Broking Options for Clients with Complex Needs

This document discusses the broking options available for clients with complex needs. It covers risk issues, complex features of client situations, key products in the broking industry, and legislation and regulations. It also provides answers to written/oral questions and research tasks related to broking. The document emphasizes the importance of effective communication and understanding client needs.

PRESENT BROKING
OPTIONS TO CLIENT
WITH COMPLEX NEEDS

Contents
WRITTEN ACTIVITY...................................................................................................................1
Risk Issues...................................................................................................................................1
Complex Features of a Client Situation and Needs.....................................................................1
Key Products Available In the Broking Industry........................................................................1
Legislation, Regulations and Codes of Practice..........................................................................2
WRITTEN/ORAL QUESTIONS AND RESEARCH TASK.........................................................2
REFERENCES................................................................................................................................7

WRITTEN ACTIVITY
Risk Issues
Borrowing risk and gearing – This risk is related to the investments involving leveraged
assets..
Specific product risk – This is an unsystematic risk which will impact only one stock and
not the entire portfolio.
Institutional risk – This is a systematic risk which will impact all the stocks having similar
institutional features.
Risk factors and return expectations of the client – Even after communicating every risk
associated with the stock, client expects high returns which lead to termination of the brokering
relationship.
Volatility of income and capital – It is important to identify the volatility in income and
capital so that investment recommendations which are provided must not impact livelihood of
the client(Ali and Banks, 2014).
Complex Features of a Client Situation and Needs
Commercial loans – Such type of client requires to invest in stock where they can gain high
and continuous interest.
Chattel leases – Client requires an option for investment where they can provide funds
against the guarantee of a movable person.
Native title rights – Such client requires an investment option which can interest them by
having set of rights and interest over land or waters.
Heritage issues – Such type of client requires an investment option in which they can invest
in a cultural heritage site and against which they demand interest over the property.
Contaminated sites or properties near noxious industries – Such client requires investment
proposal which can provide them right over the properties which are contaminated due to
industrialisation (Awards, 2011).
Key Products Available In the Broking Industry
Products which are available in broking industry are:
 Mutual funds
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 Capital gain bonds
 Corporate Fixed deposits
 National pension systems (Bowles, 2012).
Legislation, Regulations and Codes of Practice
There are various legislations, regulations and code of practice which impacts brokering
industry of Australia and some of them are identified and stated below:
 Mortgage & Finance Association of Australia (MFAA)
 Finance Brokers Association of Australia (FBAA)
 Centrelink Code of Operation
 Privacy (Credit Reporting) Code
 ePayments Code
 Australian Privacy Principles
 ACCC/ASIC Debt Collection Guidelines
 Financial Planning Association (FPA) Code of Professional Practice
 Customer Owned Banking Association Code of Practice (Kushwaha and Agrawal, 2014).
WRITTEN/ORAL QUESTIONS AND RESEARCH TASK
1.
Every client has an extent to which they understand financial concepts. This
understanding can vary from client to client. It has been observed that client has various needs
and objectives from a financial broker which they have developed according to their financial
understanding. It is essential as a broker to fulfil the needs and objectives of client in a manner
that is consistent with their understanding otherwise even if the solution for their needs is
effective but is not understandable by them then it will be of no use of them.
2.
There is a techniques by which it can ensured that broker has fulfilled the needs and
objectives of client in a way that client wanted; this techniques is constructive feedback. Broker
can seek feedback from client that whether or not their needs are fulfilled as expected.
3.
By using repetition and seeking feedback can help in maintaining high level verbal and
non verbal communication. Broker will ask the clients to repeat the communicated information
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so that it can be ensured that they have understood the information. For client with special needs,
non verbal communication as written documents will be used.
4.
It is considered that the combination of audio and visual information is the best suited
method for presentation which can influence people (Mathews-Hunt, 2016). Using this fact,
power point presentations, brochures and videos will be used for introducing services, strategies
and recommendations to clients.
5.
The reason behind using a language which clear and unambiguous is to fulfil the most
important aim of communication and that is effective conveying of information. If the
information which is communicated is not clear and understandable then clients’ needs cannot be
satisfied. Using jargons is avoided to ensure formal conduct.
6.
In order to ensure that industry requirements of stock brokering are fulfilled, it is
important to provide various information against disclosure of capacity. This information
includes risk in investments, termination of relationship, rules and bye laws of stock exchange
