Tutorial 5

Question 1

What does asic recommend regarding when the FSG should be provided (2)

Answer 1

1. Give in enough time to give client opportunity to consider it’s contents.
2. Make FSG available on website and in offices.

Question 2

Whos responsibility is giving the FSG?

Answer 2

Licensee responsibility.

Question 3

What is the limit on providing the FSG in the case of time critical cases

Answer 3

5 days.

Question 4

What needs to be provided in an FSG

Answer 4

1. Title of FSG
2. Date of FSG
3. Name and contact details of licence
4. Name and details of AR
5. AR number
6. Statement of Purpose of the FSG
7. information about the kinds of services.
   8, Renumberation details

Question 5

What is a binder

Answer 5

An AR for an insurer. e.g. Claims processing for an insurer - for a backoffice payment

Question 6

When to provide an FSG

Answer 6

As soon as practicable after it becomes apparent that a financial service will be or is likely to be provided.

Question 7

What is required for time critical

Answer 7

1. Client expressly instructs

2. It in not reasonably practical to provide the client with FST before the service is provided.

Question 8

When is an FSG not required

Answer 8

1. Not a retail client
2. Financial Service relates to basic deposit products
3. General information in public forum but only if the right disclaimers is provided at the start.
4. Already received an up to date FSG

Question 9

If general advice in a public forum what may be provided

Answer 9

1. Name and contact details of providing entity
2. Info on renumeration that anyone will receive
3. Information about associations or benefits that could influence the advice

Question 10

General advice warning and no FSG info, which one needs to be given first and which one can be given in the middle of a public presentation?

Answer 10

FSG info must be given first.

Question 11

When can you NOT give an FSG to a client’s agent (e.g) EPOA?

Answer 11

when they are a licensee

Question 12

Can you just tell a client that the FSG is available on the website?

Answer 12

No

Question 13

Can you arrange for an intermediary to provide an FSG. e.g. Stockbroker recommending stocks to a FPs client

Answer 13

Yes

Question 14

Is failure to provide an FSG a strict liability offense?

Answer 14

Yes

Question 15

Can you combine SOA and FSG

Answer 15

No

Question 16

Can you combine FSG and PDS

Answer 16

Yes but under strict provisions (product providers)

Question 17

Do you need to provide a new FSG with each piece of advice ?

Answer 17

No, only if updated.

Question 18

How many days to give asic report if breach or likely breach

Answer 18

10 days

Question 19

When must you give a breach report (conditions)

Answer 19

a) You breach obligations
b) or likely to breach
c) the breach is significant

Question 20

What is the max penalty for not reporting a breach?

Answer 20

For an individual, —$1.05 million or three times the benefit derived or loss avoided, or
imprisonment for two years, or both;; and (b) for a company, the greater of $10.5 million
or three times the benefit derived or loss avoided, or 10% annual turnover capped at $525
million for the preceding 12 months before the contravention or start of the contravention.
(Note: See s912D(1B), s912D(3), s1317E, s1317G and Sch 3)

Question 21

if the RM walks out the door is that reportable

Answer 21

Yes, if there is not someone to replace.

Question 22

is it a breach to not provide cashflow projections (as afsl)

Answer 22

Yes

Question 23

If there is a benefit, but it is trivial, does this satisfy best interest?

Answer 23

No, does not satisfy BID

Question 24

When will scoping advice lead to breach of BID

Answer 24

When you scope out advice that is inconsistent with their relevant circumstances and the advice they are seeking.

Question 25

modified BID applies when (2)

Answer 25

1. Basic banking or General insurance, consumer credit

2. Employee of an ADI

Question 26

Modified BID needs to satisfy:

Answer 26

First Three Steps of safe harbour

Question 27

What is difference between relevant circumstances and scope

Answer 27

RC = Their situation 
Scope = What advice you will be providing