Financial Planner Case Study

Question 1

1.0 Introduction

Financial planner as a provider of financial services, Australian Securities and Investment Commission (ASIC) as a financial industry regulator, the both two forms a mutual relationship with customer. Financial planners provide customers with financial services enable customers to gain profit in a reliable way; ASIC regulate financial planner, protect the interests of customers. This mode forms health financial market system. However financial planner’s purpose is pursuit for higher profits. In the process, the financial planner is likely to be violations. It is to the ASIC regulatory ability put forward certain requirements. Referring this question, there are several issues we should solve which can be helpful to

In this case, the Commonwealth Bank of Australia is not able to exercise his right as a financial planner's responsibility and obligation, in order to obtain higher profits, to provide customers the adverse information to customers, make customer interests is damaged. Due to Commonwealth Bank of Australia the improper pursuit of profit, even caused some customers investment all fail, especially during the financial crisis, caused huge losses to the customer. Commonwealth Bank of Australia of this kind of behaviour seriously disrupt the specification of financial market order, caused the bad influence on financial market. However in this case, we can see clearly that Australian Securities and Investment Commission as industry supervisor did not make the appropriate treatment for Commonwealth Bank of Australia’s unfairly achieve profit behaviour. The report concluded that “ASIC has limited powers and resources but even so appears to miss or ignore clear and persistent early warning signs of corporate wrongdoing or troubling trends that pose a risk to consumers.” For the irregularities of the industry, ASIC is negligence of duty, did not stop this bad behaviour in time, industry supervisor did no financial planners responsibilities for constraints which made the financial market and the customer have suffered huge losses. In contrast, Australian Securities and Investment Commission, as a industry supervisor, once it's regulation when there is no practical significance, its power will be built on stilts, soon loses control of the industry, causing irreversible decline. If we want to perfect the supervision mechanism of ASIC, we first need to understand what obligations financial planners should fulfil. Synthesize above industry vocational demand, as a financial planner, fulfil the fiduciary obligation to perform, to keep the customer loyalty. Only in this way can harmony