Finance Broking in Practice (FBP) Student Assessment Booklet

The Finance Broking in Practice (FBP) Student Assessment Booklet provides instructions for students to complete short answer questions, reference their answers, and submit their assessments using an electronic booklet. The booklet includes guidelines for answering questions, referencing answers, and naming documents. It also includes short answer questions related to finance broking, such as calculating a client's financial position and prospecting potential buyers. The booklet emphasizes the importance of compliance with regulations and maintaining high standards.

Finance Broking
in
Practice
(FBP)
Student
Assessment Booklet
Name:
Date:
Manual Version Number:

Please note: It is a requirement for students to make their submissions
using this electronic assessment booklet. At the facilitator’s discretion
any submissions made in another format may not be accepted. If you
are completing the course via various computers, please save the one
booklet on a USB so you can send the submission in using the one file
Getting Started
Please insert your NAME,DATEand the Manual Version Number on the first
page of your Assessment Booklet.
Answering Assessment Questions
Each Assessment Booklet contains blank spaces for following assessment items:
 Short Answer Questions
When submitting Assessment Booklets for marking, please ensure that the entire
booklet is completed.
Short Answer Questions
Using the space/s provided, please complete your answers making sure to:
 Please restrict your answers to no more than 300 words per question
 Please include any calculations that you used to reach your answer
Referencing Your Answers
Students undertaking the course must exhibit a range of skills in order to be
confirmed as competent in their course. These skills include:
 Understanding a question.
 Possessing knowledge about the issue, which in some assessments
includes locating information from references.
 Providing an answer, this shows personal understanding.
Please make sure that all assessments are documented in a way that
exhibits your personal study and/or research. To that end would you
please acknowledge all material and sources used in the presentation of your
assessment whether they are books, articles, reports, Internet searches, or any
other document or personal communication. For example if:
 An idea is sourced; reference it e.g. (Bagra 2010).
 You are directly quoting, wrap it in quote marks e.g. “Tom Horner sat in a
corner” (Peters 2007 page 7).
 You are quoting from the internet include quote marks and the web
reference e.g. “ban on conflicted remuneration structures including
commissions” <http://futureofadvice.treasury.gov.au/content/Content.asp
x?doc=reforms.htm> accessed on the 28th of December 2012.
Please note that no more than 5% of direct quoting which is referenced is
deemed to be acceptable and no amount of direct quoting without referencing
is deemed acceptable. Any direct quoting should form only a small portion of any

FBP: Chapter 4
answer and the answer should demonstrate the student understands and can
interpret the question and provide an appropriate answer.
Whilst this will require more work for you I hope you will understand that we are
trying to maintain high standards and support your progression into further
qualifications.
Document Naming Instructions:
Save this file to your computer and please use the following protocol when
naming the file:
SUBMISSION this relates to the number of times the file has been submitted. For
example, your first submission would be S1, with any re-submission the file
name should be recorded S2.
Note:If you are submitting handwritten assessments all questions must be
completed in blue or black pen. If assessments are received in pencil or with
illegible handwriting, a resubmission will be required.
Note: It is your responsibility as a student to keep a copy of all assessment
submissions. IIT do not take responsibility for the loss of any submissions.
Distance Education Students
Student Declaration
I understand that by completing this form I am bound by the following
declaration.
To the best of my knowledge and belief, no part of this assignment for the above
unit has been copied from any other student’s work or from any other source
except where due acknowledgment is made in the text, or has been written for
me by another person.
Name: SARA T MANU Date:16 March 2021

FBP: Chapter 4
Short Answer Question 1
You had recommended a variable interest rate product with an offset
account to your client and they emailed you and said they did not want to
take up the product as it was too expensive. A cheaper product exists but
you believe it doesn’t meet their needs as it does not have the features
they need. Write an email in response (referred to a sales response)
designed to overcome their reluctance. Ensure you sign off with your
name and provide your mobile phone so they can contact you.
Email address: [e-mail]
Dear Customer,
Thank you for your emailed that I have received
in regards of the product that we have
recommended. You did not want the variable
interest rate together with the offset account as
you mentioned it is expensive for you. I
understand you wanted a cheaper option
unfortunately the requirements for the products
will not suit your need of having an offset
account. The cheapest option doesn’t have the
feature that you need but the recommended
product has more benefit than the cheaper
product in the long run. For instance, if you
deposit both of your wages in the offset account
it will help decrease the interest rate and you
will not have to pay for the full term of the loan
but pay off your loan quicker which is something
that the cheaper product can not achieved. Also
the recommended product will cost you $500
more upfront but in the long run you be able to
save a lot of money by helping decrease the
interest on your home loan comparing to the

