PFMBM - Client Communication, Risk Treatment, and Loan Scenarios

This assignment solution for Principles of Finance and Mortgage Broking Management (PFMBM) addresses critical issues within a legal firm and explores scenarios related to client interactions and loan compliance. It identifies poor communication as the root cause of customer service complaints at Dewey, Cheatum & Howe, proposing stakeholder involvement, strategic communication, and in-person meetings to rectify the problem. The assignment also delves into risk treatment, highlighting key indicators for progress and effectiveness, such as revenue generation and client retention. Furthermore, it analyzes a complex client interaction involving potential red flags, emphasizing the importance of ethical conduct, thorough disclosure, and awareness of client behavior during loan processes. Desklib offers a wealth of similar solved assignments and past papers to aid students in their studies.

Principles of Finance
and Mortgage
Broking Management
(PFMBM)
Student
Assessment Booklet *Bridging
Gap for FNS50320
Answering Assessment Questions
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Distance Education Students

Short Answer Question 1 (Review chapter 1 of learner
material in your portal for PFMBM)
Dewey, Cheatum & Howe is a specialist legal firm that focuses on
residential and commercial property settlements. With over twenty years’
experience they have developed a niche market servicing high net worth
individual. Of their clientele, approximately 46.9 % are individuals they
have been associated with for a minimum of 15 years. Through recent
growth the organisation has brought on more consultants to service the
growing client base. Unfortunately, there has also been an increase in the
number of customer complaints regarding levels of customer service. This
has led to a very costly cycle of staff turnover; new hires are at
approximately 60%. The partners reviewed all complaints, and two points
became apparent. Most complaints were made by long-term clients, and
they were made against the newer team members. These complaints
worsened with the high turnover, which in turn called into question the
sustainability of Dewey, Cheatum & Howe. Through discussion with clients
as well as internal staff, the partners realised that they had failed to
communicate their growth plans to their most loyal clients, who were
incensed that they no longer had access to high level partners. Secondly,
although new recruits were trained into the company culture they were
not introduced to loyal clients in a structured way. This meant that new
recruits were often faced with very aggressive clients wanting to speak to
the manager. Dewey, Cheatum & Howe has decided to hire you as an
expert change consultant.
Activities:
a) Identify the actual issue.
The issue is that they had failed to
communicate their growth plans to their most
loyal clients, who were incensed that they no
longer had access to high level partners.
Secondly, although new recruits were trained
into the company culture they were not
introduced to loyal clients in a structured way.
This meant that new recruits were often faced
with very aggressive clients wanting to speak to
the manager. Therefore there is poor
communication within the company in each

levels they were not looking after and keeping
the relationship with their loyal clients and
causes so much friction and mistrust between
the old loyal clients with the new recruits.
b) To rectify the issue, you will need to involve all relevant managers and manage
this process with them to meet customer services standards. Decide which
stakeholders you need to involve in the process and why.
When there’s poor communication in the
workplace, it can be overwhelming to stay on
top of corporate compliance and other
workplace issues, to rectify the issue I will call a
whole meeting involving every consultant’s
customer service managers including new
recruits because it seems like everyone are
affected because the new recruits were not
trained or introduced to the loyal clients in a
structured way. Have an open communication
discussion of the process with everyone to meet
the customer services standards. Set the right
culture and the right flow of communication.
Most projects will have numerous stakeholders
and not necessarily just the most easily
recognizable. We need to involve some
stakeholders such as some good Developers,
Agents/ Valuers, landowners, banks/lenders.
They need to involve long-term clients Keep
brainstorming for other quiet, but important
stakeholders.

c) Develop a strategy to deal with the issue
Identify the stakeholder’s preferred method of
communication. By using the most effective
manner of communication you will help ensure
the stakeholder remains content. Keep
stakeholders engaged throughout the process
with timely updates. Ask the right questions, of
the right people, at the beginning and
throughout the project. Accurately map
expectations. Be crystal clear on the
expectations from the stakeholder’s point of
view. Ask them how they will measure success
of the project. Inevitably you will discover
conflicting definitions of success. Some will
consider meeting the final deadline their
number one priority. Another might consider
end user functionality of the final product as
most important. How do manage these
conflicts? Understand who requires hand
holding and insists on receiving all details
d) Develop a communication plan, clearly identifying the key message(s) and
the target audience
Communication plan enumerates an evaluation
of all stakeholders, firm had answered and the
process of things that should be taken into
consideration which such discussion. Target
audience are the potential clients of firm. And,

