Developing & Presenting Broking Options for Clients with Complex Needs

This document discusses the process of developing and presenting broking options for clients with complex needs. It covers relevant risk issues, complex features of a client situation and needs, key products available in the broking industry, and relevant legislation, regulations, and codes of practice. It also provides insights on addressing client needs and objectives, demonstrating high-level communication skills, and introducing services and recommendations to clients.

CASE: DEVELOPING & PRESENTING BROKING OPTIONS FOR CLIENTS WITH COMPLEX NEEDS.
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PART I: WRITTEN ACTIVITY
1. Relevant Risk Issues.
a. Borrowing risk and gearing
'Gearing' can be stated as the Borrowing and investing, where existing investments are kept as
security.
By combining regular gearing with an investment lending facility, a regular investment
plan can be processed.
Risks of gearing
Gearing can also increase gains. The risks needed to be taken into account, such as:
 Investment value may fall, but the balance of the loan remains the same.
 Returns on investment can become overweight by cost interest, which can affect
cash flow.
b. Specific product risk: In any investment, this is a high risk. Investors make
decisions based on assumptions and technical analysis of financial products such as
mutual funds, interest rates, etc. that lead to some conclusions about how an investment
is likely to be performed. The key product for a rentable investment is identified and the
risk / loans ratio between potential losses and potential gains is evaluated an important
element of the investment analysis.
c. Institutional risk: Financial institutions are the firms and institutions that provide
customers with financial products and services that may not be able to get them on their
own more efficiently. Sometimes from the bottom line they face relentless pressure.
Challenges of uncertainty, such as regulatory changes, data breaches and other cyber
risks, apply additional global economic pressure. Insurance will face a number of key
challenges, including risks associated with bad faith litigation, compliance with
government and global regulatory requirements, data security, and rising cyber / privacy
risks.
d. Risk factors and return expectations of the client: In the analysis of
any investment there are two fundamental factors (risk and return). Of course, the
highest return of their investments will be achieved by all investors. But there is always
a balance between possible return and potential risks. Financial advisors or money
managers must produce an accurate risk assessment for individual clients. The money
manager can therefore choose the most appropriate investment for the customer.
e. Volatility of income and capital: The income or return paid by a fund is
called the income risk when the value decreases. The impact of this type of risk has the
greatest impact on money market and short - term income strategies, where long - term
investments are based on interest rates and have no potential impact of income risk. In
the case of individual bond, the risk of income becomes an increase in the risk rate of
income. The decline in the interest rate in short - term debt securities will result in a
reduction in that fund's risk yield. The risk of income and the risk of income are nearly
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similar concepts other than the initial applies to funds, while the other applies to
individual debt securities.
2. Complex Features of a Client Situation and Needs.
a. Commercial loans: Commercial loans are debt - based financing arrangements
between an enterprise and a financial institution, for example a bank. They are generally
used to finance substantive expenditures on capital or cover otherwise unable to afford
the operating costs of the business.
b. Chattel leases: A chattel mortgage is a common way of financing cars in business.
It is a commercial finance product where a financial provides the money to purchase a
car and the customer makes regular repayments.
c. Native title rights: “The Native Title Act 1993 is a law passed by the Australian
Parliament that recognizes the rights and interests of Aboriginal and Torres Strait
Islander people in land and waters according to their traditional laws and customs”.1
d. Heritage issues: In cases where property use can become an illegal affiliation to
the client and broker, heritage can be a serious issue.
e. Contaminated Sites or properties near noxious industries: In
some cases, as well as the sites used for mortgage broking, transparency checks should
be carried out to obtain an overview of the property, as in some cases the property
contains hazardous situations such as having high pipe lines below them or because they
are close to industries that may have radioactive effects or chemical releases that have
direct or indirect health effects.
3. Key Products Available In the Broking Industry.
A. Bill Re-discounting Schemes (BRDS): Bill Re - discounting schemes is a
currency market scheme when banks raise funds by issuing group and maturity
promissory notes that matches the discounted trade bills. This scheme helps to keep
market cash liquidity. There is a transaction limit of at least 15 days and a maximum of
90 days. The bank borrowing in this scheme may issue a lender promissory note and an
effect certificate - the bank holds genuine bills equal to the amount of the transaction.
