Determine Client Requirements and Expectations

Determine Client Requirements and Expectations
Assessment Task
FNSFPL506
Your details:
Name:
Address:
Phone:
Company name
Email:
Your Assessment Task
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 Task for a
second marking. Assessment tasks will not be returned to you.
Task Assessments Elements Target
Mark
Pass
Mark
Actual
Mark
1 Inform client of the financial planning process and
services FNSFPL506.1 49 34
2 Obtain relevant information on client's existing financial
situation FNSFPL506.2 77 54
3 Determine client expectations and requirements with
respect to financial planning service offered by the
representative
FNSFPL506.3 16 11
4 Prepare and update necessary documentation where
required FNSFPL506.4 17 12
Total 159 111
Assessor’s Initials: ____________________
Assessment Date: ____________________
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Introduction Name: ____________________
Objective The objective of this assessment is to determine client requirements and
expectations for the practical client situation described in the case study
assigned to you.
Scope To achieve this objective, you will need to:
 Inform client of the financial planning process and services,
 Obtain relevant information on client's existing financial situation,
 Determine client expectations and requirements with respect to the
financial planning service offered by the representative, and
 Prepare and update necessary documentation when required.
The assessment tasks in this assessment will allow you to demonstrate
your knowledge and skills in these elements
Assessment
process
Start by:
1. Reading the Assessment Task and case study.
2. Type your answers to the assessment tasks into this template
document (hand-written answers are not accepted)
3. Submit your completed document by emailing it to
[e-mail]
Don’t forget to keep a copy and retain it for 12 months.
Need help? If you have any questions, please email the Mentor Support Team at
[e-mail]
Units of
competency
Upon successful completion of these assessments, you will be awarded
two units of competency for FNSFPL506: Determine Client
Requirements and Expectations
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Assessment Task 1 Name: ____________________
1.0 Financial
planning
process and
services
Establishing client rapport at the start of a professional relationship is a
preliminary step in the Financial Service Advice Process.
The first assessment task requires you to inform the client of the financial
planning process and services, as detailed in the case study allocated to
you.
This requires that the:
 Financial planning process and role, and any limits of authority of the
representative are explained to the client,
 The licensees and principals of the organisation and services and
capacity of the organisation, including any relationship to other
financial services are explained to the client,
 Fees and charges are explained to the client and the client's
understanding of these is confirmed before proceeding with delivery
of service,
 Clients with special needs are identified and appropriate action taken
or referral made, and
 Procedures for internal and external complaints handling and
resolution are explained to the client.
For this activity, you should refer to the FSG that accompanies this
assessment task.
In this activity, you are required to prepare for an initial meeting (which is
also the ‘fact finding’ interview) with your clients in the case study by
answering the short answer questions in the spaces provided in the
following pages.
Marks /49
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Assessment Task 1, continued Name: ____________________
Questions Marks
(a) Give some thought to the sort of things you would cover in the first meeting (assume this
meeting will also incorporate the ‘fact finding’ interview). Include any legal requirements
and other documentation that may be helpful in the interview.
The first meeting is an opportunity to properly know the client and build a good rapport with
client to have a long-lasting relationship. The meeting should start with proper greetings and
personal level small talks to make client feel comfortable. Then, it is important to discuss the
client expectations from the meeting and overall financial planning process. The advisor is
legally required (under pt. 7.7 of the Corporations Act) to present financial services and credit
guide (FSCG) to discuss about client privacy rules, firm’s complaints handling standards,
recommended product list, firm’s fees and commission structure and firm’s services list &
limitations. The advisor should use the data collection forms to collect the information regarding
client’s personal life, current financial position, employment details, investment details, financial
goals & objectives, risk profile and financial knowledge. All the copies of the relevant documents
that the client was prior informed about should be collected like pay slips, superannuation
certificates, tax-returns etc. The advisor should also get the authority from client that enables the
firm to collect any required information of client from regulators and specialists. They should
also get the client’s signature on the completion of SOA agreement. / 5
(b) How might you ask the client to prepare for the first meeting?
