Broking Options for Clients with Complex 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
1