Reference no: EM132337568
Introduction
Objective
The objective of this assessment is to determine client requirements and expectations for the practical client situation described in the case study assigned to you.
Scope To achieve this objective, you will need to:
- Inform client of the financial planning process and services,
- Obtain relevant information on client's existing financial situation,
- Determine client expectations and requirements with respect to the financial planning service offered by the representative, and
- Prepare and update necessary documentation when required.
The assessment tasks in this assessment will allow you to demonstrate your knowledge and skills in these elements
Assessment Task 1
1.0 Financial planning process and services
Establishing client rapport at the start of a professional relationship is a preliminary step in the Financial Service Advice Process.
The first assessment task requires you to inform the client of the financial planning process and services, as detailed in the case study allocated to you.
This requires that the:
- Financial planning process and role, and any limits of authority of the representative are explained to the client,
- The licensees and principals of the organisation and services and capacity of the organisation, including any relationship to other financial services are explained to the client,
- Fees and charges are explained to the client and the client's understanding of these is confirmed before proceeding with delivery of service,
- Clients with special needs are identified and appropriate action taken or referral made, and
- Procedures for internal and external complaints handling and resolution are explained to the client.
For this activity, you should refer to the FSG that accompanies this assessment task.
In this activity, you are required to prepare for an initial meeting (which is also the ‘fact finding' interview) with your clients in the case study by answering the short answer questions in the spaces provided in the following pages.
Assessment Task 1,
Questions
(a) Give some thought to the sort of things you would cover in the first meeting(assume this meeting will also incorporate the ‘fact finding' interview). Include any legal requirements and other documentation that may be helpful in the interview.
(b) How might you ask the client to prepare for the first meeting?
(c) To establish a relationship with your clients, what strategies might you use to build rapport during the interview process?
(d) In point form, explain the steps in the financial planning process.
(e) What details would you provide regarding your licensee and principal?
(f) Explain the products and services you can offer the client and the capacity of the organisation.
(g) What would you tell the client about yourself?
(h) List the type of fees you could charge the clients. What are the benefits of explaining these fees to your clients?
(i) How would you assess the client's understanding of the fees and charges before proceeding with delivery of service?
Assessment Task 2
2.0 Client's existing financial situation
The second assessment task requires you to obtain relevant information on the client's existing financial situation by completing the Fact Finder, based on the information contained in the Case Study allocated to you, including:
- Facts and information relevant to the client's particular service request are obtained and confirmed,
- Client's expectations, requirements and objectives are identified, with the clients encouraged to disclose relevant information to determine their personal/financial situation and any special needs,
- Relevant information on investments and assets held by the client and their current income, expenditure and liabilities situation are obtained,
- A summary analysis of client's financial position is developed based on extent of client disclosure and requirements, and
- Risk and fraud indicators are identified accurately and all information is checked for consistency and potential conflict.
The case study provided is brief in nature so there will be some fields in the Fact Finder (e.g. telephone number) where the case study does not provided required information. You may leave these fields blank. However, in a real client situation you must not leave any fields blank and provide a warning (e.g. client declined to provide this information).
Assessment Task 2.1
2.1 Personal Details
(a) Contact details
(b)Child / dependant details
(c)Financial arrangements involving siblings, parents or others
(d)Relationship history involving financial implications
(e)Health details
Assessment Task 2.2
2.2Work Details
(a) Other personal financial arrangements
(b)Investment Experience
(c)Actingas guarantor
(d)Employment details
(e)Previous financial history
(f)Estate planning issues
(g)Retirement planning
Assessment Task 2.3
2.3 Special Needs
(a)Do these clients have special needs that require consultation with other advisers?
(b) Other adviser details
Assessment Task 2.4
2.4. Client expectations, priorities and objectives
(a) Client expectations and requirements
(b) Client priorities
(c) Client objectives
i. Short Term (1 to 3 years)
Increase funds
ii. Medium Term (4 to 7 years)
To build funds for her retirement
To work part time to earn which can be used as a holiday expense
iii. Long Term (7 year plus)
Accumulate funds to help grandchildren to attend universities
Assessment Task 2.5
2.5 Personal balance sheet
(a) Lifestyle Assets
(b) Investment Assets
(c) Liabilities
(d) Total Gearing (Lending to Valuation Ratio)
(e) Contingent Assets (eg. Interest in a deceased estate, future lump sum etc).
(f) Contingent Liabilities (eg. Leases etc.)
Assessment Task 2.6
2.6Personalincome and expenses
(a)Income details(Go to www.taxcalc.com.au for assistance and use the current financial year)
(b)Expense details
(c)Surplusdisposable income
(d)Plannedmajor expenses
Assessment Task 2.7
2.7Superannuation and Insurance arrangements
(a) Superannuation
(b)Insurance within superannuation
(c) Leave payments
(d)General insurance
(e) Personal insurance
Assessment Task 2.8
2.8Summarise Analysis
For each of the Generic Needs listed in the table below, provide a summary of the client's financial position or requirements.
2.9Risk, fraud and conflict of interest assessment
Assessment Task 3
3.0 Client expectations and requirements
Determine the client expectations and requirements with respect to the financial planning service offered by the representative, including:
• Client is encouraged to express and clarify their expectations from the financial planning process with any concerns identified and responded to promptly and appropriately,
• Client's income and investment needs, preferences and priorities are established, and
• Risk issues and tolerance are explored comprehensively and ethically with the client,
• A determination is made that the service being sought is within the capability and authority of the authorised representative,
• A referral to another internal representative is made if service required by client is beyond scope of the representative,
• Specialist advice is sought where necessary or client is referred to appropriate personnel or organisation where required services are not available or cannot be provided by the practice, and
• Client's risk profile is identified.
Complete your answers in the space provided on the following pages.
Assessment Task 3.1
3.1 Identify concerns
Description
(a) How would you encourage your clients to express and clarify their expectations from the financial planning process?
3.2. Establish investment needs, preferences and priorities
For each of the Generic Needs listed in the table below, provide a summary of the client's requirements, preferences, advice team and priorities (i.e. where a ranking of 1 is the highest priority). In determining the make-up of the team, identify if the services being sought:
1. is within the capability and authority of the adviser,
2. should be referred to another internal specialist, or
3. specialist advice is required
Assessment Task 4
4.0 Prepare & update documentation
In this final activity, you are required to prepare and update necessary documentation where required, including:
• All relevant client facts, information and financial/personal histories are documented, checked and confirmed with the client and managed confidentially in accordance with company policy and guidelines and relevant legislation and industry codes of practice,
• Client records are created or updated when necessary,
• Client documentation, information and histories are filed in a format and location that is readily accessible.
Complete the following authorities and declarations, then complete a Client Checklist in the spaces provided on the following pages.
Assessment Task 4.1
4.1Client Statement and Authorisation
Assessment Task 4.2
4.2 Adviser Declaration
Assessment Task 4.3
4.3 Authority to Provide Information
Assessment Task 4.4
4.4 Client file checklist