Identify and Develop Broking Options for Clients with Complex Needs

This document discusses the process of identifying and developing broking options for clients with complex needs. It covers relevant legislation, key products available in the broking industry, risk issues, and recommendations. The document also includes a research task on types of complex features and the information needed to assess client risk issues and tolerance. It provides insights on the importance of conducting comprehensive and ethical discussions with clients and explains how to use a risk profile to assess the impact of risks. Additionally, it discusses research methods for loan structures and options, areas to analyze for determining opportunities and constraints, and the process of analyzing and prioritizing available options. The document concludes with information on reviewing selected broking options and making referrals to accountants, financial advisors, and lawyers in a broking situation.

Identify and develop broking options for
clients with complex needs
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Table of Contents
Written activity............................................................................................................................3
Third party report.........................................................................................................................3
Research task...............................................................................................................................4
REFERENCES..............................................................................................................................11
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Written activity
Relevant Legislation, Regulations and Codes of Practice.
The insurance industry is governed by Mortgage & Finance Association of Australia
(MFAA). The ASIC provides regulatory guidelines to be followed.
Corporations Act 2001 state that a single licensing regime for financial sales, advice and
dealings and a specific procedure for financial exchanges.
The broker must be authorized under the Australian Financial services (AFS) license.
Key Products Available In the Broking Industry
The products are:
Mortgage Brokers- they help the borrowers in selecting and then applying for mortgage finance
for residential as well as investment in real estate (Agrawal and Mittal, 2019).
Insurance Brokerage- These help the clients in selecting the insurance plans that fulfil their
needs.
Stock Brokerage- They provide services related to investment in the stock markets. Here, a
portfolio is offered to client on basis of their needs.
Commercial loan brokerage- The brokers help the business in acquiring commercial loans to
meet the needs of their business.
Relevant Risk Issues
Borrowing risk and gearing – it refers to taking debt to invest in capital assets as compared to
the equity. It is the measure of the financial leverage of the company. So, high gear has high
risk.
Specific product risk- it is related to specific product. In this the product selected by client may
fail in financial market.
Institutional risk- It is associated with a particular organisation. The business may not be able
to achieve its goals and objectives. (Akshay Kumar and Archana, 2019)
Volatility of income and capital- The risk that the future income and capital might change.
As future is uncertain so level of change is also uncertain.
Third party report
1. List of complex needs and features
They are n
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2. client risk issues and tolerance
Risk issues are delay in legal procedure.
Insufficient amount to pay for broking
Illegal registration of land
3. Impact of risk on client
The organisation will have to bear huge financial loss
It will impact on its brand image
Any legal change in procedure of broking will increase cost of asset.
4. Determine opportunities and constraints
Opportunities are
Change of broker.
Rise in investment
Constraints are
High chances of risk with rise in investment
5. Research loan structure
The loan structure is as follows :
Interest rate
Loan to value
Monthly payment
6. Complex financial issues
The complex issues are :
In terms of legislation is fees and charges of brokerage which needs to be paid
In terms of tax is the rate at which tax is to be paid
In insurance is amount paid for it.
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7. Brief of fee charge and risks
The fees charged is
Legal procedure fees incurred in it
Brokerage charges
Tax and insurance fees.
8. discuss options that are rejected
The options rejected are :
Taking of insurance
Paying of extra fees to financial advisor
9. Checking of preliminary options
It is analysed that options offered to client are appropriate as per his needs. They are also
in compliance with legal requirements.
10. Broking options for client
Online trading
Third party
11. List of referrals
The first referral is
Financial advisor
Lawyer
Accountant
12. Anticipated fees and charges
Legal fees- $30
Brokerage - $10
Tax - $20
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Charges for making more investment is 2% of amount invested.
13. Info on complaints procedure
The procedure for both internal and external complaint is :
Taking to customer care
Filling a form
Submitting form as per legal procedure
14. Recommendations
Instalment loan
Interim loan
Credit loan
Letter of credit
15. Any complex feature related to client needs
Commercial loans
Native title rights
16. Risk issues
Borrowing risk
Economic risk
Specific product risk
17. broking recommendations are:
The firm should analyse all options and risks and then opt for one.
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Research task
1. Identity and briefly explain the following types of complex features that you will need to
discuss, review and clarify if they relate to a client situation and needs
Commercial loans- these loans are done between bank and business. There are for short term and
basically is taken for large capital investment. However, commercial loans are offered to
business in order to ensure that they have enough cash flow to repay it.
Chattel leases- they are those types of loans which are borrowed to buy a movable property like
truck, car, etc. in this borrower has to pay regular instalments. Moreover, ownership is
transferred to borrower when loan is repaid (Barrow, Brown and Barrow, 2018)
Native title rights.- These are the rights and interest of land and water of aboriginal and Torres
land people. Here, client can make application to federal court for their right. Thus, under the
NTA native can get its title claim. The act is modified in 2009.
