Certificate IV in Finance and Mortgage Broking Assessment Task

Certificate IV in Finance andMortgage Broking
Assessment Task
FNS40815
Your details:
Name:
Address:
Phone:
Company name
Email:
Your assessment task
You are required to keep a copy of your assessment task for a period of 12 months.
Submit your assessment to our Education Team via [e-mail]
Plagiarism Statement
All assessments must be your own work and not a result of plagiarism or collaboration
with other students or workmates.
Assessment
The pass mark is 70% for each element. If you do not achieve this, you will receive
feedback via your email address and be asked to resubmit your assessment for a second
marking. Assignments will not be returned to you as they need to be retained for by us for
verification and audit purposes.
Task Assessments Total
Mark
Pass
Mark
Actual
Mark
1 Identify and Interpret Compliance Requirements 27 19
2 Deliver and Monitor a Service to Customers 39 27
3 Contribute to OHS Hazard Identification & Risk Assessment 41 29
4 Manage Personal Work Priorities and Professional Development 24 17
5 Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers
17 12
6 Promoting the Effective Use of Credit 15 10
7 Prepare a Loan Application on Behalf of Mortgage Broking
Clients
64 45
8 Steps Taken by the Credit Provider 23 16
Total 250 175
Assessor’s Initials: ____________________
Assessment Date: ____________________
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Introduction
Objective The objective of this Assessment Task is to demonstrate that you have the
skills and knowledge required to conduct a client relationship and comply with
statutory, industry and organization compliance requirements.
Elements to
be assessed
To achieve this objective, you will need to demonstrate your ability to:
The assessment tasks in this assessment will allow you to demonstrate your
knowledge and skills in relation to these elements.
Assessment
process
Start by:
1. Reading the Assessment Task.
2. Type your answers to the assessment tasks into this template document
(hand-written answers are not accepted)
3. Submit your completed document by uploading it on the ‘Ready for
Assessment’ area of www.CPDplus.com
Don’t forget to keep a copy and retain it for 12 months.
Need help? If you have any questions or would like to request a digital copy of this
assessment task, please email the Mentor Support Team at
[e-mail]
Statement of
Completion
Upon successful completion of this assessment you will be awarded the
Statement of Completion forFNS40811 Certificate 4 in Finance and Mortgage
Broking.
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Task 1: Identify and Interpret Compliance Requirements
1. Identify
compliance
requirements
Mortgage brokers face important compliance requirements, the foremost among
them being the reasonable lending provisions of the NCCP Act. The penalties for
non-compliance include loss of license (for businesses) and removal from the
industry (for individuals). If fraud is involved there may also be the criminal
penalties of fines and / or imprisonment.
Compliance requirements are not static. It is therefore important to stay up to
date with them.
Mortgage brokers also need to keep up-to-date with the actions of the regulatory
authorities such as APRA and the Reserve Bank. Their actions may not amount
to direct regulation, but through their effects on interest rates and bank lending
these authorities can have a very direct impact on the business mortgage
brokers are able to do.
(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What must a
mortgage broker do to comply with the unsuitability test?
No Mark
1. To make reasonable enquiries about the borrower’s requirements and objectives /1
2. To make reasonable enquiries about the borrower’s financial situation /1
3. To take reasonable steps to verify that financial situation /1
(b) List the sorts of items a client’s requirements and objectives could include (as indicated by
ASIC).
Mark
As indicated by ASIC inquiries concerning requirements and objectives include:
1. The amount of credit needed or the maximum amount sought;
2. The timeframe for which it is required;
3. The purpose and benefit sought; and
whether the consumer seeks particular product features or flexibility, and understands the costs of
these features and any additional risks.
/2
(c) Leading credit providers and other financial organisations have code of ethics, sometime
called codes of conduct. Select one of them and summarise it by itemising its main principles.
Mark
Australian financial system is regulated is that industry associations are encouraged by ASIC to
draw up codes of conduct that can be used as a guide to legal and ethical behaviour. The
industry associations that draw up the codes of conduct have minimal disciplinary powers, but
the codes have legal force in that the courts and external disputes resolution schemes such as
the Financial Ombudsman Service (see below) treat them as being guides to correct behaviour
that are binding on members and non-members alike.
FALSE AND MISLEADING CONDUCT – Misleading and deceptive conduct and false and
misleading representations by corporations in trade or commerce are prohibited under the
/4
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Australian Consumer Law (ACL). A court may impose monetary penalties, grant injunctions to
prevent the prohibited conduct continuing or being repeated or to require that some action be
taken such as cancellation of contracts and an award of damages. The offence also overlaps
with fraud under criminal law, so fines and jail sentences may also be imposed.
Sub-total /9
Continued
(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit
Guide.
Mark
The credit guide must be in writing and include:
1. The licensee’s name, contact details and Australian credit licence number;
2. Details on any fees and charges payable by the consumer
3. Details of any commissions likely to be received from the lender;
4. The names of the licensee’s six main lenders;
5. Details regarding complaint handling, including contact details of internal and external
dispute resolution processes;
6. Information about the licensee’s obligation to provide a written copy of an unsuitability
assessment upon request.
/3
(e) It is important to keep up to date with compliance requirements so that the required changes
can be made to organization procedures and product offerings.Suggest three sources that
you can use.
Mark
To Keep up to date with compliance requirements
Professional Association of Australia
1. MFAA – The Mortgage Finance Brokers of Australia
2. FBAA – The Finance Brokers Association of Australia inform their members of
changes to requirements before they happen. The professional associations code
of practice can also be used as a sound guidance to compliance requirements.
/3
(f) Explain the requirement for Australian Credit Licensees to keep a training register.

Mark
ASIC requires a business’s compliance measures to be documented although it acknowledges that
the level of documentation will vary from detailed policy and procedures manuals in larger
organisations to checklists in smaller organisations.Once a compliance system has been
established, it is implemented and maintained. Training has an important function in this process,
/2
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but it is not enough on its own. Compliance and ethical behavior must become a dominant value of
the business
(g) Explain APRA’s current attitude towards bank lending for investment properties.
Mark
Australian Prudential Regulation Authority (APRA) introduced restrictions that have impacted
lending for investment purposes. The banks have responded to the APRA changes by changing
serviceability requirements on investor loans; making it more difficult for investors to gain finance.
Borrowing capacity has been downsized, interest rates have risen and the repayments on existing
debt are assessed at a much higher rate.
/2
Sub-total /10
Continued
Task 1: Identify and Interpret Compliance Requirements Continued
1.2
Interpret,
analyse
and
prioritise
identified
complian
ce
requirem
ents
Some of the compliance requirements are difficult to meet. Unfortunately, also
there have been some ‘rogue’ mortgage brokers who have failed to comply – to the
disadvantage of their clients.
The finance planning industry has been plagued by non-compliance in the largest
planning groups, with the image of the industry being substantially tarnished as a
result. It may not suffer greatly because of the absence of an alternative source of
financial advice.
This is not so with mortgage brokers. They are just establishing their reputation and
consumers always have alternative of going to the lenders directly.
(a) Select three tasks you perform on a regular basis that are subject to compliance
requirements.
No Mark
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1. Find a lender /1
2. Complete the loan application. /1
3. Submit the loan application to the bank,and wait for the approval. /1
(b) Identify the compliance requirements that are relevant to the three tasks selected, indicating
the name of the relevant legislation, regulation or code of conduct.
No
1. ASIC- Application-specific Integrated Circuit /1
2. ACL – Australian Consumer Law /1
3. NCCP – The National Consumer Credit Protection ACT 2009 /1
(c) How does your organisation monitor your compliance?
Mark
Carrying out audits and monitoring on compliance areas and procedures is both an essential
business function and an ASIC regulatory requirement. The only way to ensure that processes work
is to audit them and assess the results, carrying out gap analysis and reviews on a frequent and
rolling basis. It is also important for a business to have regular, perhaps annual, compliance reviews.
Essential components of a compliance review include a review of the licensee’s policies and
procedures and a check of client files to make sure that the policies and procedures are being
followed.
/2
Sub-total /8
Total /27
Task 2: Deliver and Monitor a Service to Customers
2.
Identify
customer
needs
The relationship with a client is generally described as beginning with the
establishment of empathy. In other words, it is first necessary for a mortgage
broker to establish that he / she is truly interested in the client and the client’s
needs. It is only after that that the mortgage broker has established the right to
interview a client.
(a) Use the internet or any other source to find a definition of empathy.
Mark
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Empathy is the capacity to understand or feel what another person is experiencing from within their
frame and reference i.e., capacity to place oneself in another’s position.
/1
(b) List three open-ended questions that assist in developing empathy with a client? How do such
questions indicate empathy?
No. Mark
1. What makes you think it may be time for a change?
2. So, what’s going on?
3. How’s business?
/2
These open Questions provide information about needs and wants, and this is information
that any mortgage broker must have. /1
(c) List and explain the steps involved in an ‘active listening approach’.
Mark
Ask Questions - Find out about needs and wants of the client.
/1
Go BACK - Restate what the client has said about his or her needs to be sure the relevant details have been
heard and understood and to encourage the speaker to proceed further. The client’s thoughts and feelings
can then be used as a lead-in to further questions.
/1
SUMMARISE - to make sure both sides agree on the facts.
/1
(d)How is client service commonly monitored in your organisation? What are the two possible
outcomes?
No. Mark
1. Questionnaires /1
2. Client Surveys /2
Sub-total /10
Continued
Task 2: Deliver and Monitor a Service to CustomersContinued
2.1 Deliver
a service to
customers
In a survey on the reasons for referrals conducted by David Maister, only 10%
were due to the quality of technical work. The remaining 90% of referrals were due
to the quality of service.
This indicates that the key to maintaining client relationships and gaining referrals
is the provision of outstanding service. This has been described by Maisteras ‘over-
servicing’.
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(a) Describe three ways in which a mortgage broking organisation can attempt to ‘overservice’
clients?
No. Mark
1. Meeting up with the clients on a frequent basis in order to listen to their concern. /1
2. Provide wishes and birthday gifts and greets to the client on their birthday, anniversary etc. /1
3. Making the clients aware of the new products that have been launched and the changes that are
taking place in the market.
/1
(b) How would you keep a client informed about the progress of an application as it passed through a
creditor provider’s hands? What approximate timing might be involved?
No. Mark
1. The time lapse between interviewing the client and forwarding the credit application to the
credit provider, along with the advice to the client, should not be longer than two days
/2
2. It is important that the information should be passed on to the credit provider in a timely
manner. The key word is promptly, as soon as practicable after completion of the
preliminary assessment – on the same day if possible
/2
(c) Describe how you might attempt to resolve conflicts with clients.
Mark
1. Don’t react,respond
2. Let your position go
3. Focus on the other person
4. Seek Clarity
5. State your position.
Recognise the situation that is developing and immediately change the pattern by developing a
non-aggressive approach. Then change the situation from an adversarial struggle to a situation in
which both sides can win. This is commonly referred to as a “win win” situation.
/2
(d) How do you can prepare clients for the hiccups that can happen while their credit application is being
processed
Mark
Provide the borrower with interim updates, if practicable. Do not ask the borrower to provide
unnecessary information, particularly information that is not strictly relevant or which the lender
already has in its possession.
/2
Sub-total /11
Continued
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