B. Mutual fund: A combined stock policy mobilizing funds from stockholders to
stocks, bonds, short - run fund market instruments and/or alternative securities is
understood as a mutual fund. Operators normally manage this securities portfolio and
gain financial gain from completely different approaches such as dividends, interest and
capital gains. The income is shared by the open - end investment firm's shareholders.
Monetary firms generally have their own stream of in-house mutual funds, and therefore
1 Müller, M. A., Riedl, E. J., & Sellhorn, T. (2015). Recognition versus disclosure of fair values. The Accounting Review, 90(6), 2411-2447.
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investment limits are usually low. This method does not contain any rigidity in selecting
merchandise from different types such as Equity, Debt, and Fund Markets. Most
schemes are open concluded that supply liquidity. an individual will invest in mutual
fund - either in variety of Lump-sum or Systematic Investment set up (SIP).
C. Capital Gain Bonds: Capital gain bonds are simply another form of bonds
wherever someone is exempted from long - term capital gains once a similar amount is
invested with fettered, the exemption may be appropriate to the amount of investment
created, whichever is a smaller amount. The interest rate offered is close to 6 June 1944
every year.
D. Treasury Bills (T-bills): Treasury bill refers to a common currency market tool
issued by the RBI, through India's government. Treasury bill is issued on 14, 28, 91, 182
and 364-day maturity.US Treasury Issues Treasury bills or T-bills are instruments of
short-term debt. We’ll need to use a middleman here to handle T - bills.
4. Relevant Legislation, Regulations and Codes of Practice.
The induction training helps to integrate new employees into the business so that they can easily
understand and cope with the work system and get to know the procedures of any broking
organization's different departments.
Relevant Legislation
Health and safety management should be included in induction process.
 To develop good work habits, new workers must be ensured, which will be the same with
safe work practices.
 Workplaces for induction need to look for healthy and safe places.
 Some emergency equipment, such as personal protective equipment, must be placed in the
workplace of the induction, which may require further training.
 There should also be fire alarms and fire fighting equipment, and there should also be
locations of such equipment and demonstration.
 It is necessary to place first aid and other contacts for emergencies.
Regulations and codes of practice
a. An induction program should be initiated by bringing new employees into the company's
mission, goals, and values. Employee induction process is important because it provides the
reasons why the company exists, where it originated, and where it is headed.
b. The new employees should be introduced to other staff members and let them know what they
are doing. Supervisors in the organization can also write welcome email to everyone.
c. The trainer should use some visuals, sales figures from past years, and should avoid theory -
based training. As human beings like more than text remembering the data. Examples of real -
life market competition information are important to enable them to connect easily.
d. The trainers should involve senior management so that the trainees can get to know the people
who are in the company's scenes.
e. By questioning and answering the process, participatory learning methods can be most effective.
f. Product Training
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The basis should be strong in order to achieve the success; the training should focus mainly on
the core product areas of the financial market, including the following products.
1. Derivative- Future & Choices
2. Mutual Fund, NCDs
3. ETFs. Derivative of commodities
4. Derivative currency
5. Fairness
g. Market training - Trainer should provide some basic knowledge of the capital market and the
derivative market also included in the induction program should be market currency and
commodity market information.
A Structure of the induction training
 Meet all the staff and greet them.
 Introduce them and explain their role with the entire existing team.
 They need a brief overview of the organization.
 Work policies, organizational culture should be described to all employees
 Explain the role and position of new employees and what their organs are, waiting for them.
 Only on the first day, the performance standard must be very clear.
 All new employees must have a complete review and feedback.
PART III: RESEARCH TASK AND WRITTEN/ORAL
QUESTIONS
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1. Why is it essential for you to address a client needs and objectives
in a manner that is consistent with their level of financial
understanding?
financial services providers usually requires to give a Statement to clients who came for
financial advices for their requirements, which is designed to ensure that clients are provided
enough information for them to understand the advice and decide whether or not to rely on
it .The statements and information should be provided and presented in a 'clear, brief and
effective' manner. For any disputes, the quality and clarity should be provided in case of a
critical issue
2. How can you ensure that you address the needs and objectives of
clients in a manner which directly applies to objectives and
requirements they have disclosed?
To ensure that I am addressing properly the client’s need and objective I am going to apply
SMART goal technique that is
 S – Specific – What we will accomplish? What actions will we take? What is actually
the clients’ need
 M - Measurable -Gathering data about as many of our customers is very much needed.
