FNS40811 Certificate IV in Finance and Mortgage Broking Assessment

This document presents a completed assessment task for the Certificate IV in Finance and Mortgage Broking (FNS40811). The assignment focuses on identifying and interpreting compliance requirements within the finance industry, particularly for mortgage brokers. It covers key aspects such as the NCCP Act, responsible lending obligations (including the unsuitability test), credit guides, and the roles of regulatory bodies like APRA. The assessment requires the student to demonstrate understanding of compliance requirements, relevant legislation, and the importance of staying up-to-date with industry changes. The task also explores how organizations monitor compliance and the implications of non-compliance for both brokers and clients. The document offers insights into various compliance-related topics, including codes of conduct, training registers, and the impact of APRA's policies on bank lending for investment properties. It provides detailed answers to the assessment questions, covering topics such as client requirements, compliance monitoring, and the relevant legislation.

Certificate IV in Finance and Mortgage Broking
Assessment Task
Your details:
Name:
Your assessment task
You are required to 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 for a second marking. Assignments
will not be returned to you as they need to be retained for by us for verification and audit purposes.
Tas
k
Assessments Total
Mark
Pass
Mar
k
Actual
Mark
1 Identify and Interpret Compliance Requirements 27 19
2 Deliver and Monitor a Service to Customers 39 27
3 Contribute to OHS Hazard Identification & Risk Assessment 41 29
4 Manage Personal Work Priorities and Professional Development 24 17
5 Develop and Nurture Relationships with Clients, Other Professionals
and Third Party Referrers
17 12
6 Promoting the Effective Use of Credit 15 10
7 Prepare a Loan Application on Behalf of Mortgage Broking Clients 64 45
8 Steps Taken by the Credit Provider 23 16
Total 250 175

Assessor’s Initials: ____________________
Assessment Date: ____________________

Introduction
Objective The objective of this Assessment Task is to demonstrate that you have the
skills and knowledge required to conduct a client relationship and comply
with statutory, industry and organization compliance requirements.
Elements to be
assessed
To achieve this objective, you will need to demonstrate your ability to:
The assessment tasks in this assessment will allow you to demonstrate your
knowledge and skills in relation to these elements.
Assessment process Start by:
1. Reading the Assessment Task.
2. Type your answers to the assessment tasks into this template
document (hand-written answers are not accepted)
3. Submit your completed document by uploading it on the ‘Ready for
Assessment’ area of www.CPDplus.com
Don’t forget to keep a copy and retain it for 12 months.
Need help? If you have any questions or would like to request a digital copy of this
assessment task, please email the Mentor Support Team at
Statement of
Completion
Upon successful completion of this assessment you will be awarded the
Statement of Completion for FNS40811 Certificate 4 in Finance and
Mortgage Broking.

Task 1: Identify and Interpret Compliance Requirements
1. Identify
compliance
requirements
Mortgage brokers face important compliance requirements, the foremost
among them being the reasonable lending provisions of the NCCP Act. The
penalties for non-compliance include loss of license (for businesses) and
removal from the industry (for individuals). If fraud is involved there may also
be the criminal penalties of fines and / or imprisonment.
Compliance requirements are not static. It is therefore important to stay up to
date with them.
Mortgage brokers also need to keep up-to-date with the actions of the
regulatory authorities such as APRA and the Reserve Bank. Their actions may
not amount to direct regulation, but through their effects on interest rates and
bank lending these authorities can have a very direct impact on the business
mortgage brokers are able to do.
(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What must a
mortgage broker do to comply with the unsuitability test?
No Mark
1. The mortgage broker must ensure that reasonable enquiry has been made about the
requirements and objectives of the borrower.
/1
2. The financial position of borrower must be enquired. /1
3. Verification process of the financial position of the borrower must be made. /1
(b) List the sorts of items a client’s requirements and objectives could include (as indicated by
ASIC).
Mark
The items which client’s requirements and objectives include as per the ASIC are as
follows:
1. The amount of credit required by the borrower
2. Time limit or the loan period.
3. Purpose or objective of the borrower for seeking such loan amount.
/2
(c) Leading credit providers and other financial organizations have code of ethics, sometime called
codes of conduct. Select one of them and summarize it by itemizing its main principles.
Mark
The credit providers and other financial organisations for rendering its credit as well as
financial services has to ensure proper compliance of various code of conducts, ethics,
norms as applicable on it. One of the code is Code to Combat over indebtedness.
This code of conduct focuses on the compliance of provisions related to the minimising or
preventing conditions of over indebtedness or financial distress caused. This code of
/4