FBP: Chapter 4
cheaper product which this option is not
available.
Please do not hesitate to contact me on
041-1139486 for more details. I would love to
help you in regards of your request.
Best regards
Email:

FBP: Chapter 4
Short Answer Question 2
(a) Which software applications would you use to calculate a client’s
financial position?
Servicing Calculator
(b) All brokers are required to pass the So Sweet credit guide to their
clients. Devise an item on an audit program to prove she does it.
A signed checklist provided by the broker to the
client.
(c) So Sweet requires all new brokers to email a summary of their efforts
each week to their mentor. Devise an internal monitoring program to
ensure they do it.
Continuous professional development
requirements
(d) Keeping up with new regulations is vital. Devise a mechanism to
ensure the currency of regulatory literature is distributed in a timely
fashion in accordance with organisational policy.
The compliance with new regulations is very
important and it is necessary for companies to
follow all the regulations. This is because of the
reason that the laws guide the company that
how they have to work and what steps they
need to follow. Hence, the compliance with
regulation will also assist company in facing the
competition in better and effective manner.
Also in case the currency of regulatory literature
is distributed on timely manner and in

FBP: Chapter 4
accordance to the organisational policy then
this will improve the working efficiency of the
company. This is necessary because all the new
regulations have been implemented within the
organisational policy and as a result of this the
performance of the company will be enhanced.
(e) How would you ensure operational procedure is updated to reflect
changes to regulation and legislation, including the identification of
implications for product and services?
Internal monitoring, auditing programs for staff
and authority holders can help to keep
organisational framework in line with wider
policy requirements. Such programs may
include:
 Audits of disclosure documentations
 Audits of financial services reform (FSR)
documents
 Loan documents audits
 Monthly journal audits
 Qualification check

FBP: Chapter 4
(f) Research and calculate the cost of implementing triple bottom
line principles in an office with no eco policies.
Implementing triple bottom line principle in the
office takes degree of skill and planning to
implement, It will cost company time and
money to implement but at the end it is
important to monitor sustainability of the
business through triple bottom line. You need to
source documents from valid and most current
reports including legislation, regulations and
code of practice that apply to the industry and
its organisations. Examples include: Trade of
practices Act, section 52-Green marketing,
Department of climate change – national
greenhouse reporting act. Etc
So, to apply Triple Bottom Line, you have to look
at the 3 P’s (People, Planet and Profit). How will
one impact another if the principle is not
properly executed.
The implementation of triple bottom line is very
important for the company because it focuses
on proper and balanced growth of the business.
The reason behind this fact is that when the
company emphasises on people, planet and
profit then it provides better returns. Even
though the cost levied is high but the expected
returns are also high. For example, when
company implement strategies relating to
Corporate Social Responsibility then they have
to incur high cost but in against it also provides
a good return to the company. On the other

FBP: Chapter 4
hand, in case company plans to increase the
profit then also it will incur cost but the result
will be increase in profit.
The cost of includes
People- $30
Planet- $ 35
Profit- $ 45
Total cost- $110
Hence for the recycling and waste management
company can undertake use of plastic recycling.
Within this the company can reuse the plastic
bags and other related plastic product so that it
will not harm the environment. Approximate call
to relating to this strategy will involve
proximately $109
(g) Via email ask if any staff would like to undertake the triple bottom
line implementation process as a business opportunity.
To: [e-mail]
Dear staff
A new opportunity to undertake the Triple
Bottom Line Implementation Process has risen
and this is available for anyone who want to
take up this role as a busines opportunity.
It is very important to understand the benefit of
this system. Pursuing the triple bottom line

