Reference no: EM131445726
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Task 1 - Short Answer questions
1. THE ROLE OF ASIC AND ASX AS REGULATORS
a. What role does ASIC play?
b. List five Acts which ASIC administers.
c. Explain the Memorandum of Understanding between ASIC and the ASX.
2. DISPUTE RESOLUTION
Explain the difference between IDR and EDR dispute resolution processes for consumer credit.
3. TYPES OF INFORMATION
RG 175 identifies the two relevant information requirements that financial advisers should seek before providing advice to clients in relation to an investment component. What are they? (RG175.287)
a. What are the 13 Australian Privacy Principles?
b. To comply with the Privacy Act, Finance/Mortgage Brokers must:
c. Explain the restrictions that exist on organisations for using Tax File Numbers as identifiers.
d. Explain disclosure of sensitive information in relation to direct marketing.
5. WHAT SKILLS WILL YOU NEED?
Identify three goals that you would need to achieve in your first 12 months as a Mortgage Broker. Utilise the skills audit template below to conduct a skills gap analysis. Explain how you can go about developing the skills needed to achieve your goals.
6. STATUTORY RECORDS
From what you have learned about the NCCP, provide examples of the statutory records that a licensed credit provider must maintain. For example: A Training Register. (Refer to your Learning Guide - Module 1 Section 8)
Task 2 - Research questions
1. FINANCIAL SERVICES PROVIDERS
You will need access to the internet for this activity. Go online to review the websites of the following financial services providers and answer the questions below:
- National Australia Bank
- Homeloans Limited
- Peoples Choice Credit Union
- Pepper Home Loans
What are the characteristics of the institution? (Most of this information would be available in the "About us" section of their website.)
You may use the table below to record your data; part of the table has been completed to assist you with this exercise.
After you have completed the table, answer the following in terms of the characteristics of the financial institutions:
a. What is the main difference between National Australia Bank and Homeloans Ltd?
b. What type of lender is Pepper Home Loans known as and why?
c. How does a Credit Union like Peoples Choice differ from other lenders?
2. PROFESSIONAL ASSOCIATIONS
Please review the information provided on the websites of the following associations and answer the questions below:
FPA(Financial Planning Association of Australia)
MFAA(Mortgage and Finance Association of Australia)
a. What is their purpose/s or role/s of the respective associations in the Finance industry?
b. How do they cater for consumers?
3. FORMS OF ADVICE
To answer the following questions in your own words, download and read RG36 and RG175 from the ASIC website:
a. What constitutes a financial service?(RG36.2)
b. What is the difference between personal advice and general advice?(RG175.31)
c. Identify six occasions where advice may be considered to be "personal advice"(RG175.50)
4. KNOWLEDGE REQUIREMENT
RG146.133 states that ASIC has a list of knowledge requirements that apply to a range of products activities relevant to the financial services sectors.
Please provide a list of those requirements (RG 146.134)
Download RG146 from the ASIC website, research and list the minimum training standards required for financial product advisers.
5. TRIPLE BOTTOM LINE REPORTING
The Department of Sustainability, Environment, Water, Population and Communities commissioned a report called "Triple Bottom Line Measurement and Reporting in Australia: Making it Tangible".Use a search engine to access a copy of this report.
After reading the report please express in your own words the five broad categories that capture the current diverse state of play in performance measurement and reporting in Australia?
6. SUSTAINABLE BANKING
Sustainability is not confined to our larger financial institutions like CBA, NAB and IAG. It is also being embraced by smaller institutions such as Maleny Credit Union (MCU) Sustainable Banking. MCU began operations in 1984 as a community based credit union located in Maleny, Queensland.
The MCU Board of Directors is committed to long-term sustainability and believes the credit union has social and environmental obligations in addition to providing sound financial management. MCU practices "triple bottom line" reporting as a way of measuring progress and ensuring accountability against its sustainability targets.
Review the MCU website and detail how MCU practices socially responsible investment.
7. CODES OF PRACTICE
a. What are industry and professional codes of conduct? Explain their purpose.
b. What are the major codes of practise that impact on the financial services industry?
8. GENERAL CONDUCT OBLIGATIONS
List the General Conduct Obligations under RG205.
9. SOURCING INFORMATION
This activity allows you to demonstrate your competency at researching specific information. Answer the following questions:
a. Since the introduction of the Goods and Services Tax (GST) what mandatory requirements are in place for businesses within Australia? Your answer will need to cover requirements other than just reporting. Accessing the ‘Business' tab on the ATO website will assist you.
i. The need for registration requirements
ii. The categories (Cash/Accruals)
iii. Reporting time frames and the name of the report
iv. Collection and remittance of GST?
b. List three (3) websites that could be useful in providing an indication of legislative and regulatory practice within the financial services industry.
c. Researchand detail the difference between:
- Anti-Money Laundering, and
- Counter Terrorism Financing.