conduct provides relief and safeguarding measures in respect of financial difficulties, loss or
risk to the consumers who are seeking services from this credit and financial organisation.
Sub-total /9
Continued
(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit
Guide.
Mark
The credit guide should contain following key information as per the NCCP Act:
1. Name and contact details of Licensee
2. Australian credit license number of Licensee
3. Details and methods for working out any amount of fees payable to the
Licensee by the consumer
4. Details of top 6 lenders which has been introduced to consumers by the
Licensee and Credit Rep
5. Commission which an individual is likely to receive
6. IDRS and EDRS details of the Licensee
7. The Credit Rep's CR number and contact details.
8. Name of CR's top 6 licensees
9. Information related to the CR's IDRS.
/3
(e) It is important to keep up to date with compliance requirements so that the required changes
can be made to organization procedures and product offerings. Suggest three sources that you
can use.
Mark
1) Professional associations such as The Mortgage and Finance Association of
Australia and The Finance Brokers Association of Australia inform their
members of changes to requirements before they happen.
2) The professional associations code of practice can also be used as a sound
guidance for compliance requirements.
3) Large mortgage broking business organisations have compliance officers
assisting practitioners to meet compliance standards.
/3
(f) Explain the requirement for Australian Credit Licensees to keep a training register.
Mark
As per the requirement for Australian Credit Licensees to keep a training register, it
helps the business organisation in tracking the record of training which has been
imparted to the employees by maintaining the training register. The training of
employees is considered as one of the obligations on credit licensees.
/2

(g) Explain APRA’s current attitude towards bank lending for investment properties.
Mark
The Australian Prudential Regulation Authority has introduced restrictions which has
created impact on the bank lending for investment purposes. The banks attitude to the
APRA changes includes
1. changing in the serviceability requirements for the investor loans.
2. Creating difficultly for investors in seeking financial assistance.
3. The borrowing capacity has been downsized, charges high interest rates and
repayments of existing debt are assessed at higher rate.
/2
Sub-total /
10
Continued
Task 1: Identify and Interpret Compliance Requirements Continued
1.2
Interpret,
analyse
and
prioritise
identified
complian
ce
requirem
ents
Some of the compliance requirements are difficult to meet. Unfortunately, also there
have been some ‘rogue’ mortgage brokers who have failed to comply – to the
disadvantage of their clients.
The finance planning industry has been plagued by non-compliance in the largest
planning groups, with the image of the industry being substantially tarnished as a
result. It may not suffer greatly because of the absence of an alternative source of
financial advice.
This is not so with mortgage brokers. They are just establishing their reputation and
consumers always have alternative of going to the lenders directly.
(a) Select three tasks you perform on a regular basis that are subject to compliance requirements.
No Mark
1. Finding lender institution. /1
2. Completing the loan application. /1
3. Submission of the loan application to the bank & getting approval of it. /1
(b) Identify the compliance requirements that are relevant to the three tasks selected, indicating the
name of the relevant legislation, regulation or code of conduct.
No
1. Australian Consumer Law /1
2. ASIC /1
3. The National Consumer Credit Protection Act 2009 /1

(c) How does your organisation monitor your compliance?
Mark
The business organisation should always ensures the compliance of its applicable rules and
regulations in the following manner:
1. By monitoring the pre activity approvals lists or transaction checklist with capturing
of data or relevant information. For effective monitoring of business operations'
compliance, company should gather or collect data and evaluates the factors which
is leading to non compliance.
2. Company should have a proper and effective internal control system which can
rapidly provide solutions and remedies to those risk or issues which have been
identified related to the breach of laws or leading to non compliance of rules and
regulations.
3. Company should make sound and effective plan and strategies to monitor and
evaluate whether the company is complying with its applicable norms or not.
/2
Sub-total /8
Total /27
Task 2: Deliver and Monitor a Service to Customers
2.
Identify
customer
needs
The relationship with a client is generally described as beginning with the
establishment of empathy. In other words, it is first necessary for a mortgage broker
to establish that he / she is truly interested in the client and the client’s needs. It is
only after that that the mortgage broker has established the right to interview a
client.
(a) Use the internet or any other source to find a definition of empathy.
Mark
The word Empathy basically means the ability or skill of understanding, identifying as
well as sharing the feelings of another. Empathy is considered as the ability of sensing or
determining the emotions and feelings of the other people. This process is coupled with
the ability to imagine what other might be thinking or feeling. Thus, empathy is the
capacity to understand, determine or feel what another person is experiencing from a
given frame of reference by placing oneself into the another position. The types of
empathy include cognitive empathy, emotional empathy and somatic empathy.
/1
(b) List three open-ended questions that assist in developing empathy with a client? How do such
questions indicate empathy?
No. Mark
1. How do you deal or overcome with the negative emotions arising?
2. Where do you experience more positivity or feel most present ? And what
other understands about you ?
3. What things in other motivates or encourages you the most ?
/2