Ask the client to gather and get the overview of the relevant documents regarding their personal
information, employment information, financial goals, product preferences, assets, liabilities,
expenses, estate plan and insurances. They should also be asked to document any limitations
regarding the information sharing, to think about their comfort with the risk in general, to prepare
the information regarding their prior investments and to prepare the list of the questions and
expectations regarding the financial markets & financial planning process.
/ 5
(c) To establish a relationship with your clients, what strategies might you use to build
rapport during the interview process?
The best way to build rapport with the client is to be respectful, gracious and by treating client as
a most important person. So, the advisor should pay attention to the basic things like being
punctual at the meeting, noting all the client details, dressing professionally and having all the
formalities and paperwork ready beforehand. The adviser should start the meeting with the small
talks and general things to make client feel relaxed and comfortable. Another factor that can
increase client’s confidence and faith in the advisor is by sharing the total experience and past
results of the firm. As the client will more likely to listen and believe the advisor if he is confident
about his abilities. The adviser should show curiosity and active listening skills to make the client
believe that he understand client’s actual position. This will open up the clients and help build a
strong connection and increased trust.
/ 5
(d) In point form, explain the steps in the financial planning process.
The financial planning process involves the determination and planning of meeting the client’s
financial goals by optimal management of financial resources. Following are the main steps
involved in this process:
Defining the overall scope of this process and the client-adviser relationship- The advisor should
explain the overall process; clarify client’s expectations and build rapport with the client. The
scope of the financial planning process is set that is the main objective of the client and how
adviser can help achieve it. The fees structure and time-lines are also finalised. This sets the
foundation of this planning process.
Identifying the client’s financial goals- The short, mid and long term goals are identified in
/ 6
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accordance with the client’s willingness and ability to take risk. In this step the priority of different
objectives is set. This stage impacts the overall shape of this process.
Assessing the financial situation of the client- The adviser uses the available information
regarding the client’s income, expenses, assets, liabilities, insurances and investments to identify
their current financial situation.
Preparing the investment recommendation and overall financial plan- The adviser uses all the
background and current information related to the client to develop a financial plan keeping in
mind the current market conditions to achieve client’s financial goals. So, the appropriate
strategies and products are recommended to the client.
Implementing the recommendations- After finalising the financial plan to achieve the client’s
objective. This is the step where everything is put into practice after getting client approval. If
necessary the adviser can consult other specialists to implement the recommendations.
Reviewing and monitoring the financial plan and recommendations- Client’s circumstances,
priorities and goals can change with time. Also the market conditions will change. So, it is
necessary to review the financial situations and objectives of the client to make changes to the
financial plan.
(e) What details would you provide regarding your licensee and principal?
The adviser will provide the details regarding his professional details as well as the details of the
company/licensee he represents. He would present the firms total experience, past results and
the names of its principal partners. The financial adviser also needs to present financial services
and credit guide (FSCG) to the client that contain information regarding firm’s privacy rules, firm’s
complaints handling standards, recommended product list, firm’s fees and commission structure
and firm’s services list & limitations. The financial advisory firm mentioned in the case is:
Mentor Financial Planning Pty Ltd
ABN 99 109 240 897
AFSL xxxxxx
Level 2, Suite 2
349 Collins Street
Melbourne Vic 3000
Phone: [phone]
Fax: [phone]
The adviser will also present his professional details including his executive Business card that
contains the advisor’s name and his ASIC Authorization Representative Number. Also he would
provide his past experience and qualification details. The adviser mentioned in the case is Alex
Mentor (MBA, CPA) with ASIC ARN 111111. He has more than 25 years of experience in
financial service industry. / 4
Subtotal / 25
Continued
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Assessment Task 1, continued Name: ____________________
Questions Marks
(f) Explain the products and services you can offer the client and the capacity of the
organisation.
Mention Financial Planning gives both the personal as well as general advice. The firm is
authorised to give financial advice and services regarding the following list of services:
Retirement planning
Risk management and protection of assets;
Retrenchment and redundancy advice;
Access to direct share advice
Wealth creation strategies;
Social security.
Alex Mentor, the financial adviser has more than 25 years of experience in the financial services
industry. He is MBA and CPA. He is authorised as an executive of Mention Financial Planning
and ASIC member to provide advice regarding these financial products and services. / 2
(g) What would you tell the client about yourself?
The financial adviser would share the following details:
His name.
His ASIC authorisation representative number.
His association with the firm.
His past experience.
His qualifications.
The services and products regarding which he is authorised to provide advice and his limitations.
He can also share some personal details if he wants to have good bonding with the client. / 5
(h) List the type of fees you could charge the clients. What are the benefits of explaining
these fees to your clients?
Mentor financial planning charge clients either on the basis of time it spend on client’s plan or
brokerages paid by the issuers of financial products based on the funds invested in these
products. An hourly rate of the firm ranges from $ 100 to $ 130 + GST.
The commission received by Mentor Financial Planning can either be initial commission on the
client’s investments. These payments are made by the fund manager of the financial products
the client invested in. This commission range between 0% and 5%. These commissions are part
of the entry fees that fund manager charges the client or they are paid by the fund manager. In
some cases the firm also receives annual on-going
Commissions for the investment life. This can range between 0% and 2%.
The benefits of explaining all the fees to the client are that it reduces any conflict of interest, it
reduces the possibility of future disputes and it increases the transparency of the firms business.
This allows the client to understand in advance all the fees & commissions and to decide
whether these charges are worth paying for and what kind of services they can expect. This
increase the clients trust and strengthen the firm-client relationship in the long-run.
/ 5
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(i) How would you assess the client's understanding of the fees and charges before
proceeding with delivery of service?
To assess the client understanding of fees and charges the adviser can ask the client regarding
any confusion and doubts they have regarding these charges. If they have any questions/doubts
the adviser should clarify those. Also the adviser can discuss certain hypothetical scenarios with
the client to judge their understanding and explaining the fees structure in detail.
/ 2
Subtotal / 14
Continued
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Assessment Task 1, continued Name: ____________________
Questions Marks
(j) Who would you consult with, or refer your clients to, if they had:
i) a deficiency in English A language interpreter who can translate both the languages to
have proper flow of communication between the client and
adviser. /1
ii) a need for a variety of
products and service outside
of your authority
Either internal adviser from his firm if the firm deals with these
products & services or external specialist who deals in such
products. /1
iii) complex estate planning
situations
External specialists/experts/lawyers. / 1
iv) unbalanced financial
situations
Should educate the client and take appropriate actions to
balance the ongoing financial situation. / 1
v) a disability Experts (Depending upon the disability) who can lead to proper
communication between the client and the adviser. Or to
another financial adviser who also has medical speciality in
dealing with disable people. / 1
vi) needs of different cultural
backgrounds
Cultural specialists to understand the mentality, thought process
and general lifestyle of the client or if there is huge issue then
some adviser from the same culture. / 1
vii) age related needs (i.e. very
young or older age groups)
The adviser can use his experience to deal with such clients
and by paying attention to their specific needs. / 1
(k) Outline the three steps your clients should take if they have a complaint or dispute prior
to contacting ASIC.
1) They should first directly contact the adviser to inform about their complaint.
2) If the complaint is not properly resolved within 3 days then the client needs to send written
complaint to the Complaints Manager, Mentor Financial Planning Financial Planning Pty Ltd, Level 2,
349 Collins Street Melbourne VIC 3000.
3) If the complaint is yet not satisfactorily resolved then the client can complain to the Financial
Ombudsman Service (FOS) at 1800 335 405. This service is free of charge as the firm is member of
the Financial Ombudsman Service (FOS).
For further escalation they can reach the Australian Securities and Investment Commission (ASIC)
on 1300 300 630. / 3
Subtotal / 10
Total / 49
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