 A – Achievable - finding out need can be fulfilled by us
 R – Relevant - Knowing relevant details such as their lifestyle, occupation and
financial status.
 T - Time-Bound – how urgency they have for the issue which we need to serve
3. Briefly discuss how you can demonstrate high level verbal and non-
verbal communication skills throughout your interactions with
clients, including for clients with special needs.
 In several client meeting the primary few minutes are very necessary. 1st impressions have a big
impact on the success of any and future communication. In the time of verbal communication
using proper use of word is very much needed with full of information’s. I also need to listen
more carefully to understand what they are saying to me.
 In the time of non - verbal communication I need to be carefull about facial expressions,
the tone of the voice, the gestures I will display through my body language .
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4. What methods could you use to assist you in introducing services,
strategies and recommendations to clients?
 Firstly we need to keep the record of our clients and their details
 Have a thorough knowledge about our financial services and products
 Brief explanation of our company policy, core competencies and our way of working,so
that the clients will have the clear idea about our services.
 On the 1st meeting only we need to find clients’ issues and provide some bit of solutions.
5. Why is it important to use language that is clear and unambiguous,
and to avoid the use of jargon when communicating with clients, in
both oral and written communication?
Using clear and unambiguous languages during working with clients is very much needed. It is a
serious ability that a corporation should utilize in facilitating the client’s growth or modification
method is to earn their trust, confidence, and respect. This is often the most vital a part of the
shopper engagement strategy, that should be established within the early part of the connection.
For those in broking business, this poses an excellent challenge. Sadly, several professionals in
our field have difficulties within the space of shopper rapport building.
6. What information should be included in the disclosure of capacity to ensure that it is
consistent with industry requirements and organizational guidelines?
“There are different ways to measure market risks; each has its own benefits and restrictions.
There are different models like net income simulation, re-pricing gap report, economic valuation
model”.2
The information’s that need to be disclosed, to ensure that it is consistent with the industry
requirements and organisational guidelines are:
 Level of risk-taking that the client will be ready to accept.
 The class of Assets he wants to invest.
 The market expectations.
 The return on investment expected and the discussion should include a detailed
explanation about the risk and return phenomenon.
2 Palea, V. (2014). Fair value accounting and its usefulness to financial statement users. Journal of Financial Reporting and
Accounting, 12(2), 102-116.
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7. Briefly explain the important things to consider and discuss with
clients, clearly and comprehensively, as you guide them through the
broking options.
Any financial skilled got to know how to research the financial statements of a firm effectively.
This could be done exploitation following 3 key areas:
a. The business economic characteristics should be known initially.
b. uniqueness of services , level of profit margins needed to be discovered .
c. Company procedures ought to be known
d. the standard of the firm’s money statements ought to be Assessed
e. prediction money statements is extremely a lot of required to analyses.
8. What can you provide to a client to clearly explain the fees, charges
and commissions?
A client will must have a clear idea about the fees and all charges, so this can help to avoid
future confusions between clients and company agents.
 An overall cost structure can be provided to the client.
 The fees that other companies are charging might be shown to the clients.
 In spite of bearing our charges how the client will get satisfied with our services need to
be explained.
 The components of the whole financial system should be included.
9. Why is it important to disclose the commercial relationship of the
representative and their organization to any of the products and
services mentioned in plan?
For maintaining the relationship for the long term and get to know them more. And to make
them familiar relationship making is important. And by showing the relationship between our
commercial representative and products and services we can easily earn their trust. After
knowing co’s representatives are also having direct connection with the services the client will
gain confidence for us.
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10. What types of issues will you need to use your professional
judgment to identify and address?
In my professional judgment to identify and address the issues of our clients we can continue
following
a. First we need to create a trust environment between our company and our clients.
b. The professional judgment can also be applied in the context of defining the term “value” or
for determining the value of an accounting item.
c. Lease accounting can also be an issue to judge.
11. How might you seek confirmation from the client that they
understand broking options presented?
For proper communication with our client we need to establish a clear one to one contact.
for that we need to maintain following
a. Need to ask clients what is their issues.
b. After knowing the issues we need to explain how our services can mitigate their issues.
c. Having long conversation we will have higher probability of success.
d. This will help us to reach the successful business.
12. Outline the steps that you should follow to respond to identified
client concerns appropriately.
