At a Sunday barbeque, you are introduced to a group of people you don’t know (by your friend who is the host) as “one of the best financial adviser’s going around”. Being ever so humble, you tell your friend that you are as fallible as the next adviser. Later in the afternoon, one of the guests, Valerie, corners you whilst you are eyeing off the desert. She tells you that she is really unhappy with her adviser, and looking around for a different adviser. She then proceeds to ‘test’ you by asking your opinion on certain listed mining companies she owns. She has indicated she is unhappy because she has lost a significant amount of money recently on these shares. Valerie also asks your view of the share market’s likely performance over the coming months.
(a) Explain the difference between general advice and personal advice.
(b) Is it likely you would be in a position to provide personal advice to Valerie at the BBQ? Explain why or why not.
(c) What type of advice does s949A of the Corporations Act pertain to – personal or general advice?
(d) What “general warning should you provide to Valerie before addressing her questions as per s949A of the Corporations Act? Write it as though you were speaking to her. For example, “Valerie, you must understand……”
(e) If Valerie comes to your office for advice, what document would you need to give Valerie under s 941B of the Corporations Act, at the first opportunity, and definitely prior to issuing personal advice?
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