DFP Module 1 Workplace Simulation: Case Study on Financial Advice

This assignment provides a solution to a workplace simulation within the Diploma of Financial Planning (DFP) Module 1, focusing on a real Financial Ombudsman Service (FOS) case. The assignment requires analyzing a FOS determination involving a client complaint against a financial planning firm and its advisor. The solution summarizes the advice provided, the client's grievances, and the advisor's adherence to the six-step financial planning process. It also details FOS's decision, referencing key documents like the Financial Services Guide (FSG), Fact Find, Risk Profile, Statement of Advice (SOA), Product Disclosure Statement (PDS), and Authority to Proceed. The assignment identifies potential failures in communication and procedural obligations, offering insights into why financial planners must diligently follow regulations. Desklib provides this assignment as a study resource along with other solved assessments and past papers.

DFP Module 1Workplace Simulation1505
Diploma of Financial Planning
Module1Workplace Simulation
Submission Instructions:
Key steps that must be followed:
 Please complete the Declaration of Authenticity at the bottom of this page.
 Once you have completed all parts of the assessment and saved it (eg. to your
desktop computer), login to the Monarch Learning Management System (LMS) to
submit your assessment.
 In the LMS, click on the file ”Submit DFP Module 1 workplace simulation” in the
Module 1 section of your course and upload your assessment file/s by following
the prompts.
 Please be sure to click “Continue” after clicking “submit”.This ensures your
assessor receives notification – very important!
Declaration of Understanding and Authenticity *
I have read and understood the assessment instructions provided to me in the Learning Management System.
I certify that the attached material is my original work. No other person’s work hasbeen used without due
acknowledgement. I understandthat the work submitted may be reproduced and/or communicated for the purpose
of detecting plagiarism.
Student Name*: Date:
* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the
above student declaration.

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
Important assessment information
Aims of this assessment
This simulated workplace assessment activity is conducted to the standard expected in
the workplace in order to demonstrate consistent performance of typical activities
experienced in the financial services industry.
This assessment focusses on a real life scenario where a financial planning firm was
taken to the Financial Ombudsman Service (FOS) as a result of a client complaint. This
compliant arrived at the FOS after the adviser and client unsuccessfully attempted to
navigate a solution via the internal complaints process offered by the financial planning
firm. This assessment addresses the six steps of the financial planning process in the
context of a client compliant. Using the case study from the FOS, it requires the six step
process to be broken down in detail to identify where key communication and
procedural obligations (if applicable) were (and were not) followed. Key areas of focus
include the Financial Services Guide (FSG), Client Questionnaire, Risk Profile, Statement
of Advice (SOA), Product Disclosure Statement (PDS), Authority to Proceed, and
arrangements for review.
Marking and feedback
This assignment contains 1 assessment activitycontaining specific instructions.
This particular assessment forms part of your overall assessment for the following units
of competency:
 FNSCUS505
 FNSCUS506
 FNSFPL501
 FNSIAD501
 FNSFPL505
Grading for this assessment will be deemed “competent” or “not-yet-competent” in line
with specified educational standards under the Australian Qualifications Framework.
What does “competent” mean?
These answers contain relevant and accurate information in response to the question/s
with limited serious errors in fact or application. If incorrect information is contained in
an answer, it must be fundamentally outweighed by the accurate information provided.

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
This will be assessed against a marking guide provided to assessors for their
determination.
What does “not-yet-competent” mean?
This occurs when an assessment does not meet the marking guide standards provided
to assessors. These answers either do not address the question specifically, or are
wrong from a legislative perspective, or are incorrectly applied. Answers that omit to
provide a response to any significant issue (where multiple issues must be addressed in
a question) may also be deemed not-yet-competent. Answers that have faulty
reasoning, a poor standard of expression or include plagiarism may also be deemed not-
yet-competent. Please note, additional information regarding Monarch’s plagiarism
policy is contained in the Student Information Guide which can be found here:
http://www.monarch.edu.au/student-info/
What happens if you are deemed not-yet-competent?
In the event you do not achieve competency by your assessor on this assessment, you
will be given one more opportunity to re-submit the assessment after consultation with
your Trainer/ Assessor. You will know your assessment is deemed ‘not-yet-competent’ if
your grade book in the Monarch LMS says “NYC” after you have received an email from
your assessor advising your assessment has been graded.
Important: It is your responsibility to ensure your assessment resubmission addresses all
areas deemed unsatisfactory by your assessor. Please note, if you are still unsuccessful
in meeting competency after resubmitting your assessment, you will be required to
repeat those units.
In the event that you have concerns about the assessment decision then you can refer
to our Complaints & Appeals process also contained within the Student Information
Guide.
Expectations from your assessor when answering different types of assessment
questions
Knowledge based questions:
A knowledge based question requires you to clearly identify and cover the key subject
matter areas raised in the question in full as part of the response.
Skill based questions:

