FNSFMB402 Client Needs Assessment 3

This assessment covers external dispute resolution schemes, acquiring property through private sale and auction, mortgage franchisee system, age as a determinant in approving home loans, reverse mortgage, reasonable steps to verify information, and records to keep for personal advice provided to clients.

F NS40 81 5 C er t i f i ca t e IV i n F IN A N CE & M O R T G A GE
B R O K IN G
F N SF MB 40 2 I d e nti f y cli e nt n ee d s for br oki ng s er v i ce s
Assessment 3

Identify and explain the scope of three external dispute resolution schemes approved by ASIC for the
financial services sector.
Ac ti v it y 1 Ans wer
The three external dispute resolution schemes approved by ASIC for the financial service sectors along with its
scope is as follows:
 Financial Ombudsman Service limited (FOS): It provides free and easy to use service to settle
complaints between consumer and businesses.
 Credit and Investment Ombudsman (CIO): It considers the complaints it's regarding participating
members.
 Insurance Ombudsman Complaints Service: It considers the complaints regarding the delay in settlement of claims
(Ramya, Kowsalya and Dharanipriya, 2019).

What are the main differences, from a purchaser’s point of view, of acquiring a property through private
sale and through an auction?
Ac ti v ity 2 Ans wer
From purchaser point of view, the difference between private sale and auction is such that in an auction the buyer
bid for the property of seller on a specified pre-agreed date and time. But on the other hand, in private sale there is
no fixed time frame because the property exist in market until it actually sells (Bafna, 2021).

Activity 3
Explain how the mortgage franchisee system operates in Australia.
Activity 3 Answer
In Australia, Mortgage broker franchisee is available to the individual broker so that they can set up their business
without any ready-made tool kit (Mustafa and et.al., 2019). The broker work on a commission model in which
they get commission from the both party such as lender and borrower for providing the best service such as loan.

Activity 4
Explain why age is an important determinant in approving home loans.
Activity 4 Answer
The age of the borrower plays significant role in the approval of loan along with the determination of loan tenure and quantum
(Akshay Kumar and Archana, 2019). It is because age of people decide whether such people are earning or not because
mainly teenagers and children along with the old age people do not earn. So, in case if the lender do not verify the borrower
age it will increase the risk of loss of loan repayment.

Activity 5
Explain how a reverse mortgage works, including assessing some of the risks.
Activity 5 Answer
Reverse mortgage is basically a loan in which the people with age 62 or more can acquire the loan up-to the value of their
home in lump-sum, fixed monthly payment or line of credit. This is work in such way that rather than making payment to
lender by homeowner, the lender make payment to homeowner (Mustafa and et.al., 2019). The risk attach with this loan
type is that it is suitable for only short-term solution rather than any long-term. In case if the person who have acquired this
loan pass away that their child or other person does not have right to live in that home.

Activity 6
Finance and mortgage brokers are required to take reasonable steps to verify information provided by a
client. What does reasonable mean in this context?
Activity 6 Answer
Reasonable steps means the steps which a receiving party takes in order to protect their property and assets ( Bafna,
2021). For example, in order to provide the loan to the borrower, banks takes reasonable steps such as proper
verification of clients income, balance sheet, residential status etc.

Activity 7
What sort of records must a finance/mortgage broker keep with regard to personal advice provided to
clients?
Activity 7 Answer
The sort of records must keep by mortgage or finance broker is financial records, transactions with customers, list of banks
products details, copies of discloser and payroll records (Akshay Kumar and Archana, 2019).

Activity 8
How must personal information be stored to comply with the requirements of the Privacy Act?
Activity 8 Answer
The personal and confidential information of the clients must be stored by the broker through electronic
mode. Also, it must be stored using a strong and complex password so that unauthorized people can't
access it (Ramya, Kowsalya and Dharanipriya, 2019). It is because the information of the client is
confidential and it must be stored because any leak of clients personal information will largely affects
their business. So, it is always advisable to the broker that they have to comply with all process and
procedure of the Privacy Act.

REFERENCES
Books and Journals
Ramya, N., Kowsalya, A. and Dharanipriya, K., 2019. Service quality and its dimensions. EPRA
International Journal of Research & Development. 4. pp.38-41.
Mustafa, A. and et.al., 2019. FACTORS INFLUENCING CUSTOMERS’SATISFACTION ON AR-
RAHNU SERVICES AT POST OFFICE.
Bafna, D., 2021. An Empirical Assessment of Expectations versus Perceptions in the Delivery of
Financial Services of Stock Trading Brokers in Rajasthan.
Akshay Kumar, G. and Archana, V., 2019. A Study on Customer Satisfaction Towards Arka Insurance
Broking Pvt Ltd, Bengaluru.