FBP: Chapter 4
initiative increases the transparency and
accountability of an organisation’s operations
this is the key benefit to organisation as it can
attract new consumers and improve
productivity levels.
So as a company with a large turnover in terms
of profit we need to ensure that other part of
the industry is not affected by this result.
Talking about consideration that the 3 P’s must
al benefit out of the process so it’s important to
take it into account all aspects to be rewarded
and that is why we need someone to manage
this part of our service.
Please contact me if you are interesting on the
role.
Best Regards
Sara Manu

FBP: Chapter 4
Short Answer Question 3
Under the laws of agency, when can a finance broker act as a limited
agent of a credit provider?
If the finance broker work directly with the
credit provider

FBP: Chapter 4
Short Answer Question 4
(a) Prospectingis a continuous process of gathering the names of
potential buyers who are likely to be interested in purchasing the
broker's product. Select one business or professional contact
e.g. brokers, business associates and associations and one person
from your personal network e.g. friends and family and detail how
you will contact them by using a technique from the list below or
other technique:
 advertisements
 databases
 direct mail
 internal company referral systems
 networking groups and events
 referrals
 telemarketing.
Referrals
Professional Contact :Broker
Personal Contact: family friend
How to contact them: Keeping in touch with
them by calling them and have conversation
with them, encourage them to recommend a
brand to families and friends and their
colleagues. Talk to them using the sharing tools
and referral rewards.
(b) You have contacted a person and have spoken to them using one of
the techniques above. How would you develop and cultivate the
relationship, in order to market to them and benefit the organisation,
in an agreed upon timeframe?
Follow up by keeping updating them with the
most current and relevant information about the
product and the market. Also let them know

FBP: Chapter 4
about the benefit of purchasing a certain
product in the long run and the future financial
securities. I have to be my client’s go-to person
and support them after you’ve closed the sale.
Changing my view as from a salesperson of
products and services to a provider of solutions
and with all my understanding about the market
and the current economy I can operate with
them and guide them to the best option for
them. I have to build that trust and focus on
relationships while prospecting because if I do
this and our relationship is firm and trusted I
believe that will open door to a lot of referral
through word of mouth.

FBP: Chapter 4
(c) How would you cooperate with other professionals and third parties
to expand and enhance the reputation of the organisation and to
identify new and improved business practices?
Through business networking

FBP: Chapter 4
(d) Once you get a referral how would you follow them up to secure the
new business relationship?
If I have no financial planning skills and license
in the system I must find a Financial planner
accredited to associate with in case of any
customer in need of this service I can refer
them to him/her.
In case of referrals and to follow up the new
business relationship, the continuous
communication will be take place with the
required party. This is essential for the
reason that when continues feedback and
communication will be taking place then this
will improve the working and attainment of
objectives in better manner.
Further after getting up the referral for
following of the major step involved is to
take the inside info of the referrer. This is
necessary in order to analyse that who has
referred to us to the other person. Along with
this another step for following up from the
referral is to make the initial call. This is
necessary because it will outline the direct
communication channel between the person
who has referred and the person who is
being referred.

FBP: Chapter 4
(e) What (i) media (ii) marketing and (iii) public relations tools would you
use for your business?
(i)facebook
(ii)Instragram
(iii)Newspaper
(f) The text states that sales “Techniques involve looking at things from
the point of view of the prospective client and understanding buyer
motives”. Identify three potential buyer’s motives and discuss how
you would tailor your approach to each.
First Home Buyers
Home Refinance
Investors
Each three has different motives, as a first
home buyer they are usually emotionally
attached to the process of purchasing their first
home, so as broker I have to ensure to follow up
on them and keep updating them of the process
for their loan and also help take them through
the journey to create close relationship in order
to satisfy them and come back with more
busines.

FBP: Chapter 4
Short Answer Question 5
Pleased with the way you handled his complaint, Bob recommends you to
his 45 year old son, Basil. Basil Butler is a management consultant who is
living and working with his wife Daisy in Manhattan. Basil sends you an
email, explaining that his 41 year old wife is expecting triplets in six
months’ time. They plan to return to Melbourne next month and take up
residence in their old warehouse apartment in Fitzroy. They need urgent
help because their neighbour is planning to sell her adjoining apartment,
which they wish to secure. Daisy loves her old place and dreams of
extending their living space by acquiring and renovating the neighbour’s
apartment. She envisions demolishing part of the shared wall to join the
two apartments into one large, liveable space for a family of five.
Basil’s firm is relocating him to the Collins Street office. Daisy, however, is
a contractor who has successfully completed a series of projects for
Basil’s firm. She has been self-employed for 10 years and does not intend
to work for the next five years. Basil earns $200,000 p.a. and Daisy earns
$130,000. They owe $280,000 on the Fitzroy apartment, but they own a
beach house in Portsea outright. The beach house is valued at $650,000.
With a penchant for luxury cars, they also have $60,000 to repay on their
BMW and $10,000 on the vintage MG. They have put the majority of
Daisy’s earnings into her superannuation fund, which has now accrued
$400,000. Basil is unsure how much is in his superannuation fund. Sadly,
they invested the bulk of Basil’s earnings in a share portfolio which
crashed with the global financial crisis. The portfolio dividends only paid
$5,000 last financial year. Together, they have $127,000 in a savings
account and $50,000 invested in a long-term deposit. The reserve price on
the neighbour’s property is $510,000, however, she is prepared to sell it
for $495,500 if she does not need to engage a real estate agent and if
they will commit to a 30 day settlement. She has given Basil and Daisy
the option of a private sale and two weeks in which to make her an offer.
As she is divorcing, she is not prepared to extend the time to allow Basil
and Daisy to secure finance in Melbourne in person.
Basil and Daisy are too busy packing up their Manhattan loft to search for
finance options. They want you to find a suitable loan with attractive
terms and arrange all the necessary paperwork. Timing is their utmost
concern.

FBP: Chapter 4
(a) Respond to Basil’s email by taking the following steps:
i. Analyse Basil and Daisy’s financial position based on the
extent of their disclosures. Use a financial calculator or
relevant software systems to help calculate their
personal and financial situation. Note good calculators
can be found online e.g.
https://www.genworth.com.au/lender/lmi-tools/
serviceability-calculator
https://mozo.com.au/home-loans or
http://www.loansense.com.au/calculator/loan-
payment.html
ii. Outline the relevant processes for proper execution of loan
documentation and determine whether you will be able to
implement the necessary actions within the neighbour’s
timeframe. Also note whether there is any need for
specialist advice or involvement from other main sectors of
the financial services industry in this case.
Issue credit guide, do a fact finder, analyse the
case. Do a research and identify three products
and present it to the client and explain the loan
details. Base on the information given it looks
very impractical for the loan to be approved
within 2 weeks’ hance advice the client to
involve a solicitor to negotiate time of another 2
weeks. Prepare credit quote, privacy
documents, preliminary assessments. Discus
with clients and take signatures on the
documents, store them in digital and physical
formats. Prepare the loan documentation, take
signatures on the loan application form and
submit to the bank which is finalised.

FBP: Chapter 4
iii. Describe how you will submit the documentation to the
appropriate lender in an appropriate manner to protect
client confidentiality.
Prepare credit quote, privacy documents
preliminary assessments. Discuss with clients
and take signatures on the documents store
them in digital and physical formats. Prepare
the loan documentation take signatures on the
loan application from and submit to the bank
which is finalised.

FBP: Chapter 4
iv. Research products and additional industry information, then
apply your industry knowledge to the current situation.
Synthesise this information into a clear and concise format
(e.g. short report or proposal) so that Basil and Daisy
can make an informed decision.
Issue credit guide, do a fact finder, analyse the
case. Do a research and identify 3products and
present it to the client and explain the loan
details. Base on the information given it looks
very impractical for the loan to be approved
within 2 weeks, hence advice the client to
involve a solicitor to negotiate time of another 2
weeks.
v. Write an email to Basil and Daisy to establish and confirm
their priorities:
 Establishing their risk tolerance and determining
their investment goals and expectations.
 Ask for any additional information you require to
complete your analysis in accordance with your
firm’s credit policy.
 Provide Basil and Daisy with an overview of the three
best products you believe are most suited to their
needs. Be sure to discuss the strengths, weaknesses,
benefits and risks, fees and charges attached to each
product.
To: Basil and Daisy
Subject: Information relating to the different
types of loan which you can take.
Dear sir and mam,
In accordance to the analysis of your scenario
the risk tolerance capacity is moderate and goal
is to purchase new house. Also in accordance to

FBP: Chapter 4
our company policy we will also be requiring the
statement of bank and the written consent that
they are returning to Melbourne and want to
buy the new house.
The three best product which are suitable for
the meeting of need of Daisy and Basil is as
follows-
1.Tracker mortgage loan- this is a type of
mortgage which involves changes in the
interest rates based on changes in banking
activity and regulations. There is
requirement of continuous tracking of
mortgage and interest rate on this basis.
The benefit oftracker mortgage is that this
is most attractive in case the interestrates
are reducing. On the other side the
limitation of this type of product is linked to
the base rates and when the rate track
increases then mortgage rate will also
increase. The rate involves the 3.99%. the
risk involved is of tracking the interest rate
for a longer period of time.
2.Fixed rate loan- this is a type of option
wherein Daisy and Basil will get monthly
payment for a fixed period of time which
can vary accordingly.
The benefit of using this product is that the
interest rate stays the same for the
durationof the fixed rate terms. In against of
this the drawback of using the fixed rate
loan is that there is loss of flexibility as it is

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for the fixed time duration. The rate
involves 3.29 % and the rate involves $500
fees in case of rate lock and $600 for
upfront establishment fees.
3.Standard variable rate mortgage- this kind
of option involves the SVR rate of interest
which is being charged once as fixed rate or
on the basis when tracker period finishes.
The benefit of using standard variable rate
mortgage is that it includes comparatively
low cost over the time and also has the
ability to switch to fixed rate mortgage.
Moreover, the limitation is lack of stability
as it includes the changes in interest rates.
The rate involves 3.85 % pa and rates and
fees involve $600 upfront establishment
fee.
(b) Write a confirmation email to Basil outlining the following:
 Basic requirements of the loan, including the
amount, term and interest rate.
 Disclose whether you have a strategic and
commercial relationship to the recommended
product.
 Outline which documents you have attached as per
compliance requirements.
 Describe the appropriate timing of events in the loan
approval process. Check your writing for accuracy
and readability.
To: Basil
Subject: relating to basic requirement of loan
and to review the documents attached

FBP: Chapter 4
Dear sir
This mail is being made to clear the basic
requirement of loan that is the total amount of
loan necessary to be taken and the interest rate
charged will be outlined. The loan amount for
both of them is $495500 which is the sale value
of house. This is important for the reason that
when the proper option will be selected then
this will provide better outcome. Along with this
there is a strategic relation being present with
the product. In addition to this, the document
need to be attached involves the salary details,
bank details and personal numbers. Further for
the approval the process need to be followed
and it will take approximately 2 weeks. The
fixed period loan is recommended because it
has a fixed tenure and fixed rate of interest.
Hence it is advisable to the Basil and Daisy that
they must go with fixed rate mortgage such that
the interest is fixed even the market is not
working well.
(c)
i. Download and complete the loan documentation (this is
found in your IIT elearning platform supporting documents)
Basil and Daisy require in a way that accurately reflects
their financial situation, personal information and complies
with lender requirements and guidelines.
ii. Copy and paste the “Loan Application” into sheet 2. Name

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sheet 1 Loan application” and sheet 2 Client records. Create
a client record in an appropriate format which will be
accessible to other appropriate advisers. You won’t need all
of the loan application you copied so cut the redundant
details out and don’t forget to change the heading from
“Loan Application” to the “Client Record”. Hint: in chapter 5
short answer question 5d you are required to copy and
paste the client record you just created and update it with
the case study details in chapter 5. You might find it
efficient to do this while you are dealing with this question.
iii. Describe how you are going to prevent fraud and verify
Basil’s and Daisy’s identity/signature and their other
undertakings when you are not able to meet them person.