The above questionnaire is designed in the open ended form so as to encourage the
full as well as meaningful answer by making use of the own knowledge related to
the subject matter and feelings.
/1
(c) List and explain the steps involved in an ‘active listening approach’.
Mark
A Good listener is a person who is interested in the listening about what is going in
the lives of other people, their hobbies or any other life related activities to them.
The attention of person goes there who says or do something in an attentive
manner.
1
The steps involved in an active listening approach are as follows:
1. Hearing - At this stage listener always pays attention by making eye contact to
make sure proper hearing of the words being said by other.
2. Interpretation – What words has been heard, always make sure correct and
relevant interpretation is done so as to ensure that there is no misunderstanding or
confusion related to basic meanings.
/1
3. Evaluation – After making interpretation, the evaluation has to be made by deciding
what to do with the available information and data on receiving it.
4. Respond - The final stage of listening is to give either a verbal or visual response to the
speaker so as to confirm that information has been understood which has been said by
them.
/1
(d) How is client service commonly monitored in your organisation? What are the two possible
outcomes?
No
.
Mark
1. The client service in a business organisation can be monitored with the help of
following mechanisms:
By capturing customer feedback channels and scheduling meetings on weekly basis
with the customer service staff.
/1
2. BY conducting such process, company is able to assess its service quality and
demand for its product among customer and in the market as well. It will help
company in measuring its performance as well as profitability level and measures it
any, to required to be taken for improving the business operations. This will help in
framing budget and different business strategies and plans which will work towards
attainment of organizational goals and objectives.
/2
Sub-total /10
Continued
Task 2: Deliver and Monitor a Service to Customers Continued

2.1
Deliver a
service to
customer
s
In a survey on the reasons for referrals conducted by David Maister, only 10%
were due to the quality of technical work. The remaining 90% of referrals were due
to the quality of service.
This indicates that the key to maintaining client relationships and gaining referrals
is the provision of outstanding service. This has been described by Maister as
‘over-servicing’.
(a) Describe three ways in which a mortgage broking organisation can attempt to ‘overservice’
clients?
No. Mark
1. Asking the clients for more often time an on the situation of scope creep, the cost
of project is required to be renegotiated.
/1
2. Investing in the business tools and automation like job management solutions,
benchmarks etc. which will help in tracking and monitoring the results.
/1
3. On opportunity showcasing work efforts, then it is better to invest time by
entering into the industry awards.
/1
(b) How would you keep a client informed about the progress of an application as it passed through
a creditor provider’s hands? What approximate timing might be involved?
No. Mark
1. After submission of the Loan application to lender, the mortgage broker is once
again involved for ensuring the product being offered by the lender is complying
with all the requirements of the clients. Mortgage brokers should have contact
with the client and are responsible for breaches of lending provisions of the
NCCP Act.
Mortgage broker is also required to prepare the client or borrowers with the
contract so that they can understand their obligations relating to repayments and
conditions of late repayment, redraw facilities and all late fees and brokerage that
will be applied.
/2
2. The time period between client assessment and forwarding of the loan application
to the credit provider should not be longer than two days. It is important that the
information should be passed on to the credit provider in a timely manner.
/2
(c) Describe how you might attempt to resolve conflicts with clients.
Mark
Conflicts with clients is one of the factor which can leads to deterioration of the business
operations. The first most step in resolving conflict is to ascertain or having a deep
knowledge of the basic reason of conflict taking place. Once the reason is determined,
measures related to how to handle and resolve conflict are
made. This measures helps business organisation in making an ideal place for client to
work with. By having sound business strategies and plans related to conflict reduction
/2

will produce greater satisfaction among clients and employees. It will also lead to
improvement in performance and increase in profitability level.
(d) How do you can prepare clients for the hiccups that can happen while their credit application is
being processed.
Mark
Clients can be prepared by providing details of interim updates. Do not ask the borrower
to provide unnecessary information which is not strictly relevant or which the lender
already has in its possession.
/2
Sub-total /11
Continued
(e) The chapter on Operating a Mortgage Broking Business contains an example suggesting that a
mortgage broker acting in the best interests of clients should act as a Protector rather than an
Expert. What are the implications for this in regard to (i) advice given to clients and (ii)
recommending the most suitable loan products?.
No. Mark
1. New products can be introduced from time to time, changes in the existing
products features can be made. Mortgage brokers should be aware of information
regarding change from product providers with information being shared by
conducting team meetings, seminars etc.
/2
2. The mortgage brokers should also be prepared to discuss the different products
with their clients and point out their different features so that an informed choice
can be made.
/2
(f) How could you prepare yourself to deal with client concerns?
Mark
For dealing with the concern or issues of client, one should adopt following ways for
overcoming these issues and making client satisfied:
1. Understanding the scope of client project and defining the time frames for
completion of such projects.
2. Meeting clients expectations by rendering of quality services as per the budgeted
amount and resources.
3. Making clear about the cost associated with the project and its schedule and
deciding the time period for making payment.
4. Assessing the problem which is causing the project conflicts and hampering the
interest of client. After making assessment of the problem, professional response in
form of clear and proper course of action should be given for overcoming such
/2

problem and making client satisfied.
(g) Give examples of the following legal breaches: breach of the duty of care, false and misleading
conduct, unconscionable conduct & conflict of interest without disclosure.
No. Mark
1. Breach of duty of care example - THE COMMONWEALTH v. VERWAYEN.
In this case, where the Commonwealth had been in breach of its duty of
care as a result the ship sunk due to negligence. The Commonwealth was
liable for the accident.
/1
2. Breach of duty of false and misleading conduct - In Barnes v Forty Two
International Pty Ltd. In this case, the respondents claim for the false, misleading
and deceptive conduct which was based solely on the fact that the appellants had
made two specific false representations.
/1
3. Breach of duty of unconscionable conduct - Harsh Loan Contract
In the James v. National Financial, LLC, C.A. case, a woman was given the loan
with the interest of 800%. She sued the lender on the grounds that the loan contract
was unconscionable. In its 2016 ruling, the Delaware Court of Chancery assessed
that the loan contract was null and void because it was unconscionable.
/1
4. Breach of duty of conflict of interest without disclosure - In Duke Group Ltd v
Pilmer, the Full Court of the South Australian Supreme Court has attempted to
identify in analogous situations the recurring underlying features of fiduciary
relationships. Among all the issues, one of the issue in the case was whether a firm
of chartered accountants owed fiduciary obligations against their client in some
dealings that the parties had.
/1
(h) Once a desirable market segment has been identified, a mortgage broking business can put its
mind on developing suitable marketing strategies. List examples of different strategies that
might be used.
Mark
Some of the marketing strategies that can help a mortgage broking business are as follows:
1. Make use of social media platform, as it provides the opportunity to connect with
new potential clients. It is a great way to show knowledge as a mortgage broker,
building brand awareness, answer client questions etc.
2. By making mortgage broker services different from other will increase
mortgage broker sales. One way to grab positive attention towards business and
attract new clients is to get referrals.
3. Creating personalised mortgage broker campaigns for each clients will helps in
building clients loyalty and engagement. By using marketing automation, emails
automatically go to each client as per their own needs and preferences this saves
time.
/2

Sub-total /12
Continued
(i) What steps can be taken to keep up to date with product changes and ensure that this knowledge
is properly disseminated?
Mark
Company should make proper business strategies and plans related to the promotion and
advertisement of their newly launched products ad services in the market so as to grab the
attention of its customers towards it. Company should indulge itself in publicity campaign,
hoardings, make use of social media platforms, advertisement in newspaper, articles
related to changes made in product. With the helps of this, customers will be aware about
changes made I products. Also, company should focus on the labelling, designing and
packaging process of its product as this helps in seeking more customer attraction.
/2
(j) What are the procedures for dealing with client complaints in your organisation?
Mark
Every company or business organization should pay attention towards the customer needs
and preferences for making them satisfied. As customer or clients are considered as one of
the most important key for business success. Resolving clients problems timely will help in
customer retention with the company. The procedures for dealing with clients complaints in
business organization are as follows:
1. Listen and understand compliant or grievance by inviting it - Always listen to
the customer or client by taking time and understanding their concern as they are
concerned about services.
2. Empathize – After listening empathize with client position so as to create bond &
let them know that their concern & issue are going to resolve soon.
3. Offer a solution – Solution as per the client issues and complaints is drive
accordingly in a very cost effective manner and timely
4. Execution of Solution and Follow up – Once the solution is made to their problem
as per their need, execute t for checking accuracy. After executing timely follow up
should be taken to assess any error face.
/2
(k) What normal protocols should for protecting the confidentiality of client files?
Mark
The protocol used by company for protecting the confidentiality of client files are as
follows:
1. Document Security – Because of technological advancements document security
has becomes big issue nowadays. Technology has come up with some benefits and
drawbacks as well. Keeping clients’ files in safe cabinet, making use of the
shredding machine etc helps in document security.
2. Data Security - Client’s data is at risk during normal business time especially when
/2