Interviews: Interviews ought to be conducted face to face or over the phone. This method helps
to assemble knowledge from directly from the person. One-on-one speech with them of at-risk
youth who will assist you perceive the issue
• Interviews may be done formally (structured), semi-structured, or informally
• Questions ought to be centred, clear, and encourage open-ended responses
• Interviews are principally qualitative in nature
Questionnaires and Surveys: Responses may be analysed with quantitative ways by
assignment numerical values to Likert-type scales. And this result may be documented.
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• In this case Results are usually easier (than qualitative techniques) to analyse.
Documents and Records: Consists of examining existing knowledge within the style of
databases, meeting minutes, reports, group action logs, money records, newsletters, etc.
This can be reasonable thanks to gather info however could also be an incomplete knowledge
supply
13. What will you need to do when clients request alternatives to your
recommendations?
If a client requests for alternatives we firstly need to keep in mind about following things
a. the clarity of their queries
b. respond to customers’ feedback and feature requests carefully with good gesture
c. we need to have the mindset of not hiding the truth regarding any services actually we need
to maintain transparency
d. if we will don’t have exact alternative that the client is asking for we need to clear and try to
explain if their issues can be resolved
14. What are the limits you will need to observe when you are
presenting clients with broking options?
During a client presentation we need to maintain some limits which includes we should never
overpromise regarding our services. We need to make them very clear about our policies and
procedures. we cannot be open about our new strategies to the clients. The financial products
must be clarified. Our presentation cannot be made without wrong data.
15. Outline a basic complaint handling procedure that you could follow,
maintaining communication channels, when dealing with a customer
complaint.
If a client is unhappy, he or she's going to voice their grievance. During this article, we have a
tendency to share however you'll be able to track, monitor and reason client complaints. There
are some easy and effective ways to handle customer complaint
a. Listening understanding their issues
b. If mistakes have been made from our side need to apologize properly
c. After understanding the problem solutions should be found out very first
16. How will you need to obtain agreement to proceed from clients?
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After explanation all our financial products and services when we and the client will be on the same
platform. When our client will have all the doubts cleared we can move to the agreement step,
where we need to have all the proper documentations consisting of the components of the whole
financial system.
Some key points like Payment System, Pooling of funds, Maturity Transformation, Risk
Management, Provision of Liquidity, Price Information etc. Need to be included also.
17. What relevant documentation will you need to use to record your
client interactions and to provide conformation to clients?
For the proper documentation we must maintain following things
 A complete explanation of financial system needed to be documented
 Details about the Financial Products we wish to offer to our client
 The components of the whole financial system
 How does the money flow in our financial system?
 Accounting measures, revenue and expense schedules should be included
 Some key points like Payment System, Pooling of funds, Maturity Transformation,
Risk Management, Provision of Liquidity, Price Information etc.
18. Why do you need to ensure that instructing or purchasing
documents, where required, are signed by clients?
Clients’ signature on the agreement means the acceptation of our details. Which need to be
cleared first like
a. Transparency will be maintained within the both parties.
b. There will be financial clarity like the dues will be cleared in a proper date.
c. The full scope of work should be there so there will be less chance of question regarding
this matter.
19. What are the types of post-broking services you will need to clearly
define and communicate to your clients?
Once the agreement got signed there are some post broking services we need to follow up like
we need to know if they are still having any issues in cash segment of equity derivative
management. If they are having any unauthorized transactions. We need to maintain their mutual
fund timely manner.
20. Briefly discuss the organizational guidelines top follow when dealing
with clients who have the following special needs:
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 Visual or hearing impairment- first of all we need to treat them normally directly and
clearly. we need to be calm, patient and we need to know and understand first what
actually they want those who are having visual problem our tone of speaking and clear
explanation is needed.
And those who are having hearing problem we need expert in sign language and full
visual presentation of our services.
 English as a second language – some people are having language problem. if one is not
much comfortable in English, we need to explain our services in their local language.
 Cultural differences- Cultural differences affect the lifestyle which is directly connected
to their financial status and issues, to mitigate their issues we need to understand their
financial status and their way of living.
Reference:
Palea, V. (2014). Fair value accounting and its usefulness to financial statement users. Journal of
Financial Reporting and Accounting, 12(2), 102-116.
Müller, M. A., Riedl, E. J., & Sellhorn, T. (2015). Recognition versus disclosure of fair values.
The Accounting Review, 90(6), 2411-2447.
Student Name:
Unit Code:
Date: