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In: Finance

A financial service company is aware that customers are being charged fees for receiving financial advice...

A financial service company is aware that customers are being charged fees for receiving financial advice that will not be given. This is in breach of the company’s own code of conduct and consumer law. Senior management delay remediation in an effort to meet their own sales targets. Complaints by customers and whistleblowers are ignored at all levels in the company.

In your own words, critique the following statement by the CEO:

“ ... this is our normal business practice, everyone else in the industry is doing the same, and our company has a policy of being socially responsible at all times. Our risk culture is exemplary and supports our growth strategy.”

Answer ALL of the following questions in your own words:

  1. Explain whether this company, in your opinion, has a sound risk culture.
  2. Describe what consequences could arise for this company from its compliance failure.
  3. Discuss what actions management could take in order to improve compliance risk.

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Expert Solution

jeff jeffy answered 1 year ago
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