Heritage issues- as name depicts heritage means the sites that are important to culture and
society and is preserved by government. So, if client property is heritage then it is kept in state
applies. This restricts client to make any changes in property. Usually, heritage property are old.
Contaminated sites or properties near noxious industries.- the sites that are highly polluted is
included in this. So, the bank or other financial institutions shows less interest in providing loan
against these sites. This is because the resale value is very less. Furthermore, people living in that
surrounding are prone to health issues (Chimedza, 2017).
2. What information do you need to identify when you are exploring and discussing with client’s
risk issues and tolerance?
There are some other information is also required in order to discuss client issues. the
info related to client financial history. Also, data of source of income of client and past record of
sales and profits. Moreover, information regarding past loans that is taken and leases that has
done with third party or any other person. Besides, legal property documents and papers.
3. Why is it important to ensure that discussions with clients are conducted comprehensively and
ethically?
The discussion must be done ethically because it will help in sharing of each and every
detail with transparency. Also, it must be ensured that client do not get confuse after reading
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info. It will lead to dissatisfaction in client. Furthermore, the entire procedure of loan can be
done legally and in transparent manner (Kowsalya and Karthikeyan, 2016). Alongside, it must
be ensured that client financial background is completely checked and evaluated. Also, in
discussion it must be verified whether info provided is correct or not so that in future no issue or
risk is faced by client.
4 Briefly explain how to use a risk profile to assess the impact of risks to the client or
organisation.
A risk profile enables in finding out various types of risks related to loan and broking.
Also, each risk degree and its impact is identified. Furthermore, client data and info is also
analysed with that risk. In addition, client profile is evaluated with risk profile. Thus, on basis of
that it is easy to assess impact of risk to organisation.
5. What methods could you use to engage in further questioning and information gathering if you
have not gathered sufficient information to complete an adequate risk profile? Discuss at least 2.
The methods that can be used are :
Financial records- In this method financial record of client can be evaluated (Mohanan, 2019). It
will provide precise and in depth data and info regarding organisation. Also, sources of income
and expenses can be collected from financial record.
Questioning to business partners- it is a method in which information can be gathered from
business partners. It will provide data that how well organisation is performing. Furthermore,
client financial info such as property, asset, etc. and other can be gathered.
6. What are the areas of the client situation that you may need to analyse to determine their
opportunities and constraints?
Here, first of all area related to client past financial record and sources of income has to be
determined. Besides that, another area is the limit to which organisation has done investment is
evaluated. It will be useful in giving insight on opportunity. In addition, client loss and profit
must be identified (Navyashree and Mallika, 2018).
7. Discuss 3 of the research methods you could use to research loan structures or options.
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In order to research for loan structure and options there are several methods that can be
used. They are defined as :
Laws and policies- it is first method through which loan structure can be identified. The laws and
policies consists of specific framework through which structure is formed. Besides that, it
contains many other options as well of different loan structure.
Past records- it is also a method which can be used to search for loan structure. In this client past
record can be evaluated and then accordingly loan structure is set. This will give details about
type of loan and its structure.
Internet- this is a method where loan structure are easily find out. Here, different types of loan
structure along with its pros and cons are available (Nazama and Goud, 2018).
8. What are the 4 areas that you need to analyse complex financial issues in terms of? Briefly
describe each.
Net profit
Profit margin
Macro economic factors
Price range
9. Identify and define the information you will need to include and compare in your model to
analyse and prioritise the available options.
The information that needs to be included is types of risk mentioned in risk profile. This
is because it helps in comparing options. Along with it, information related to impact of risk is
also included in it to compare options. It becomes easy to do so. The client past financial record
is gives view about need and requirement. Through that, options are categorised. At last another
info is loan structure. With that it is easy to compare options and select it.
10. What will you need to do with the available options once you have the outcomes of your
modelling?
If the client requests alternatives, the financial service provider should evaluate different option.
This can be based on client requirements. Hence, then accordingly viable option can be
suggested to client and given it to choose option and take effective decision. The options offered
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must be suitable and met client expectations (Sarkar and Sahu, 2018). Apart from it, pros and
cons of each option should be defined clearly along with various types of risks involved in it.
11. What are the requirements that you will need to check to ensure the preliminary options
comply with?
In this there are various requirement which has to be checked. First is client needs and
requirement. It helps in selecting the area of option in which will be suitable. Another is risk
profile factors and its impact. Through this, it will be easy to analyse options and check it. Thus,
high risk options can be eliminated. Moreover, another requirement legal procedure and its
flexibility which will help in complying with option. At last amount of investment in its return in
future is also considered in it.
12. How can you assess the ability of the preliminary options to successfully meet client needs?
It is necessary to asses ability of option to meet client needs (Singh, 2018). This can be
assessed with help of risk profile. Here, risk impact can be analysed and then lowest risk
portfolio can be selected to meet client needs. Furthermore, option feasibility that is expected
return in future can be assessed. This will be helpful in meeting client requirement.
13. What types of explanatory material could you develop or obtain to help clients review the
selected broking options?
The explanatory material that can be used is loan structure of broking options. It will give
an overview to client about how they can repay it. Another material that can be used is legal
procedure of broking option which will help in analysing the suitability of broking option. The
past record of flexibility and interest rate of repayment of loan can be used as material in it.
Furthermore, fees and charges can also be used in material.
14. Briefly discuss why you might consider a referral to each of the following in a broking
situation:
Accountant- the accountant provides crucial data and information about finance. Alongside, past
record and financial data and info can be obtained (Singh, Singh and Chavan, 2020). Usually,
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accountant is responsible for managing overall finance record. Thus, he gives advise on how
broking will impact on personal financial performance.
Financial advisor- the advisor gives vital data and info about current market conditions and what
type of portfolio is suitable to fulfil the needs. Furthermore, he gives advise on various types of
risks related to portfolio and its impact. Also, advisor suggest the amount of investment to be
made, when it should be done and how. Thus, it becomes identify correct portfolio with
minimum risk.
Lawyer- A lawyer gives legal advice on related to broking. He suggests various types of options
in it and how it will be useful in fulfilling needs. Besides that, all legal documents required
during broking is mentioned by lawyer. It includes affidavits, stamps duty, fees, brokage and
other legal formalities. However, overall legal procedure is prepared and described by lawyer
(Agrawal and Mittal, 2019).
15. List 3 examples of risk management strategy recommendations you may incorporate into
your materials for the client.
Thee examples are as follows:
 The first is analysing and evaluating entire risk management and its impact on client. It
will help in taking effective and relevant measures.
 Here, second thing that should be done is using personal and professional knowledge to
develop risk strategy for client
 Third is selecting the option which constitutes low risk so that high risks chances are low
and monitoring it in effective so that risk is minimised quickly.
16. Why is it important to include a brief description of the anticipated fees and charges in your
client materials?
The material must include fees and charges so that client is able to find out what type of
fees is charged in broking. Also, what fee structure is and percentage of tax included in fees.
Besides that, charges are mentioned in it so that it describes about how much charge is taken and
for what reason. So, it gives clarity to client that why specific fee or charge they have to give.
Also, in future the client can not question on why particular fee is taken (Akshay Kumar and
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Archana, 2019). That is why description is mentioned in it. Moreover, in terms and condition
fees and charges are mentioned as well.
17. Briefly discuss the types of information that you would include on complaints resolution,
both internal and external, in the client materials.
The information that can be included in client complaint is
Legal document- this info is required in complain resolution. It shows legal proof on basis of
which complaint is solved.
Terms and condition- here, info regarding all terms and conditions should be included.
Charges and fees- it is also included in complain resolution. this is internal information as client
has paid it during broking process (Barrow, Brown and Barrow, 2018).
18. What information should you include in your documented broking information and loan
structures, to be presented to clients?
The information needed to be included is terms of conditions of broking and in detailed it
should be. Another is overall broking procedure along with legal documents required in it. Along
with it, in loan structure info regarding total time of repayment and penalty and charges in it. The
each loan instalment has to mentioned in structure as well.
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REFERENCES
Books and journals
Agrawal, S.R. and Mittal, D., 2019. Measuring CRM effectiveness in Indian stock broking
services. Journal of Global Information Management (JGIM), 27(1), pp.144-164.
Akshay Kumar, G. and Archana, V., 2019. A Study on Customer Satisfaction Towards Arka
Insurance Broking Pvt Ltd, Bengaluru.
Barrow, C., Brown, R. and Barrow, P., 2018. The Business Plan Workbook: A Step-By-Step
Guide to Creating and Developing a Successful Business. Kogan Page Publishers.
Chimedza, P., 2017. An investigation into the dimensions that result in poor growth in short-term
insurance broking firms in Zimbabwe: The case of Perpro Insurance Brokers.
Kowsalya, P. and Karthikeyan, R., 2016. A STUDY ON INVESTOR AWARENESS
TOWARDS COMMODITY MARKET IN KARVY STOCK BROKING LIMITED,
ERODE. International Journal of Management Research and Reviews, 6(3), p.335.
Mohanan, P.A., 2019. Client driven trading strategies: A practical modeling in the context of
financial derivatives market. Serbian Journal of Management, 14(1), pp.123-144.
Navyashree, D. and Mallika, B.K., 2018. A Study on Construction of Optimal Portfolio Using
Single Index Model at Karvy Stock Broking Ltd, Bangalore.
Nazama, A. and Goud, G.V., 2018. A Study on Fundamental Analysis of Selected Oil and Gas
Companies at Edelweiss Broking Ltd, Bangalore.
Sarkar, A.K. and Sahu, T.N., 2018. Investment Behaviour: Towards an Individual-Centred
Financial Policy in Developing Economies. Emerald Group Publishing.
Singh, K., 2018. The Future of Financial Services after Brexit: Options and Limitations.
Singh, R.K., Singh, A. and Chavan, S., 2020. Distribution Channels in Life and General
Insurance: A Conceptual Analysis. Studies in Indian Place Names, 40(27), pp.590-609.
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