key message will be “We are glad to discuss
with our committed clients about plan for
growth of the firm for forthcoming time period
and want that our new co-workers must
introduce with customers for maintaining good
relationship with customers.
e) Identify the way you would communicate the message and explain why
The optimal way to communicate key message
is through organising an in-person meeting of
all potential and loyal clients, because this
technique can clearly deliver the growth plans
to customers and also helps in introducing new
employees with clients. It will provide support to
firm in delivering the plans to clients along with
ensuring that they all become a significant part
of firm.
Short Answer Question 2 (Please review Chapter 2
PFMBM learner manual and specifically the section on
“Risk Treatment”)
What are the key indicators that will demonstrate the progress of
implementation and ultimately the effectiveness of the treatment
option?
Major indicators that provide help in defining
the progress of implementing the plan in
organised way that would clarify coordination
among impacts of projects results and helpful in
identifying the issues that are associated with
manner that can stop through accomplishing

project's objectives. Indicators that measures
performance could be revenue generated,
growth of business, client retention rate and
customer satisfaction.

Short Answer Question 3
You are contacted by a new client who has found your details on Google.
English is not her first language and she does not seem to be
comprehending your “financial” language over the phone in regards to
some options for securing a loan for a car she wishes to purchase. You
organise for her to meet you the next day at your office, so that you can
talk through the various options and her eligibility for a loan.
When she arrives at your office, you notice that she is dressed very well
and seems to have a number of large diamonds on her bracelet and
fingers. You assume that she is going to be eligible to borrow a large
amount for the Porche 911 Turbo S she has mentioned she would like to
buy. You find out the car is valued at just over $473,000 and you start
taking down your new clients details about her employment status and
earning capacity, to make sure she is eligible to take on such a large loan.
You discover that both her and her husband are joint Directors in their
diamond cutting tool business and they travel overseas a lot. You start the
process of explaining your qualifications and your role as a Mortgage and
Finance Broker and she asks you what the FBAA and MFAA membership
certificates you have on your wall are all about. You explain what they are
and what the associations mean, and she seems impressed that you are
part of their associations.
You discuss some of the fees and loan products available to her and you
take down her contact details and email address. You notice when you
start explaining the fees and products information, she seems to be
talking very quickly over you and is not really listening to the information
you are giving her. She starts to become quite agitated that you are not
getting the paperwork for the loan organised as quickly as she would l
like, as she wants to purchase the car the next day and mentions that she
has another finance broker she is thinking of going through instead of you
because she states, “you are wasting my time, I don’t care about this
information, I just want a car loan!”
You don’t want to lose the sale because you have been quiet in the last
month and you think about skimming over some of the credit guide
information because you don’t think she will be able to understand what it
all means and you place the disclosure documents on the desk next to her
and decide not to go over those documents in detail just yet.
You start to put together some options of loan products to show her but
you have a sense something is not quite right with her behaviour, as she
is agitated and her eye pupils appear to be dilated. You explain that you
need to grab a file so you can organise the loan information for her and as
she’s making you feel annoyed by her behaviour, you tell her that she
needs to read the disclosure documents on the desk, and you feel that
this way you don’t have to waste more time explaining them to her.
You then leave the room to get some paperwork to get the loan

application started.
When you return to the room, she states she is in a hurry and will take the
disclosure documents home to read and then storms out without them.
After she leaves, you decide to do a company search on the business
details she gave you for her company and soon discover that her business
has been made insolvent and there is a media release in the ASIC
platform about the company owing 10 million dollars to various companies
and drug trafficking charges being laid against her and her husband, who
are listed both as directors of the company.
You decide to call her to let her know that you were commencing some of
the steps to begin the loan process and in doing this, you have discovered
her business is insolvent, so she will not be able to secure a loan at this
time. Before you can say anything further to her, she hangs up on you.
The next day, you notice there is a nasty Google review about the
company you work for, and she specifically mentions you by name and
states you were not helpful and seemed impatient with her and that you
didn’t explain all the loan information to her or give her any disclosure
documents and she doesn’t recommend your services.
Activities:
(a) Do you respond on the Google review platform to her comments so you can argue
your side of the story?
I believe you have to protect the reputation of
your company, but not in harsh way, there is a
step to follow if you have multiple locations. –
1)Click on the correct location (if you have
multiple locations).
Click on the menu and select “Reviews.”
Click “Reply.” Keep Your Responses Crisp and
Positively Worded. Mentioned how you tried to
explain everything to her unfortunately she did
not able to finish the meeting and she walked
out.
Once you've written your response, click “Post
reply
(b) How could you have dealt with her differently in the interview and what should
you have done about her leaving the disclosure documents behind after your

appointment? Please note: you will need to read the supporting document called
‘Responsible lending disclosure obligations’ to assist with answering the question.
I should have making reasonable inquiries about
a consumer’s financial situation, and their
requirements and objectives
taking reasonable steps to verify a consumer’s
financial situation
making a preliminary assessment (if you are
providing credit assistance) or final assessment
(if you are the credit provider) about whether
the credit contract is 'not unsuitable' for the
consumer
if a consumer requests it, being able to provide
the consumer with a written copy of the
preliminary assessment or final assessment (as
relevant).
(c) Name 5 of the Code of Ethics guidelines, as members of the FBAA.
 acting in the best interests of clients
 avoiding conflicts of interest
 ensuring that clients give informed consent
and understand the advice they receive
 ensuring that clients clearly agree to the
fees they will pay
 maintaining a high level of knowledge and

skills.
Short Answer Question 4
Psychologists have identified over a dozen types of biases, and some or all
of them may cloud the judgment of an investor/buyer.
These are some of the common Biases noted for investors:
 Representative bias can lead to snap judgments on questions based
on apparent similarities to earlier issues.
 Cognitive dissonance can lead to an avoidance of uncomfortable
information that contradicts one's convictions.
 Home country bias and familiarity bias can lead to avoidance of
anything outside an individual’s comfort zone.
 Mood bias, optimism (or pessimism) bias, and overconfidence bias
may all add a note of irrationality and or emotion to the decision-
making process.
 The endowment effect may cause people to over-value things they
own simply because they own them.
 Status quo bias definition is the resistance to change.
 Reference point bias and anchoring bias are tendencies to
sometimes value one thing in comparison to another thing, rather
than viewing them as independent things.
 The law of small numbers is the reliance on incompatible sample
size to be able to make an appropriate decision.
 Mental accounting is explained as an irrational attitude or behaviour
towards spending and or valuing money.
 The disposition effect is the tendency to for an individual to sell
investments that seem to be doing well but to hold onto
investments that are doing poorly.
 Attachment bias is the blurring of one’s judgment when one's own
interests or a person closely related to that person's interests are
involved.
 Changing risk preference is considered to be the “gambler's
disease”. A small risk, no matter what the outcome is, creates a
willingness to take on greater and greater risks.
 Media bias and Internet information bias represent uncritical
acceptance of widely reported mainstream media (MSM) opinions
and or assumptions.

Activity 4: Using the above information regarding purchase bias,
reference at least 4 from the above Biases and with each of these
statements, describe an example for each one to illustrate your
understanding of the statements provided?
.
1)Representative bias can lead to snap judgments on
questions based on apparent similarities to earlier issues
 Representative bias is when a decision
maker wrongly compares two situations
because of a perceived similarity, or,
conversely, when he or she evaluates an
event without comparing it to similar
situations.
2) Home country bias and familiarity bias can lead to
avoidance of anything outside an individual’s comfort zone.
 Home country bias refers to investors'
tendency to favour companies from their
own country over those from other
countries or regions. The tendency to
invest in our own backyard is not unusual
or surprising; it is a worldwide
phenomenon, and certainly not unique to
U.S. investors.
3) Status quo bias definition is the resistance to change
 The status quo bias is one type of

cognitive bias that involves people
preferring that things stay as they are or
that the current state of affairs remains
the same. This bias can have an effect on
human behaviour, but it is also a topic of
interest in other fields, including
sociology, politics, and economics.
4) Mental accounting is explained as an irrational attitude or
behaviour towards spending and or valuing money
 Mental accounting is a behavioural
economics concept that states that
humans place different values on money,
which leads to irrational decision making.
it contends that individuals classify funds
differently and therefore are prone to
irrational decision-making in their
spending and investment behaviour.