Reference no: EM132330856 , Length: word count : 3500

COMPLEX LENDING ASSESSMENT

CASE STUDY Overview

In order to achieve competence, you will need to demonstrate a clear understanding of complex loan scenarios,proving you are competent at Diploma level.This case study will determine your understanding of the complexities of various loan scenarios and the outcome for your clients.

Please note: A case study scenario is provided for you within the assessment material, however you can develop your own scenario based on your own industry experience. You must have your own scenario pre-approved by an assessor. You make the choice but all documents listed on the Complex Lending checklist must be included no matter what case study scenario you select.

A fully completed loan application which will contain all documentary financial evidence to support the application such as:

• Financial Statements, Tax Returns, Trust deeds etc.

• Cash Flow Forecasts

• Offer and Acceptance or Contract of Sale for any purchase of real estate/ Invoice  or Offer to Purchase from a supplier for Plant and Equipment

• Evidence of any other debt your clients may have which allows a serviceability to be completed with all available facts.

• A Serviceability Assessment to show clients can afford the loan requested.

• Notes to the lender addressing the points as listed in line with the course notes titled lenders submission lender notes, for example:

o Applicants’ details including history and needs

o Purpose of loan

o Brief details and value of security

o Brief details of loan make-up

o Loan amount requirement

• A SWOT analysis – refer to appendices for template of this document, you should also refer the results of your analysis in your notes to the lender.

• A Financial Ratio Analysis – A minimum of one or more if appropriate to be completed and the results mitigated/supported in your notes to the lender

• Reasons for major variations in the 2 years financial statements included in this assessment.

PLEASE NOTE:The SWOT and Financial Ratio analyses along with the reasons for variances will have to be submitted to AAMC Training as attachments that would normally be provided in the Notes to the Lender.

What we are asking for here is an application that you would send to the lender. Whilst you would not normally include in your submitted lenders file the Clients Needs Review/Fact Find, Statement of Credit Advice/Client credit quote you need to maintain them on the clients file for audit purposes and we need to verify them for assessment purpose.
 
Evidence requirements

In order to be deemed competent, you will need to evidence the ability to:

• Develop detailed broking options designed to maximise the client’s outcomes and reach client objectives which incorporate elements from research and which address complex needs and issues

• Identify and describe key assumptions upon which the plan is based

• Provide a detailed analysis of research strategies and findings

• Test and make appropriate checks on a proposed plan for its integrity and compliance

• Assess the impacts of taxation, social security, economic and other government policies on client investment and financial requirements taking care not to provide financial advice unless licensed to do so

• Interpret and comply with industry regulations and codes of practice

• Identify the roles of associated financial advisers and work effectively with them

• Identify and document the situations where the client/s should be referred to an associated financial advisor for professional advice

• Assess broking options, financial markets and investment characteristics

• Use appropriate sales and marketing methodologies and provide justification and research evidence

• Gain client feedback on and/or agreement to the plan

• Prepare materials and personnel to effectively implement complex loan structures

• Establish appropriate audit trails and effectively document records, diary notes and data

• Demonstrate that effective and appropriate follow up and feedback systems are in place to track progress of the loan application and to keep client/s informed

Knowledge requirements

To be deemed competent you must be able to demonstrate a comprehensive knowledge of:

•  Acts and regulations affecting the financial industry

• Legislation impacting on financial services, including environmental, corporations and consumer legislation and State and Territory legislation, charges and taxes

• Relevant codes of practice

• NCCP Act disclosure requirements

• The role of mortgage/finance brokers

• Products available in the financial services industry

• Sources of information on financing such as lenders, government departments, accountants, solicitors and financial planners

• Methods of presenting financial data

• Credit assessment

• Risk Assessment

• Valuation practices and methodology.

Preamble

• The task is presented in the form of a case study around a complex Residential, Commercial, SMSF or Plant and Equipment  lending scenario. It is your choice as to which loan option you select as a case study, provided however your submission meets the structured process we are seeking from you.

• Whilst the traditional finance broker will look at the options via the traditional pathways of commercial and or investment property, please understand that (given Australia now ranks second in litigious actions) it would be wise to fully understand the client’s overall personal situation before making recommendations.

It may even be more beneficial for the clients to place this transaction via their Self Managed Superannuation fund as that may produce a more tax effective solution for the client. Remember if you are not authorised to give advice in this area refer the client to one of your strategic advisors who is. AAMC Training provides qualification courses in this area.

• Please ensure that you assess applicable fees and charges in line with requirements of the State/Territory in which you operate

• The majority information to complete the case study is included in the scenario’s provided or within the Learning Guide

• Some information has been deliberately excluded and you will be required to identify and document these items. This Case Study has been designed so that it can be written as a complex property investment loan, a self-managed superannuation loan, a business loan or plant and equipment loan. It is up to the individual to determine which type is best for the client.

• If you do not have access to these documents you can login to download sample templates from the AAMC Members’ area under the Useful Forms, Documents & Templatestab. There are a number of other forms available.

Attachment:- Complex Lending Assessment.rar