ETHICS AND PROFESSIONAL ADVICE IN FINANCIAL ADVICE.

Running head: ETHICS AND PROFESSIONAL ADVICE IN FINANCIAL ADVICE
Ethics and Professional Advice in Financial Advice
Name of the Student
Name of the University
Authors Note
Course ID

Running head: ETHICS AND PROFESSIONAL ADVICE IN FINANCIAL ADVICE
Table of Contents
Scenario 1: Question 1...............................................................................................................2
Requirement (a)......................................................................................................................2
Barriers to Ethical Decision-Making.....................................................................................2
Compliance with the Relevant Standard of the FASEA Code of Ethics...............................2
Compliance with a Relevant Value of the FASES Code of Ethics........................................3
Requirement (b).........................................................................................................................4
Question 2:.................................................................................................................................5
Answer to A:..........................................................................................................................5
Answer to B:..........................................................................................................................7
Answer to C:..........................................................................................................................8
Scenario 3:................................................................................................................................10
Answer to A:........................................................................................................................10
Answer to B:........................................................................................................................10
Scenario 4:................................................................................................................................11
Answer A:............................................................................................................................11
Corporation Act 2001:......................................................................................................11
FPA and AFA Codes:.......................................................................................................12
FASEA Code of Ethics:...................................................................................................12
Answer to B:........................................................................................................................12
References................................................................................................................................14

Running head: ETHICS AND PROFESSIONAL ADVICE IN FINANCIAL ADVICE
Scenario 1: Question 1
Requirement (a)
Barriers to Ethical Decision-Making
The presence of certain barriers of ethical decision-making can be seen that may
influence Sam and they are discussed below:
Rationalisation – Rationalisation and bias can influence the relationship between the
financial adviser and the client in which the financial adviser acts in such a manner that is
conflicting to the best interest of the client which can lead to unethical decision perhaps. Self-
serving explanation, involvement of a degree of self-deceptions and others are the part of this
barrier; and this has relevance in the provided case. In the provided case, Sam is serving self-
explanation by assuming that Kelly has the knowledge of investments and financial planning.
Sam is also assuming that Kelly will be interested in growth investments. These self-serving
explanations develop the ethical decision-making barrier of rationalisation (Légaré and
Thompson-Leduc 2014).
Implicit Bias – Implicit bias or unconscious bias can be considered as a mental process
containing attitudes or behaviours or stereotypes established over time and this affects the
behaviour as well as the decision-making process. In the provided situation, the presence of
halo-effect can be seen in Sam’s behaviour because she is considered that Kelly’s parents
would look after her since they are wealthier. These aspects lead to implicit bias that is a
major barrier in decision making (Kocet and Herlihy 2014).
Compliance with the Relevant Standard of the FASEA Code of Ethics
The relevant standards are discussed below:
Best Interests – Financial advisers are needed to act in the best interest of the clients so that
their financial wellbeing can be secured. Through various assumptions and self-explanations,