Fins5537 Individual Assignment Essay

2893 Words Feb 6th, 2014 12 Pages


Executive Summary
This report states a review of the process of dispute in relation to inappropriate financial advice provided by the financial service provider with investment in the managed funds. The applicants, which are Ms E and her two sons, Mr A and Mr C, claimed for the losses which resulted from the failure of performing his duty for the clients of financial service providersMr R. The Panel has made the decision for this financial dispute following the Australian legislation- Corporation Act (Cth) 2001, which indicated that the FSP failed to provide some key disclosure requirements associate with the financial advice to the applicants and breached a number of statutory obligations
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Lastly, some comments have been stated regard as the aspect of industry. For the clients, carefully analysis of investment and cautiously choosing the FSP have been mentioned, while for the FSP, compliance with the regulation and know the clients have been noted. The new law could be introduced for the facilitation of financial market.

During the early 2006, Ms E and Mr R established a business relationship for the facilitation of mortgages for the clients of Ms E. In March 2007, Ms E was interested in the “Fund”, which was an investment with a broad selection of managed funds may gave the higher gains, promoted by another financial planner- Mr S and was mentioned by Mr R previously. Later on, a further discussion of the investment of the Fund occurred between Ms E and Mr R. In 26 June 2007, Ms E and two of her sons- Mr A and Mr C, decided to invest into the Fund under the fixed interest rate 9.1% per annum mature on 5 years. Ms E invested $100,000, and both of her sons invested $50,000, respectively. A year later, in June 2008, Ms E was asked for the prepayment of interest on the investment loans with interest rate at 9.65%. And also, she was surprised to find that the cost of exit would be about $28,308 and $12,144 in fees.

The dispute has been occurred between two parties: the applicants-Ms E and two of her sons; and the

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