FPC001B Economic and Legal Context for Financial Planning
Task:
Jane has now decided that she wishes to invest part of her inheritance and has come back to you for further advice. Her visit was especially motivated by a recent plunge of the Australian dollar by over 20% against the United States dollar* and she was wondering if her objectives might need to change as a result of the current economic environment.
Furthermore, being a lawyer, she wants to know what legal protections are in place that could be relied on to ensure she receives the most appropriate advice from you.
On a somewhat unrelated note, Jane is also concerned about the financial wellbeing of her parents, Jill and Marcus Kurmond. They are both 62 years old and have recently had a discussion with Jane about their possible retirement aspirations. Jane suggested they get some advice from you as well, so that they may put some strategies in place enabling them to achieve their retirement goals. With their consent, she has collected the following information for you ahead of a meeting they have scheduled with you:
• Marcus is a construction worker and project manager, and his income before tax is $150,000 per annum. Jill works as an administrative assistant and earns $50,000 p.a. before tax.
• Marcus has a superannuation balance of $350,000 invested in a high growth fund. Jill’s superannuation balance is $120,000 and is currently invested in a growth fund.
• They own their home, purchased 20 years ago and currently worth $750,000. They have no dependants, no debt and have $150,000 cash in the bank.
• They would like to retire in four years’ time and will need $60,000 p.a. for living costs.
LO1: Explore the role of intermediaries in financial markets.
LO2: Explain the impact of current issues and key economic and financial indicators on the Australian and global financial markets.
LO4: Explore the main sources of law and the regulatory structure of financial services law in Australia.
LO5: Explain the various obligations imposed on participants by financial services legislation.
Identify four (4) obligations placed on financial services providers under the current legislative and regulatory framework aimed at ensuring that consumers, like Jane, are protected and receive appropriate financial advice.
Discuss the legislative and/or regulatory source of these obligations and how the obligations are intended to protect consumers. Students may include legislative and regulatory framework obligations which are l
