ASIC financial adviser exam, Code of Ethics: client care and quality process (Standards 4–9) question: A$100,000 inheritance in a growth fund without looking

ASIC examCode of Ethics: client care and quality process (Standards 4–9)

Rosemary, 68, receives a part Age Pension. Her adviser, Declan, recommends that she invest a A$100,000 inheritance in a growth fund without looking at how the investment will affect her pension. Which standard is MOST engaged?

A Standard 8, which requires her file to record the inheritance and its source accurately
B Standard 7, which requires fees and benefits to be value for money
C Standard 6, which requires considering the broad effects of acting on the advice
D Standard 4, which requires her free, prior and informed consent to act

Show the answer and explanation

Answer: C. Standard 6, which requires considering the broad effects of acting on the advice

Standard 6 of the Financial Planners and Advisers Code of Ethics 2019 requires Declan to take into account the broad effects arising from Rosemary acting on the advice, such as the effect of A$100,000 of new financial assets on her Age Pension under Services Australia's assets and income tests. Ignoring a predictable fall in her pension fails that standard and may make the advice inappropriate (s961G of the Corporations Act 2001 (compilation 19 Sep 2026)). An accurate file note matters, but nothing in the scenario says the inheritance was recorded wrongly. Nothing is said about fees, so Standard 7 does not fit. Nothing suggests she did not consent to Declan acting for her.

Common mistake

Broad effects include social security, tax and family consequences.

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