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
Where you are asked to write as though you are speaking to a client, your answers must
show your ability to:
 understand your client’s concerns/perspective/views
 show empathy
 display a professional response
 explain ideas clearly and simply so your client can understand the issues
Good luck
Finally, good luck with your learning and assessments and remember your trainers are
here to assist you 

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
Assessment Activity
Workplace Simulation
FOFA – Dispute Resolution
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all 7 questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this
assessment
 Estimated time for completion of this assessment activity: 3-4 hours

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
Background
Module 1 covered the legal obligations and the six-step process financial advisers must follow when
providing financial advice to clients. Not adhering to these obligations will inevitably lead to client
complaints. Depending on the circumstances, this may lead to a range of adverse outcomes for an
adviser. This includes monetary penalties, the AFSL withdrawing an adviser’s letter of authority that
allows them to continue to work as an authorised representative, or in very serious circumstances,
criminal charges being applied.
As indicated in the course materials, the Financial Ombudsman Service (FOS) is an approved external
dispute resolution scheme approved by ASIC. Go to www.fos.org.au for more information. While
seeking to resolve a client dispute internally is preferable compared to allowing a dispute to reach
FOS, sometimes internal dispute resolution processes break down. It is at this point that every
obligation you have learnt about in your studies will be analysed by FOS in detail in regard to the
advice process.
At the end of this work place simulation, we have included a real FOS Case Determination between
an aggrieved client and a financial planning firm. FOS protects the identity of both the financial
planning firm and the client. Because the determination is a legal document, the client is called the
“Applicant”, and the financial planning firm which stands for Financial Services Provider is referred to
as “FSP”. You will see it also refers to the actual financial adviser as “Ms A”, and the actual clients as
“Mr H” and “Mrs H”. The FOS determination is 10 pages in length. While the client was not
successful in this FOS claim against the financial adviser or the firm, it illustrates very salient insight
into why financial planners must follow their obligations so carefully. You must read this document in
full in order to answer the questions in this assessment.
For your general interest, the FOS case number is 200885. If you ever want to source this case
directly from FOS for any reason, it can be found by going to www.fos.org.au and searching under
“Decisions” in the top right search section of the FOS homepage. You can then type in the Case
Number.
Required
First, you are to read carefully the FOS Determination (note: it is contained in Appendix 20 of the
Module 1 course materials). Second, you are then required to answer the following questions in the
context of the information you have learnt in Module 1.
1. Summarise the advice recommended by Ms A
Ms A suggested investing their money in a multi-sector retail investment area. Clients explain that Ms A
advised the investment platform on the basis “she would review our investment on continuous basis, and to
contact them in case of any massive fluctuations within performance.

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
2. Stipulate the date Ms A prepared the SOA, and the date the subsequent advice was actioned
including the amount invested.
SOA constructed on 18th April 2006. 19th April 2006, advice was actioned and Risk Profile altered and on 20th the
cheque was deposited in the bank of $334,000.
3. Summarise the client’s grievance
The complaints of the client was that they were promised of frequent meetings but even after calling MS A, the
person was unavailable and the client had problems as they were promised to be reviewed on a continuous
basis and were out of contact for more than 3 months. They increased their risk profile from the moderate to
aggressive on the suggestion of Ms A and were not said that they would have to pay a fee if they wished to
change their asset allocation. The client were not given the FSG and during the time of investment the client
were assured that Ms A’s other investors receive return of 15-20% which they were not receiving.
4. List precisely what parts of the 6 Step Process Ms A followed (…or did not follow) based on
your analysis of the case.
Step 1: Ms A followed step 1 by following the collection of the risk profile, data and from her evidence
provided a copy of the FSG. The couple signed the fact find document as being correct.
Step 2: Ms A discovered the goals and objectives of the couple by filling out the fact finding document and
having the clients sign this data as precise.
Step 3: Ms A did try to discover any financial issues that may come for the couple, by enquiring about future
expenses in regards to the probability of purchasing a house, but the couple indicated that their time period
was 5-7 years in the questionnaire.
Step 4: Ms A did construct the SOA for the clients and provided all the needed information, and the clients
signed the documents to address that this was true. But Ms A did not write the services that would be provided
to the couple and this is what created the problem.
Step 5: Ms A did incorporated the agreed plan
.Step 6: Ms A did not review the couples plan, which was supposed to be done.

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
5. Important: The required minimum word length for this answer is 300 words. Refer to the
“Reasons for Decision” section on page 5 of the FOS Determination. Summarise FOS’s
decision, and make reference to the following issues:
a. FSG
b. Fact Find (i.e. Client Questionnaire)
c. Risk Profile
d. Statement of Advice (SOA)
e. Product Disclosure Statement (PDS)
f. Authority to Proceed
In accordance to FSG it is said that the client needs to sign the FSG and once it is signed it asks the consultant
to provide them with an ongoing service with respect to the investments that have been advised. However, in
this case, it is seen that the consultant has not done the same and therefore is liable to be answered for not
doing the same. The consultant can be charged a penalty as well.
The fact find provides the questionnaire with the help of which the clients provide all their answers and the
investments they want to undertake and their goals and objectives but Ms A did not look into the same and
prepared something own. This is ought not to be done.
The risk profile addressed the risk taking mentality and the kind of investments the client want to undertake.
However, Ms A influenced the client to move from moderate to above moderate without their consent and
this created additional pressure and risk for the client.
The Statement of Advice that has been created does not provide all the aspects that needs to be mentioned

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
and Statement of Advice prepared has not been properly fed to the client in order to provide them with the
precise knowledge about their investment. This led to several issues and finally the compelled the client to
move to another consultant.
The product disclosure statement was incomplete and therefore when the client wanted to change their
investment assets they were not aware that fees would be charged for the same. The disclosures were not
totally met and the consultants after the completion of the disclosure statement had to sign the same.
The Authority to Proceed was incomplete and this form is only signed after all the above documents have been
completely understood by the client. Therefore, without providing proper knowledge Ms A completed all the
formalities.
6. Refer to “Step One” of the six-step financial planning process outlined in the course
materials - specifically the sub-heading titled “capturing a client’s risk tolerance” and “what
is the client’s real risk profile”. Explain what practical measures you think Ms A could have

DFP Module 1Workplace Simulation1505
Units: FNSCUS505, FNSCUS506, FNSFPL501, FNSIAD501, FNSFPL505
undertaken so that Mr and Mrs H understood the risks of Ms A’s recommended investment
portfolio better?
In order to provide effective advices to the clients the consultant needs to have adequate knowledge about the
objectives, goals and the desires of the client and their attitude towards investments, risks , retirement
planning etc. Hence, Ms A had to determine the attitude of the client with respect to inflation, present income
need, need of liquidity, issues regarding capital loss, demand for capital and growth, taxation factors, the level
of security desired from the investment, volatile of the investment in the short term etc. Ms A had to ensure
that the goals of the couple were in line with the actual demand in the market.
7. Refer to “Step Six” of the six-step financial planning process outlined in the course materials.
Explain why you think FOS made a finding that despite Ms A not reviewing Mr and Mrs H’s
portfolio, Ms A was not at fault. Explain in the context of the purpose of reviewing, revising
and maintaining a financial plan.
It is due to the fact that it is essential to make sure that the recommendations are suitable for the client and
any changes had to be reviewed on a yearly basis. As the clients were there with Ms A, it suggests that Ms A
had been reviewing the portfolio and therefore the couple were not bothered. The clients on the other hand
monitored their investments through internet in every six months so the clients had knowledge about their
investment movements. In addition, when the couple tried to contact with Ms A, she defended it by telling to
wait out the scenario as the market would improve and at that point of time the client accepted the same.
Therefore, Ms A is not at fault.