Virgin Financial Services Pty Ltd (Virgin) is a recently incorporated company that you assisted Virginia and Richard in establishing to run a financial planning business. The company does not have their own Australian Financial Services license but is a corporate authorised representative of MLC Ltd. The directors of the Virgin are: Virginia (the MD) and Richard Both have had several years of financial planning and accounting experiences and in the last 4 years they both focused on being financial advisers. Richard is aware that taxation is an important issue in financial planning and has become registered as a recognised tax adviser as well. Both have a good understanding of the legal requirements involved in advising clients. They were individual clients of the firm for many years and now that they have started up a new business they come to you for advice on the following issues: Recently the Government established a review on the quality of advice called the Quality of Advice Review by Michelle Levy. Virginia and Richard have the following queries regarding the review: What was the purpose of the review? Will it achieve the aim for being able to provide advice to ensure that all Australians have access to high quality, accessible and affordable financial advice.’ Our average fee for the provision of advice is $3,000 to $7,500. How will the proposals affect our business model? Given our fee level and assuming that many clients could not afford our fees, what type of clients should we focus on? Does the Review impact on the best interest rule in s961B of the Corporations Act? Virginia and Richard do not want an analysis of the complete Quality of Advice Review Report but just an answer to the above issues raised by them. Required: Please draft a response to the above queries from Virginia and Richard. In your response you are expected to analyse the relevant parts of the Quality of Advice Review as well as express and justify your opinion in relation to the matters raised by the clients.
Virgin Financial Services Pty Ltd (Virgin) is a recently incorporated company that you assisted Virginia and Richard in establishing to run a financial planning business. The company does not have their own Australian Financial Services license but is a corporate authorised representative of MLC Ltd.
The directors of the Virgin are:
Virginia (the MD) and
Richard
Both have had several years of financial planning and accounting experiences and in the last 4 years they both focused on being financial advisers.
Richard is aware that
Both have a good understanding of the legal requirements involved in advising clients.
They were individual clients of the firm for many years and now that they have started up a new business they come to you for advice on the following issues:
Recently the Government established a review on the quality of advice called the Quality of Advice Review by Michelle Levy.
Virginia and Richard have the following queries regarding the review:
- What was the purpose of the review?
- Will it achieve the aim for being able to provide advice to ensure that all Australians have access to high quality, accessible and affordable financial advice.’
- Our average fee for the provision of advice is $3,000 to $7,500. How will the proposals affect our business model?
- Given our fee level and assuming that many clients could not afford our fees, what type of clients should we focus on?
- Does the Review impact on the best interest rule in s961B of the Corporations Act?
Virginia and Richard do not want an analysis of the complete Quality of Advice Review Report but just an answer to the above issues raised by them.
Required:
Please draft a response to the above queries from Virginia and Richard. In your response you are expected to analyse the relevant parts of the Quality of Advice Review as well as express and justify your opinion in relation to the matters raised by the clients.
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