Task 3 - Case Study questions
1. RESPONSIBLE LENDING SCENARIO
Scenario 1: Mustapha has just been told that come 1st July he would be stepping up as the new Assistant Manager. On telling his partner Jenny the good news, she suggested they start looking to buy a house as they'd probably be able to afford one. Excited, they call a local finance broker who was previously referred to them by a friend.
The finance broker congratulated Mustapha on his imminent promotion and asked if they would answer some questions to help determine how much they could borrow. Mustapha and Jenny agreed to provide the required financial information. Mustapha and Jenny are good savers and have sufficient funds to possibly cover for a 10 per cent deposit.
Jenny is cautious and felt a fixed rate loan would be better so they could budget effectively. Mustapha felt no reason to disagree so the broker worked out a loan amount based on the introductory rate which was fixed for the first six months. Mustapha's increased salary meant they could borrow a lot more than before. Jenny's income varied as she works casual at the local store. The broker asked Jenny how many hours she worked on average to determine their combined income.
The broker signed and dated the preliminary assessment with today's date. She then gave Mustapha & Jenny a copy.
a. Explain the importance of making initial enquiries about a customer and verifying this information.
b. What did the broker not do in relation to the interview process?
i. Compliance requirements
ii. What alternative options were offered?
iii. Explain if the clients had sufficient resources for fees?
iv. What is the expiry date on the Preliminary Assessment? (Refer NCCP Act 2009 Section 115)
Scenario 2: Mal and Corinne are seeking your advice in relation to refinancing their loan after speaking with some friends who have a more flexible loan product and a better rate with their lender.
c. Highlight the factors Mal and Corinne should consider before making the decision to switch or refinance their loan.
2. CONSUMER PROTECTION
Scenario:Stephen was a floor and wall tiler who earned $1,200 a week. He spent $600 a week on expenses. He went to a lender to get a home loan of $200,000. Stephen needed a loan with an average interest rate that he could pay off over the medium term.
Instead, he was offered a loan for $500,000 with a high fixed interest rate and therefore repayments that he could not readily afford. As he was experiencing hardship, Stephen sought an injunction against the lender collecting his mortgage repayments. Stephenthen sought compensation for the loss and damage he had suffered for being put into an unsuitable loan.
a. Describe what you think will happen under the consumer protection provisions of the responsible lending obligations.
b. What Penalties can be incurred? (see Module 1, Section 2)
3. DISCLOSURE AND PRESCRIBED DOCUMENTS
(Please note this relates to Finance/Mortgage Broking Not Financial Planning)
a. What document should a credit representative or Australian Credit Licence holder provide to a client to explain about the services they offer? List some of the information contained in this document.
b. In your OWN words, explain why is it important for a business to have a sufficient complaint's handling system? In your answer explain the essential steps in handling and resolving a customer complaint. The Commonwealth Ombudsman has a good Better Practice Guide to Complaint Handling publication on their website.
Scenario: John Consumer is applying for a loan of $350,000 to buy a home. The Credit Representative's fee quoted to John to recommend and apply for a loan on his behalf is $225.00 (in most cases non-refundable). The valuation fee is estimated at $350.00, $800.00 for legal fees and a loan application fee of $400.00. The Credit Representative's Licensee receives from the lender an up-front commission of 0.40% + GST of the loan amount and a monthly trail commission of .15% + GST on the outstanding loan balance. An agreement will be in place between the Licence holder (Principal) and the Credit Representative (Contractor/Employee) to proportionately share the commissions.
c. Complete the blanks in the following fees and commissions table detailing the amounts that would need to be provided to John in the credit proposal disclosure. You may also need to remove those options that are not applicable to this scenario.
4. TEAM WORK AND ORGANISATIONAL PLANNING
You have recently been employed as a Mortgage Broker in a medium-sized Mortgage Broking practice. You are in charge of a small team of inexperienced mortgage brokers and Administration support staff. You discover that morale in the firm is low because:
- People are unable to distinguish between tasks that require them to work autonomously from those that require them to work as part of a team.
- There is a lack of communication about team activities.
- Due to the relative inexperience of the team, the image of the firm internally and externally is not very good.
- People do not seem to know how to prioritise their work or to manage their time and resources effectively.
- Although the firm has good technology it is not being used effectively for collaborative purposes.
Given the above, answer the following:
a. What would you do to promote teamwork and actively encourage team members to participate in and take responsibility for team activities and communication processes?
b. Give examples of some steps you could take to ensure that time and resources are better managed.
c. What are the things you would do to ensure that your own contribution serves as a role model for others and improves the organisation's image?
d. How would you use technology to help facilitate better collaboration among staff?
e. How would you plan tasks so that members can distinguish those that require them to work independently from those that require team effort?