and broker margin obligations.
7.
There are various things which must be considered and discussed with clients while
guiding them through the broking options. Risk in each option must be communicated to the
client so that they can make an informed decision. Obligations of client in each broking option
must be communication along with brokerage fees in each option.
8.
For explaining the fees, charges and commissions of brokerage, client can be provided
with a fee schedule which they can read and then make a decision regarding investments. This
fee schedule can also be provided as a power point presentation in which client can also engaged
in Q&A session.
9.
It is important for clients to provide and disclose their commercial relationship with the
products and services in portfolio plan as if there is any kind of relationship which can help in
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seeking inside information then it can be regarded as insider trading which is against the rules
and regulations of stock exchange.
10.
The type of issues which are required to use the professional judgement are the concerns
of clients regarding which investment has highest risk and which investment is appropriate for
them in respect to their income and expenses.
11.
In order to seek confirmation from the client that they have understood the broking
options presented, broker can use the method of cross questioning. Broker can ask questions
from the communicated options by which it will be confirmed that clients actually have
understood the information or they are just pretending.
12.
Steps for responding to identified client concerns:
 Emphasise with client and build a sense in them that there is a solution for every concern.
 Offer a solution
 Provide alternatives for that offer
 State pros and cons for all the options
 Seek follow up (McManus, Albrecht and Graham, 2011).
13.
If client requests alternatives to the given recommendations, then first of all a time frame
will be demanded so that alternatives can be devised. After this, other brokers will be consulted
and then a number of alternatives will be compiled. These alternatives will then be
communicated to the clients along with their pros and cons so that client can make an informed
decision.
14.
It is important to consider some limits when broking options are presented to clients.
These limits are presenting investment options which are appropriate for their aims and
objectives. And broking options which are appropriate for their income status.
15.
A basic complaint procedure maintaining communication channels which can be followed by
a broker is developed below:
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 First of all, complaint of client will be listened carefully to get all the insights.
 Details of the complaint will be recorded.
 In few cases, the recorded details will be discussed with superiors.
 All the facts related to the compliant will be checked.
 Options for solution will be devised.
 Action will be taken for resolution of complaint.
 Follow up.
16.
In order to obtain agreement to proceed from clients, a brokering contract will be
developed in which all the disclosures will be made. In such contract, investment details and
scope will be outlined along with payment terms. By acquiring the signature at this contract,
agreement of client will be gained.
17.
Documentations which will be used to record client interactions and provide them
conformation are time and date, relevant and appropriate names, transaction information, details
of concerns, steps to be done to resolve the issue and schedule for follow up (O'Callaghan,
2015).
18.
It is important to ensure that instructing and purchasing documents are signed by clients
as it helps in following the legislation and regulatory acts. This act of procuring signature makes
sure that the contract between broker and client is valid and binding.
19.
There are various post broking services which are required to be clearly defined and they
are stated below:
 Research and advice
 Relationship management
 Call and trade
 Status of investment
20.
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 For visual or hearing impairment people, broker needs to provide a presentation which
includes both visual and audio information so that people with hearing impairment can
use their visual senses and people with visual impairment can use their hearing sense.
 Clients who have English as their second language must be communicated using a
registered translator which can translate all the information effectively.
 People having cultural differences should be dealt by following the guidelines according
to which broker must not provide any comment regarding their culture which can offend
them (Rosewall, 2012).
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REFERENCES
Books and Journals
Ali, J. and Banks, M., 2014. Into the mainstream: The Australian payday loans industry on the
move. JASSA. (3). p.35.
Awards, I.I., 2011 INSURANCE INDUSTRY AWARDS.
Bowles, M., 2012. NBN in the Enterprise: An investigation into the insurance broking and
printing industries.
Kushwaha, G.S. and Agrawal, S.R., 2014. Customer Satisfaction via Service Quality
Dimensions: An Empirical Research on Stock Broking Services: CS VIA SQD.
International Journal of Customer Relationship Marketing and Management (IJCRMM).
5(3). pp.32-48.
Mathews-Hunt, K., 2016. CookieConsumer: Tracking online behavioural advertising in
Australia. Computer Law & Security Review. 32(1). pp.55-90.
McManus, P., Albrecht, G. and Graham, R., 2011. Constructing thoroughbred breeding
landscapes: Manufactured idylls in the Upper Hunter region of Australia. In Engineering
Earth (pp. 1323-1339). Springer, Dordrecht.
O'Callaghan, K., 2015. Workforce development strategy for the financial services industry.
Rosewall, G., 2012. Changing the field: The future of stockbroking in Australia. InFinance: The
Magazine for Finsia Members. 126(4). p.27.
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