list, which are currently generating high returns for other clients,
that I can talk to her about. I am a bit concerned her grandparents may not be happy for her
to put all the funds just in shares, so I may need to check with them about that.
This meeting should be straightforward as we will focus just on investing the $200,000 gift
and I doubt whether Jennifer will need any insurance, given her young age. She will eventually
inherit all of her grandparents’ money anyway, and I’m sure they would look after her if
anything was to happen to her in the meantime. -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ANSWER THE FOLLOWING 3 QUESTIONS USING 1200 WORDS --------------------------------------------------------------------------------------------------------------------------------------- (a) Define ‘unconscious bias’ and examine how it may be influencing Josie while she is planning for the
meeting with Jennifer. (10 marks)
(b) Discuss the intent of Standard 1 and Standard 2 of the Financial Planners and Advisers Code of Ethics
2019 and analyse Josie’s conduct. Include in your response a discussion of whether, prior to the
meeting, Josie complies with the standards in her dealings with Jennifer.
Note to students: this question is asking you to analyse the advisers actions against compliance with
Standard 1 and Standard 2 — leading up to the appointment, rather than after the meeting has
occurred. (10 marks)
(c) Examine and discuss Josie’s compliance with the value of Fairness in the Financial Planners and
Advisers Code of Ethics 2019, if she proceeds with the interview as planned. (5 marks)
Support your answers with reference to the case study and scenario facts and research.