ASIC financial adviser exam, Applying the best interests duty in practice question: Australian share fund to buy with A$50,000

ASIC examApplying the best interests duty in practice

Mei Ling, 34, a nurse, asks her adviser, Tobias, for advice only on which Australian share fund to buy with A$50,000 she has saved. In the fact find Tobias learns that she also owes A$30,000 on a credit card charging 21% a year. Acting in her best interests MOST likely requires Tobias to…

A advise only on the share fund as asked: she set the scope, and the card debt sits outside it
B advise on the share fund once she signs an acknowledgement that her debts are outside the scope
C refuse to give her any advice at all until she has repaid the whole card balance
D raise the debt with her, as a reasonable adviser would see it as relevant to the subject matter

Show the answer and explanation

Answer: D. raise the debt with her, as a reasonable adviser would see it as relevant to the subject matter

Section 961B(2)(b) of the Corporations Act 2001 (compilation 19 Sep 2026) requires Tobias to identify the subject matter of the advice and the circumstances reasonably relevant to it, and s961E judges each step by what a person with reasonable expertise would regard as in her best interests. Investing A$50,000 while paying 21% on A$30,000 is unlikely to leave her better off, so he must at least raise the debt. A client may suggest a narrow scope, but ASIC's RG 244 (Table 2) says the adviser must judge whether that scope suits her circumstances. An acknowledgement is a disclaimer, and a disclaimer does not change the legal outcome. Refusing all advice overreaches: recommending that she repay the card first is itself advice Tobias can give.

Common mistake

Clients can set the scope, but the adviser cannot ignore a fact that makes the requested advice inappropriate.

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Study note: Best interests in practice: applying the law and the Code together Financial adviser exam practice and mock exams

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Original practice material mapped to the learning outcomes in ASIC's exam guidance. Independent, not affiliated with or endorsed by ASIC. Verify figures and rules against current guidance before relying on them.

ASIC financial adviser exam, Applying the best interests duty in practice question: Australian share fund to buy with A$50,000

ASIC examApplying the best interests duty in practice

A advise only on the share fund as asked: she set the scope, and the card debt sits outside it
B advise on the share fund once she signs an acknowledgement that her debts are outside the scope
C refuse to give her any advice at all until she has repaid the whole card balance
D raise the debt with her, as a reasonable adviser would see it as relevant to the subject matter

Show the answer and explanation

Answer: D. raise the debt with her, as a reasonable adviser would see it as relevant to the subject matter

Common mistake

Clients can set the scope, but the adviser cannot ignore a fact that makes the requested advice inappropriate.

Practise more Applying the best interests duty in practice questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →