Kaplan Diploma of Finance and Mortgage Broking Management Assignment

This assignment is for the Diploma of Finance and Mortgage Broking Management course, focusing on complex lending, broking, and business management skills. The assignment is divided into two sections. Section 1 requires answering questions based on case studies related to different lending scenarios. Section 2 involves completing tasks related to business management skills. The assignment includes details about Capital City Finance and Mortgage Brokers (CCF & MB), its services, partners, and team members, along with instructions for completion, submission, and grading. The goal is to apply knowledge of financial principles and demonstrate competence in broking and business management practices, with a focus on strategic alliances and business expansion.

Finance and Mortgage Broking Management
(DIPMB_AS_v1A3)
Please complete the fields shaded grey.
result (assessor to complete)
Parts that must be resubmitted:
Result — resubmission (if applicable)

Result summary (assessor to complete)
First submission Resubmission (if required)
Section 1 Task 1 Demonstrated Demonstrated
Task 2 Demonstrated Demonstrated
Task 3 Demonstrated Demonstrated
Section 2
Task 4 Demonstrated Demonstrated
Task 5 Demonstrated Demonstrated
Task 6 Demonstrated Demonstrated
Task 7 Demonstrated Demonstrated
Task 8 Demonstrated Demonstrated
Task 9 Demonstrated Demonstrated
Feedback (assessor to complete)
[insert assessor feedback]
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Before you begin
Read everything in this document before you start your projectforDiploma of Finance and Mortgage
Broking Management.
About this document
This document includes the following parts:
• Instructions for completing and submitting this assignment
• Results and feedback
• Section 1: Complex lending and broking
• Section 2: Business management skills
Instructions for completing and submitting this assignment
How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete
the projectwithin your enrolment period. Your study plan is in the KapLearnDiploma of Finance and
Mortgage Broking Management subject room.
Completing the assignment
The assignment
This projectis split over 2 sections. The information and data you need to complete Sections 1 & 2 is
presented in case studies at the beginning of those sections and each task.
Section 1: Complex Lending and Broking
The first section on complex lending and broking, requires you to answer the questions for one (1) of the
three (3) available case studies. Each case study focuses on different lending scenario, (see diagram below).
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Section 2: Business management skills
Section 2 requires you to complete the six (6) tasks as listed in this template.
SECTION 1 SECTION 2
3 questions 6 questions
Choose
one path PLUS
Case Study A
Case Study B
Case Study C
Investment Property Finance
Commercial Equipment Finance
Commercial Premises Finance
OR
OR
Task 4–9
Business
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the
suggested word count. Please do not include additional information which is outside the scope of the
question.
Additional research
When completing this assignment, assumptions are permitted although they must not be in conflict with
the information provided in the Case Studies.
You may also be required to source additional information from other organisations in the finance industry
to find the right products or services to meet your client’s requirements, or to calculate any service fees
that may be applicable.
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work
regularly.
• Use the template provided, as other formats will not be accepted for these assignments.
• Name your file as follows: Clienttnumber_SubjectCode_Submissionnumber
(e.g. 12345678_DFP1B_Submission1).
• Include your clientt ID on the first page of the assignment.
Before you submit your work, please do a spell check and proofread your work to ensure that everything is
clear and unambiguous.
Do not delete/remove any sections of the document template.
Do not save your completed projectas a PDF.
The projectmust be completed before submitting it to Kaplan Professional Education.
Incomplete assignments will be returned to you unmarked.
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The maximum file size is 5MB. Once you submit your projectfor marking you will be unable to make any
further changes to it.
You are able to submit your projectearlier than the deadline if you are confident you have completed all
parts and have prepared a quality submission.
The projectmarking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
Should your projectbe deemed ‘not yet competent’ you will be give an additional four (4) weeks to
resubmit your assignment.
Your assessor will mark your projectand return it to you in the Diploma of Finance and Mortgage Broking
Management subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in
your assignment. Failure to do so will mean that your projectwill not be accepted for marking;
therefore you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission
deadline to submit your completed assignment.
How your projectis graded
Projecttasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or
skills for each subject. As a result, you will be graded as either competent or not yet competent.
Your assessor will follow the below process when marking your assignment:
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you
have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall
competence.
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‘Not yet competent’ and resubmissions
Should sections of your projectbe marked as ‘not yet competent’ you will be given an additional
opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need amend those sections
where the assessor has determined you are ‘not yet competent’.
Make changes to your original submission. Use a different text colour for your resubmission. Your assessor
will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first
assessor’s comments in your assignment, so your second assessor can see the instructions that were
originally provided for you. Do not change any comments made by a Kaplan assessor.
We are here to help
If you have any questions about this projectyou can post your query at the ‘Ask your Tutor’ forum in your
subject room. You can expect an answer within 24 hours of your posting from one of our technical advisers
or clientt support staff.
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Capital City Finance and Mortgage Brokers (CCF & MB)
George and Mildred are very happy with the way you service your clients and are sure that you are a good
fit for the team. They now want you to turn your focus to your primary task which is to assist in expanding
the business by building relationships with selected real estate agents, accountants and legal firms through
strategic alliances. They also want you to consider how CCF & MB can consolidate its relationships with its
existing strategic partners.
Let’s recap on what you already know about Capital City Finance and Mortgage Brokers (CCF & MB).
It’s a family owned business providing a range of mortgage and finance broking services to the business and
private sectors, with experience in all facets of finance and insurance providing expert advice covering a
multitude of products and options existing within the market.
CCF & MB specialises in home loans, commercial lending, business lending, personal and motor vehicle
finance and insurance (life and general), and focuses on helping clients find the finance service suited to
their individual circumstances.
It provides its services through its association with the following partners:
• Australian Aggregators, a rising business in the aggregation business with an extensive panel of
residential and commercial lenders, and asset finance.
• ABC General Insurance, a boutique insurance company specialising in a full range of general insurances.
• XYZ Life a small family-owned insurance brokerage specialising in the full range of life insurance
products.
Based in the city, CCF & MB has the capacity to service clients from their office or anywhere at their clients’
convenience through its team of mobile brokers.
CCF & MB does not hold a credit license but operates as a credit representative of Australian Aggregators.
Since its inception 13 years ago CCF & MB has built a loan book of almost $1.2 billion and averages over
$120 million in new loans annually.
CCF &MB’s vision is to be the mortgage and finance broker of choice in the greater metropolitan area
CCF & MB’s mission statement is to operate professionally in accordance with legislation, our licence and
professional standards
CCF & MB’s values are as follows:
• to act with honesty and integrity at all times
• to provide unbiased advice and conduct business, free from any conflict of interest
• to maintain confidentiality in all dealings
• to meet all NCCP regulatory requirements
• to comply with all mortgage industry laws and regulations
• ensure quality and efficiency in its loan processes.
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CCF & MB’s people
CCF & MB is owned by husband and wife, George and Mildred Spencer.
With over 35 years’ experience in finance and business ownership, George established and built a
successful business dedicated to assisting clients with managing their finances effectively. Starting the
business with his wife Mildred 13 years ago, George gained immense satisfaction in seeing it expand to
service more and more clients across the city and greater metropolitan area. Although in recent years he
has stepped back from dealing directly with clients, he still maintains a small select clientele. He also takes
great pride in training and mentoring his team to enhance their performance.
Mildred has over 22 years of lending experience and is qualified not only to assist her clients with their
mortgage requirements but also to assist them with their commercial finance requirements. She also holds
financial planning qualifications. She specialises in asset finance.
The company has a small team of five additional consultants and two administration staff members.
Profiles for the team is as follows:
• Jennifer Dee is recognised as one of the top female brokers in Australia. She has been in the broking
industry for over 10 years and has a passion and dedication to assist and accommodate all of her clients’
needs with their financial dreams. Jennifer is an Accredited Mortgage Consultant with the Mortgage and
Finance Association of Australia (MFAA).
• Louise Spencer (George and Mildred’s eldest daughter) is an Accredited Mortgage Consultant with the
Mortgage and Finance Association of Australia (MFAA) and has been working as a loan consultant for
almost two years. Louise started off in the lending industry in the office as an administrator to gain as
much experience and knowledge as possible before taking a broking role. Her passion for helping her
clients ensures that she is always available to her clients at a time and place convenient for them.
• Michael Spencer is George’s younger brother and is CCF & MB’s equipment finance specialist. He has
over 25 years working in the equipment finance industry. He has developed an in depth understanding
of the transport and agricultural industries, and also provides finance for general equipment,
motor vehicles and computer equipment.
• Martin Long has specialised in equipment finance for the last three years, but prior to this he spent
five years operating his own retail food business. This practical experience allows him to see things from
his client’s point of view, including experience with equipment finance. He specialises in plant and
equipment in the machinery, woodworking and packaging industries. Examples of some of the
equipment he has financed are farm machinery, extrusion lines, plastic injection moulders,
commercial catering equipment, woodworking plant, packaging lines, forklifts, office fit-outs and many
different motor vehicles.
• Luis Ramirez migrated to Australia in 25 years ago as a young boy with his family. After completing
high school he graduated from university with an accounting degree and worked in ANZ in commercial
lending. He joined CCF & MB 4 years ago and specialises in vehicle and capital equipment financing.
He provides ITC and general equipment lease funding options for clients. By providing better outcomes,
both during and at the end of their equipment leases, Luis’ many clients have been able to reduce costs
and maximise the value of their available budgets.
CCF & MB is a member of the MFAA as a broking business dealing directly with the public. Both George and
Mildred are fellows of the MFAA. CCF & MB is also a corporate member of the FBAA.
All staff members, including consultants, are paid an annual salary plus superannuation. Consultants also
receive a car allowance plus a percentage of trail commissions that are paid quarterly based on their
performance targets.
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CCF & MB’s panelled lenders
With access to an extensive panel of lenders, CCF & MB can meet most clients’ expectations.
Residential lenders are listed in the following table.
Adelaide Bank Homeloans Limited Pepper Home Loans
AMP Homeside Phoenix-Circle Credit Union
ANZ ING Direct PLAN Lending
Australian Financial Keystart PN Bank
Australian First Mortgage La Trobe Resi
Bank of Melbourne Liberty Financial St George Bank
BankSA Macquarie Suncorp
Bankwest ME Bank The Rock Building Society
Bluestone Mortgage Mart Westpac
Citibank NAB Wide Bay Australia Ltd
Commonwealth Bank Newcastle Permanent
Heritage Bank Peoples Choice Credit Union
Commercial lenders and asset finance providers are listed in the following table.
Adelaide Bank Commercial Bibby Financial Services Pty Ltd Liberty Financial Commercial
ANZ Commercial Commonwealth Bank Commercial NAB Commercial
Australian First Mortgage Commercial IMB Commercial St George Commercial
Bank SA Commercial ING Direct Commercial Suncorp Commercial
Bankwest Business Banking LaTrobe Commercial Westpac Commercial
Adelaide Bank Commercial Macquarie Leasing Westpac Equipment Finance
ANZ Asset Finance Commonwealth Bank Asset Finance Liberty Asset Finance
Future developments
George and Mildred are very keen to expand and grow their business and are in the process of speaking
with a number of real estate agents, accountants and legal firms with a view to forming strategic alliances.
Due to the expected increase in business George and Mildred are seeking to employ another consultant to
take on the extra work. This person will be required to:
• build strategic relationships with a number of real estate agents, accountants and legal firms already
identified
• identify and foster relationships with other real estate agents, accountants and legal firms
• provide finance and mortgage broking services to new clients identified through these strategic
alliances.
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Section 1: Complex lending and broking
Only complete Tasks 1–3 for one (1) of the case studies in Section 1
Case study A — Tom and Steve Broad
Background
Congratulations, you have just been appointed by George and Mildred as the new consultant to handle the
extra work. Whilst your major focus is to build the strategic relationships you are also expected to build
your own client base using your own connections and networks.
Two brothers, Tom and Steve Broad have approached you with their desire to jointly purchase two
apartments in the same building. They want to purchase them as rental properties. The building has
12 apartments. The units have 80% permanent tenants in place and the remaining 20% are used for holiday
rentals. The location is a highly sought after area and all holiday periods are fully booked.
The brothers have invested together before and have experience in buying and selling property. They have
sold all their other investment properties and the units will be their only investment until they can identify
another opportunity. The cash at bank is mostly from the sales of other investments.
The property
Address: Unit 1, 92 Seaside Lane, Coastville, <Your State> Unit 9, 92 Seaside Lane, Coastville, <Your State>
Purchase price: $350,000 $385,000
Description: 2 bedroom strata title unit on the ground floor 2 bedroom strata title unit on the ground floor
Body corporate fee $2,500 per annum $2,500 per annum
Proposed income Permanent rental at $450 per week Holiday rental at $45,000 per annum
Agent details: Steven Allstone Steven Allstone
Phone: [phone] 1113
Mobile: [phone] 880 088
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The clients
Client Tom Broad Steve Broad
Current address: Unit 12, 22 Wentworth Lane, Highville, and has
lived there for eight years
23 Dury Lane Pennant Tops and has lived there with
Marie for six years. Property owned in joint names.
Value $650,000 $450,000
Home phone: [phone] 1212
Status Tom is single, no dependents Steve is married to Marie with no children
Employment PAYG and has been with the same employer for
10 years
Self-employed tradesman operating as a sole trader
for 12 years
Income $85,000 per annum $65,000 per annum for Steve
$30,000 per annum for Marie
Cash at bank $250,000 $150,000
Superannuation $150,000 $150,000 (Steve), $20,000 (Marie)
Contents $100,000 $130,000
Motor vehicle $60,000 $30,000 (Steve), $15,000 (Marie)
Liabilities — home loan $300,000 @ 7.2 % P & I, term 25 years $100,000 @ 7.2 % P & I, term 25 years
Liabilities — credit cards $5,000 limit cleared monthly 3% min payment $15,000 limit, $5,000 debt 3% min payment
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Projecttasks(clientt to complete)
Task 1a — Identify the clients’ complex broking needs
Prepare a list of questions that you would need to ask Tom and Steve about their history and experience,
and the unit purchase.
In preparing your list of questions you should ensure that you cover the following:
• The complex features of Tom’s and Steve’s situation and objectives.
• Potential risks and Tom’s and Steve’s tolerance of risk. In considering risk you should consider:
– how you would identify the risks and the criteria you used to evaluate these risks
– how you would assess their current exposure, the tools you would use in terms of probability,
impact and the consequences.
(800 words)
Clientt response to Task 1a
Answer here
Assessor feedback: Resubmission required?
No
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Task 2a —Develop complex broking options
You are required to prepare a full report for Tom and Steve by outlining the process and the risks
(potential and real) of which Tom and Steve should be aware.
In a suitable format, document the process that is required for them to purchase the two units as their
investment properties, establishing a joint loan in the brother’s names. You should also include a selection
of lenders that will consider this style of borrowing.
In developing your report you should cover the following:
1. The parties to the loan including any opportunities or constraints that could impact on their
application
2. The different options available and your recommendation of the best loan structure with the lender
— are they using their own property as cross security or the cash at bank as deposit?
3. What various forms of titles could an apartment be registered in
4. A list of the lenders that are able to lend
5. The procedure to commence a loan for a property like this
6. The steps that will need to be in place
7. The client responsibilities, so Tom and Steve fully understand the loan
8. An outline as to the process and what the client needs to arrange
9. The documentation needed to commence the borrowing
10. The name in which the client will sign the contract/purchase/offer and acceptance. If a Family trust is
involved what name would the title of the property be registered in, and advise what state you are
using to base your answer on
11. The state revenue requirements
12. Which lenders may also require a personal guarantee from Steve’s spouse
13. The maximum LVR to the consumer
14. A summary of all fees and charges — including those for setup and those of the lender.
(800 words)
Clientt response to Task 2a
Answer here
Assessor feedback: Resubmission required?
No
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Task 3a — Implement complex loan structures
Tom and Steve have accepted your recommendations and have given you authority to proceed with their
application.
As part of implementing their loan application you are required to prepare a formal written loan submission
to the lender for pre-approval. Your loan submission must include the following:
• serviceability calculations
• the proposed structure of the loan given there are two brothers and there is a variance in income
• the loan amount
• the property style, size, use
• any other information that is relevant to the lenders requirements.
In additional to these requirements you should also include:
• your obligations under the NCCP (if any)
• maximum loan amount
• maximum loan terms
• any ATO consideration to be made
• your state legislation and OSR requirements
• your general advice restrictions
• property purchase requirements.
(800 words)
Note: Any assumptions you make should be listed, and not be in conflict with the case study information
already provided.
Clientt response to Task 3a
Answer here
Assessor feedback: Resubmission required?
No
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Case study B — Ray Murdoch and Steve Brown
Only complete Tasks 1–3 for one (1) of the case studies in Section 1
Background
You have just met with Ray Murdoch and Steve Brown, referred to you by another commercial client.
Ray Murdoch and Steve Brown jointly own a successful and growing business that manufactures metal
pallets. They trade under the name Pallets-R-Us Pty Ltd. The pallets are manufactured using material that is
lightweight and durable. There has also been a very structured approach to the research and development
for the engineering and design of the pallets. The pallets are used in all industry sectors. Part of the process
involves powder coating the finished product, which is currently outsourced to a local well-established
contractor.
It is critical that Ray and Steve’s product meets market needs. They need to maintain sustainable
production and operating costs if they are to forecast their sales and cost of sales.
They have a well-established client database that provides them with repeat ‘business to business’
dealings. Whilst they have only been trading for 26 months they have a solid business plan with written
supply contracts with three major business clients and several smaller business clients.
Ray and Steve now require a loan to assist them with the purchase of a sophisticated machine, using the
technical platform system CNC. This machine can be programmed to rapidly fabricate multiple components.
The machine has an expected commercial lifespan of at least 15 years with operating software to be
updated every three years. This software and upgrades is included in the purchase price of $800,000.They
need to import the machine from the US. Initial enquiries with the US supplier have indicated that they will
require a letter of credit for the import of the machine.
Their business employs five people and, with the expected increase in business through the automation
of production, they have forecast that they will need to recruit an additional two staff members in the next
3–6 months to meet sales/production demands.
Steve has been in the metal fabrication field all his working life. He has an MBA and understands financial
management. He also has solid engineering skills and developed the majority of the design works for the
business. He is married and has no dependants. His wife is a school teacher and she will be retiring at the
end of the year.
Ray worked with Steve at ‘Protech’ as a foreman. His skills are in production and managing project/job
flow. He has high level technical skills and can complete works to specification at a high standard. Ray is
divorced.
Steve and Ray have provided the last two year’s financial accounts for the trading business, as well as
interim accounts for the current financial year.
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Applicant information
Client Ray Murdoch Steve Brown
Current address: Unit 43, 25 High St Northville, <Your State> and
has lived there for six years
23 Desmond Lane Northville, <Your State> and has lived
there with Kate for seven years. They own property jointly.
Value $750,000 $900,000
Home phone: [phone] 1212
Status Ray is divorced with no dependent age children Steve is married with no dependents
Employment Self-employed business owner Self-employed business owner
Income $100,000 per annum $100,000
Property $750,000 $900,000
Cash at bank $12,500 $9,600
Contents $100,000 $85,000
Superannuation $250,000 Steve $350,000, Kate $60,000
Motor vehicle $40,000 $55,000
Home loan $250,000 @7.2% P &I Term 18 years $350,000 @7.2% P & I Term 22 years
Credit card $25,000 limit with debt of $15,000 payment @3% $10,000 limit with debt of $3,000 payment @3%
Car loan $0 $15,000 payment @ 9% payable 4 years
The business
Year 1 net profit after tax $200,000
Year 2 net profit after tax $220,000
Current year interim profit (10 months trading) $200,000
Wages to partner 1 – years 1 and 2 $100,000
Wages to partner 2 – years 1 and 2 $100,000
Dividend to private investor (flat profit fee) – years 1 and 2 $45,000
Key balance sheet items
Cash $25,000
Debtors $220,000
Creditors $100,000
Notes The business currently meets all creditor payments at 30-day terms.
Debtor collection has been solid. They invoice an upfront payment of 50% of the sale price, which assists in
funding their production.
They have orders of $1m over the next 3 months and have made an increase in their gross profit margin.
The orders are from several clients, so their debtors will be well spread.
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Task 1b — Identify the clients’ complex broking needs
Prepare a list of questions that you would need to ask Ray and Steve about the proposed transaction.
Calculate the required servicing for the new debt, and the lender comfort surplus.
Outline the process and the risks (potential and real) of which Steve and Ray should be aware.
(800 words)
Clientt response to Task 1b
The above depicted case presents that Ray and Steve are involved in the business of
manufacturing metal pallets. Both the entities jointly run the business and they are planning
to invest in machinery with the motive to enhance output and thereby profitability. Hence,
Ray and Steve are seeking for loan assistance in relation to the aspect of purchasing
machinery. Thus, the main questions which need to be asked from Ray & Steve are
enumerated below:
 Give some information about your (i.e. Ray & Steve) income sources and business
activities?
 Does your wife is falling into the criteria of guarantor pertaining to loan? For example:
Steve’s wife Kate?
 According to you, Kate’s income will offer support to you in relation to fulfilling the
obligations pertaining to loan?
 Do you have any past relationship with the bank regarding loan, default in making
payments etc.
 To what extent liquidity and profitability of Pallets-R-us Pty ltd is sound. This in turn
helps in getting information about the level to which financial position and
performance of the company is sound.
 Provide information about your business projects which will aid in the profit margin of
company in the near future.
Hence, by collecting information about all the above mentioned aspects loan assistance
executive would become able to provide Ray & Steve with suitable suggestions.
Debt service ratio is one of the most effectual measures which provide assistance in
identifying the level to which company is capable enough in relation to meeting obligation of
repayment and interest on time. The main reasons behind undertaking such evaluation are to
get information about the firm’s capability in monetary terms.
By using the below mentioned formula total debt service ratio can be determined by Pallets-
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R-us Pty ltd such as:
(Annual mortgage payments + Property taxes + Other debt payments ) / Gross family income
Annual Mortgage payment of Ray
Home loan 18000
Annual mortgage payment of Steve
Home loan 25200
Car loan 1350
Creditors 100000
Total Annual mortgage payment plus debt
payment
144550
Gross family income 200000
Debt service ratio 144550 / 200000 = 0.72 or 72%
From assessment, it has been identified that both the entities Ray and Steve has obligation
pertaining to home loan which they need to fulfil within a certain time period. However,
financial aspects clearly exhibits that profitability aspect of Pallets-R-us Pty Ltd is increased
significantly over the past years. This aspect clearly presents that profitability aspect of
company is good and increasing over the time frame. Given details in relation to the case
entails that company has current assets amounted to $245000. Hence, payment related to the
current assets will be generated by Ray and Steve in the upcoming time period. Along with
this, Pallets-R-us Pty ltd has order of $1 million for the upcoming three months. This in turn
makes remarkable contribution in the gross margin of firm. By considering such aspect, it can
be said that financial position of the firm is good and it would become able to repay the
Page 18 of 54

amount of loan after the specific time frame.
On the basis of cited case situation, there are several risks which in turn associated with the
aspect of taking loan. Thus, Ray and Steve must be aware of in relation to below mentioned
risk:
 In accordance with the case scenario both the entities are taking loan for machinery
which will become obsolete after the period of 15 years. In addition to this, machinery
will demand for up-gradation after the specific time frame which in turn imposes
monetary burden in front of business entities. Hence, all such aspects impose high
level of risk in front of Ray and Steve.
 Further, due to having specific life span of machinery such as 15 years it would not be
possible for Ray and Steve to extend the leading pertaining to machinery.
 Along with this, in the case of investment in machinery liquidity aspect of the firm
will be influenced to a great extent. Moreover, purchasing price of machinery along
with the up-gradation implies for higher investment. Thus, instalments as well as
interest payment will impose financial burden in front of Pallets-R-us Pty Ltd.
Further, interest expense also has direct impact on the profitability aspect of firm
because it is considered as indirect expenses.
Thus, business enterprise should keep in mind all such risks while taking decision about loan
for purchasing machinery.
Assessor feedback: Resubmission required?
No
Page 19 of 54

Task 2b —Develop complex broking options
You are required to prepare a full report for Ray and Steve by outlining the process and the risks
(potential and real) of which Ray and Steve should be aware.
In a suitable format, document the process that is required for Steve and Ray to obtain appropriate finance
for their equipment and set up the loan.
In developing your report you should cover the following:
1. The parties to the loan
2. The product type you would recommend, including an appropriate term, interest rate and residual (if
any)
3. The framework and contents of the letter of credit requirements
4. A list of the lenders that are able to lend
5. The procedure to commence a loan
6. The steps that will need to be in place
7. The client responsibilities, so Steve and Ray fully understand the loan
8. An outline as to the process and what the client needs to arrange
9. The documentation needed to commence the borrowing
10. The name in which the client will sign the contract to purchase
11. A statement of those lenders who may also require a personal guarantee from the borrower’s spouse
12. A summary of all fees and charges — including those for setup and those of the lender.
(800 words)
Clientt response to Task 2b
To
Ray Murdoch and Steve Brown
Date: 26th October, 2017
Along with the terms and condition of loan, there are some other aspects which need to be
communicated are as follows:
From assessment, it has been identified that there are mainly three parties which are
associated with the loan such as Pallets-R-us-Pty ltd, loan agent and banking or other
financial institution. Thus, on the behalf of Pallets-R-us Pty ltd, Ray & Steve will apply for the
loan. Further, in the case of loan, agent also plays a crucial role in offering assistance. Steps of
loan commencing process mainly includes 4 stages that Ray and Steve needs to follow are pre-
approval, conditional approval, the cooling-off period and loan documents and settlement
process. Hence, by following the structured process loan will be taken by both the entities such
as Ray and Steve from the financial institution such as:
In the first step, budget preparation will be done by making estimation of the financial
assistance required. Moreover, both under and over estimation will closely influence the
Page 20 of 54

business planning negatively. Thus, through the assessment, it has found that amount of loan
will be 12240000 for the period of 10 years.
In addition to this, financial statements of the firm are also demanded by the banking
institution. Moreover, financial statements provide deeper insight about the monetary position
and performance of firm. Thus, by considering the financial aspects of the firm amount of
loan and interest rate is decided by the financial institution. Further, at the time of deciding
interest rate prevailing market trend is also considered by the banks. Apart from this, with
the motive to judge the reliability of business banking firms use credit score. Thus, as per the
assessment, credit score attained by Pallet-R-us Pty ltd from the banking institution is good.
It is the accountability of clients, Ray and Steve, to ensure that they will make payment of
interest and repay the loan amount within the suitable time frame. Along with this, it is the
accountability of client to assess to give specific and accurate details to the financial
institution. Moreover, decision making aspect of financial institution in relation to granting
loan is highly influences from the data and details provided by the borrower pertaining to
mortgage assets.
As per the process, clients require to arrange all the details in relation to current value of
property etc. which will be treated as security in against to the loan amount. Moreover, by
considering all such aspects concerned institutions take decision that whether to offer
financial assistance or not.
There are several options which are available to Ray and Steve for the purpose of loan
structuring includes owner-occupied building, residential bridging, business and residential
investment loan. On the basis of terms and condition assessed, Ray and Steve must have an
asset which will be kept by the bank as mortgage in against to the financial assistance offered.
Thus, there is a requirement that value of mortgage must be greater than the amount of loan
which in turn granted by the financial institution. The reason behind undertaking mortgage is
that it provides banking institution with the opportunity to get back the amount of loan along
with the interest if borrower makes default in payment. Thus, by considering such aspect it is
decided that Ray and Steve will take loan by mortgaging the building at which they run their
business operations as well as functions.
Along with this, documentation required for the commencement of loan includes identity
proof, processing fees, 6 month’s bank statement, income details, information pertaining to
credit and debit card, receipts of rent etc. Thus, for the commencement of borrowing both the
entities require to submit all the details to banking institution. Moreover, after making
Page 21 of 54

evaluation of all such details and ensuring that all the details provided by the borrower is
authentic then banking institution grants loan.
Bank will charge several types of fees from Ray & Steve in against to the services offered by
it. Hence, such charges includes the following aspects:
 Loan assistance fees: $1600
 Loan charges: $1400
 Fees for the preparation of loan papers: $1200
 Mortgage fees: $2200
Sincerely
Analyst
Assessor feedback: Resubmission required?
No
Page 22 of 54

Task 3b — Implement complex loan structures
Ray and Steve have accepted your recommendations and have given you authority to proceed with their
application.
As part of implementing their loan application you are required to prepare a formal written loan submission
to the lender for pre-approval. Your loan submission must include the following:
• serviceability calculations, including all borrowing facilities of Directors
• the proposed structure of the loan
• the loan amount
• the property style, size, use
• any other information that is relevant to the lenders requirements.
In additional to these requirements you should also include:
• your obligations under the NCCP (if any)
• maximum loan amount
• maximum loan terms
• any ATO consideration to be made
• your state legislation and OSR requirements
• your general advice restrictions
(800 words)
Note: Any assumptions you make should be listed, and not be in conflict with the case study information
already provided.
Clientt response to Task 3b
From evaluation, it has found that Ray and Steve will take loan from the banking institution
@ 12%. Both the entities of Pallet-R-us Pty ltd are planning to take financial assistance from
the banking institution for 10 years. For the purpose of serviceability calculation several
assumptions have been considered by the entities. Hence, it is assumed that fees which are
related to the loan will not be considered in serviceability calculation. Further, interest rate
will be fixed during the 10 years span of loan such as 12%. On the other side, for
serviceability calculations expenses of Ray and Steve in relation to credit card bills, salary of
both the entities and car loan repayment amount has been considered. On the basis of such
aspect, debt service ratio accounts for 72% respectively.
Annual mortgage + debt payment $144550
Gross income of the family $200000
Page 23 of 54

Debt service ratio 144550 / 200000 * 100 = 72%
Monthly repayment $17,560.84
Fortnightly repayment $8,105
Weekly repayment $4052.50
In the case of loan assistance, concerned authority has several roles and responsibilities. On
the basis of such aspect, loan assistance executive is required to provide concerned entities
with appropriate assistance in relation to credit related contracts. The main objective behind
such aspect is to provide clients with specific information that proves to be fruitful for them.
In addition to this, it is the accountability of executive to do not present inaccurate
information. If loan assistance executives fail to comply with such aspect then they will be
entitled to give $2000 to Australian government in the form of penalty. Thus, it is the duty of
executives to comply with all the rules developed and introduced by Australian government.
Referring NCCP Act 2009, it can be stated that loan assistance is responsible for doing all the
enquiries which in turn has high level of influence on the repayment of loan. Along with this,
assistance executive also has accountability to conduct assessment of the purpose for which
loan is taken by the borrower. Further, in accordance with the rules and guidelines of ATO,
assistance executive is required to make evaluation of the tax amount paid by Ray & Steve in
the last 3 years. Moreover, such assessment provides deeper insight to the bank about
financial abilities and performance of concerned entities. Along with this, by taking into
account the Office of state revenue amount of mortgage is calculated. Further, in accordance
with the rules and regulations, borrowers need to ensure that another loan will not be
undertaken by them on such mortgaged asset.
The main details pertaining to the loan and borrowers are as follows:
In the concerned loan, mainly two entities of Pallet-R-us Pty ltd are involved such as Ray and
Steve. Both the entities have taken decision in relation to obtaining loan with the motive to
purchase machinery. Further, amount of loan which is sanctioned by the banking institution
accounts for $ 1224000 respectively @12%. Such amount will be repaid by Ray and Steve in
the form of equal instalment within the period of 10 years. By taking into account the
serviceability calculation it can be presented that both the entities require making payment of
$17560.84 (monthly), $8105(fortnightly) & $4052.50 (weekly) respectively.
Page 24 of 54

Assessor feedback: Resubmission required?
No
Page 25 of 54

Case Study C — Bill Smith and John Jones
Only complete Tasks 1–3 for one (1) of the case studies in Section 1
Background
You are meeting with prospective clients, Bill Smith and John Jones. They have been referred to you by
their accounting firm, Buckland Accountants.
The prospective clients need assistance with the acquisition of owner-occupied premises to replace their
current business premises which is rented and becoming too small for their growing business.
True Blue Pty Ltd trades as True Blue Real Estate and was purchased as an existing real estate business
three years ago. Bill Smith and John Jones are the directors.
The shareholders of True Blue Pty Ltd are Bill Smith, John Jones and a private investor, Amanda Williams,
who does not work in the business and has no involvement in its day-to-day operation. Each holds an equal
one-third share in the company.
Bill and John have each been in real estate for approximately 15 years, focusing on residential sales and
leasing. They have gained their work experience in the local area. A wealth of knowledge of the area,
coupled with an ever-expanding client base, has resulted in sustained and solid growth for the business.
Details of the property
Sale price of the property is $950,000. (There is no GST requirement as it is being purchased as a going
concern.)
A deposit of $95,000 has been paid and is being held in the trust account of the settlement agent/solicitor.
A cash contribution of $233,240 will be made from the general working account of the business.
Property purchase and loan to be in the name of a new entity — True Blue Pty Ltd as trustees for the Smith
Jones Unit Trust. There are a total of 99 units in the trust and the unit holdings mirror the shareholding of
the trading entity, True Blue Pty Ltd.
The property is situated at 100 Smith St, Yourtown, with contracts exchanged at today’s date and an
anticipated settlement date of 90 days.
General observations about the property
The property is in good condition and is well located in the same street as the current rental premises.
It is anticipated that the premises will meet the needs of the business for the next 10 years.
Page 26 of 54

Summary of initial client fact find
Bill and John have provided the last two years’ financial accounts for the trading business, as well as interim
accounts for 10 months of the current financial year.
True Blue Real Estate’s financial accounts
Year 1 Year 2
Net profit after tax $92,000 $140,060
Current year projected - $175,000
Add back (rent) $47,000 $49,142
Additional superannuation to director $31,400 $34,539
Wages to partner one $70,640 $70,640
Wages to partner two $70,640 $70,640
Payment to private investor (fixed flat profit fee) $45,000 $45,000
Financial details
Gross income $70,640
Owner occupied property valued at $550,000
Outstanding debt on owner-occupied property $210,000 @ 6.2% p.a. on a principal and interest basis
Credit card with limit $15,000 Outstanding debt — $5,000
Superannuation $250,000
Motor vehicle valued at $30,000 (nil debt)
Page 27 of 54

Applicant information — John Jones
Personal details
Financial details
Gross income $70,640
Owner occupied property valued at $750,000
Outstanding debt on owner occupied property $300,000 @ 7.2% p.a. on a principal and interest basis
Credit card with limit $5,000 Outstanding debt — $1,000 cleared monthly, monthly
Superannuation $200,000
Motor vehicle valued at $45,000
Outstanding debt on motor vehicle $15,000 (Assume five year term at 9% p.a. interest)
Business details
Cash in business account $400,000
Other information
Applicants’ solicitor Moffat and Co (contact is Maree Moffat)
16 Tatlor Street, Yourtown, 1234
Phone [phone]
Applicants’ accountant and registered office Buckland Accountants (contact is Simon Williams)
28 Mary Street, Yourtown, 1234
Phone [phone]
Applicants’ banker Westcoal Building Society, Yourtown, 1234
Notes:
• Assume for credit card debts, the minimum monthly commitment should be calculated at 3% of the
credit limit.
• Each of the working directors has appropriate death, income and disability insurance in place.
• A sensitisation factor of 2% should be used when calculating financial commitments.
Page 28 of 54

Projecttasks(clientt to complete)
Task 1c — Identify the clients’ complex broking needs
Prepare a list of questions that you would need to ask Bill and John about their history, experience,
business performance and the property purchase.
In preparing your list of questions you should ensure that you cover the following:
• The complex features of Bill’s and John’s situation and objectives.
• Potential risks and Bill’s and John’s tolerance of risk. In considering risk you should consider:
– How you would identify the risks and the criteria you used to evaluate these risks
– How you would assess their current exposure, the tools you would use in terms of probability,
impact and the consequences.
(800 words)
Clientt response to Task 1c
Answer here
Assessor feedback: Resubmission required?
No
Page 29 of 54

Task 2c — Prepare complex broking options
You are required to prepare a full report for Bill and John by outlining the process and the risks
(potential and real) of which Bill and John should be aware.
In a suitable format, document the process that is required for them purchase the new property and
establishing the loan.
In developing your report you should cover the following:
1. The parties to the loan
2. The best physical set up with the lender — are they using their own property as cross security or the
investment property?
3. What name should the title be registered in given there is a Trust involved and advise what state you
are basing your answer in
4. The procedure to commence a loan for a property like this
5. The steps that will need to be in place
6. The client responsibilities (Bill and John should fully understand the loan that is proposed)
7. An outline as to the lending process and what the client needs to arrange
8. The documentation needed to commence the borrowing
9. The name in which the client will sign the contract to purchase
10. The state revenue requirements
11. A statement as to whether guarantees from spouse’s or any other security will be required and why
this is/is not the case
12. The maximum LVR
13. Suggest three (3) lenders to client’s that would be likely to consider this request
14. A summary of fees and charges — including those for setup and those of the lender.
Note: You may make any reasonable assumptions necessary in order to complete the proposal.
(800 words)
Clientt response to Task 2c
Answer here
Assessor feedback: Resubmission required?
No
Page 30 of 54

Task 3c — Implement complex loan structures
Bill and John have accepted your recommendations and have given you authority to proceed with their
application.
As part of implementing their loan application you are required to prepare a formal written loan submission
to the lender for pre-approval. Your loan submission must include the following:
• serviceability calculations
• the proposed structure of the loan given the purchases is in the name of a new Unit Trust entity
• the loan amount
• the property style, size, use
• proposed security
• any other information that is relevant to the lenders requirements.
In additional to these requirements you should also include:
• your obligations under the NCCP (if any)
• maximum loan amount
• maximum loan terms
• any ATO consideration to be made
• your state legislation and OSR requirements
• restrictions on overseas purchase, if any
• your general advice restrictions
• property purchase requirements.
Notes:
• Any assumptions you make should be listed, and not be in conflict with the case study information
already provided.
• You will need to calculate and include your workings of the required servicing and debt service cover
ratio for the new debt and existing borrowings of Directors. Comment on the DSCR comfort level for
lender.
• You may make any reasonable assumptions necessary in order to complete the proposal.
Clientt response to Task 3c
Answer here
Assessor feedback: Resubmission required?
No
Page 31 of 54

Section 2: Business management skills
Task 4 — Developing and nurturing relationships with clients,
other professionals and third party referrers
George and Mildred now require you to write a plan to assist in developing and nurturing relationships with
clients, other professionals and third party referrers.
Your plan should address the following:
1. How CCF & MB’s policies and procedures and legislative, regulatory and professional codes of practice
impact on developing and nurturing relationships
2. How you would use CCF & MB’s social, business and ethical standards to develop and maintain positive
relationships
3. The importance of confidentiality and how you would maintain it in your dealings with colleagues,
clients and other parties
4. How you would adjust your Interpersonal style to the needs and situation of other parties
5. How you would go about developing and maintaining business and professional networks and other
relationships to benefit the organisation, and how you would use them to identify and cultivate
relationships in order to promote and market the organisation
6. How you could use and cooperate with other professionals and third parties to expand and enhance the
reputation of the organisation, and to identify new and improved business practices
7. How you would build referral business through appropriate communication channels to find and secure
new business relationships
8. How you would identify referral needs and provide information p about CCF & MB’s relevant products
and services
9. How you would secure interviews with referral business so that then needs of clients can be met.
(1,000 words)
You may use any format for your plan but it must address each of the points above. If you are unsure as to
how to write a plan, you can refer to the Business Growth and Marketing topic and use the suggested
SMEAC format outlined in Part 5, Section 12.
When completing this task, assumptions are permitted although they must not be in conflict with the
information provided in the background information.
Clientt response to Task 4
1. In the recent times, customers and other stakeholders place high level of emphasis on deal
with the organization which in turn complies with all the legal as well as regulatory aspects.
Cited case situation presents that CCF & MB’s make focus on performing the business
activities as well as functions by taking into account the professional standards and
regulations. Along with this, values of CCF & MB’s include dealing confidentiality, meeting of
NCCP legal requirements, compliance with the laws and regulations of mortgage industry etc.
All such policies, process and legal aspects which are followed by CCF & MB’s are highly
significant that provides assistance in delivering quality services to the customers. Thus, by
Page 32 of 54

considering all such aspects it can be presented that professional and legal code of practices
assist firm in developing sound relations with stakeholders.
2. Business and ethical standards is the key which in turn provides high level of assistance in
developing prominent relationship with the clients and third parties. Moreover, social,
business and ethical standards serves information about the right and wrong. In the context of
CCF & MB’s, ethical and social standards focus on the maintenance of confidentiality as well
as on serving appropriate information to the clients. Hence, by complying with all such
aspects business unit can build and maintain sound relationship with the customers.
3. Now, high level of focus is made by the organization, client’s etc. on the maintenance of
confidentiality. Thus, CCF & MB’s can meet the confidentiality requirement of all the
stakeholders by using software. Further, by securing database and information served by the
clients through the means of password CCF & MB’s can restrict undesirable practices.
Further, in meeting, by including authorized and specific personnel confidentiality can be
indulged as well as maintained.
4. Needs and situations of other parties differ to the significant level. In this, it is the
accountability of the higher authorities pertaining to CCF & MB’s that react as per the
situation and benefits associated with the deals. Main inter-personal styles include aggressive,
passive and assertive that business entities require adjusting in accordance with the situation
(Interpersonal Styles: Aggressive, Passive, Assertive, 2017). For instance: If CCF & MB’s need
to retain other parties then business entities tend to focus on stating opinions which in turn
offers benefit to all the involved parties. In this way, by adjusting the interpersonal styles
effectual relationship can be maintained with other parties.
5. From assessment, it has been identified that business and professional; networks can be
developed by CCF & MB’s through the means of strategic alliance. This in turn provides
business unit with more resources and assists in offering wide range of services to the
customers. Thus, by making focus on strategic alliance firm can enhance its productivity and
profitability to a great extent. Such strategy will also provide high level of assistance to the
firm in promoting services and building effectual image in the target market’s mind. For
example: By doing partnership with leading firms which are involved in offering mortgage
and insurance services to the customers CCF & MB’s would become able to promote its own
products.
6. In order to co-operate with third parties and other professionals CCF & MB’s will
Page 33 of 54

continuously take feedbacks from them. This in turn helps in assessing the deficiencies which
take place in existing products and offerings. In this regard, by making improvements within
the suitable time frame business organization can improve the practices and thereby brand
image. Along with this, feedbacks of clients, professionals and third parties also give
indication regarding innovative aspects. Thus, through indulging the system of sound
communication with stakeholders CCF & MB’s can enhance both business practices and
reputation.
7. CCF & MB’s can build referral business by undertaking effective communication channels
such as social media, mail etc. On the basis of such aspect, by sharing information with the
existing clients, professionals etc. regarding the referral program firm can find as well as
secure new relationship . For instance: By sending mails to the existing customers and
stakeholders regarding the incentive system associated with new referrals CCF & MB’s can
assess as well as build new relationships.
8. Business entities of CCF & MB’s can identify the needs and requirements of referrals
through developing regular contact with them. In other words, by taking feedbacks from the
referrals business entities can identify the extent to which they are highly familiar with the
products or services of firm. In this regard, by sending mails pertaining to updated
information regarding products or services business unit can serve all the necessary
information to referrals.
9. In the recent times, firms or entrepreneurs can get the desired level of outcome or success
only when they meet the need of client’s to a great extent. In this, it is highly essential for the
business entity to secure data gathered via interview. Thus, by recording all the necessary
details, assessed through interview, in a structured way CCF & MB’s would become able to
develop sound strategic and policy framework. Thus, by recording interview data as well as
findings in a specific file and generating password for the same business unit can secure
interview with referral business. Further, there are several ways that can be undertaken by
CCF & MB’s to protect interview details such as EFS and disk encryption, use of file & share
level security, transit with IP security etc. Thus, by making focus on all such aspects CCF &
MB’s can secure interview details and thereby would become able to take strategic move
which in turn enhances customer’s satisfaction to the significant level.
Page 34 of 54

Assessor feedback: Resubmission required?
No
Page 35 of 54

Task 5 — Growing the business
Having considered how you would go about building and nurturing relationships, George and Mildred now
require you to turn your attention to marketing and promoting CCF & MB’s business. This requires you to
develop a marketing plan for the business.
In developing your marketing plan you should consider the following:
1. Your plan should be developed in line with CCF & MB’s vision statement
2. The identification of target markets using a combination of research and your own personal experience
3. The identification of your major competitors (at least two) with a competitor analysis developed for
each competitor
4. The identification of CCF & MB’s market position based on your research findings and analysis
5. How you would promote CCF & MB’s brand and the tools you would use to achieve this
6. The provision of options for increasing yield per existing client
7. How you would implement your plan and monitor it to ensure objectives/goals/performance indicators
are being met
8. How you would adjust your plan if required.
(1,000 words)
You may use any format for your plan but it must address each of the points above. If you are unsure as to
how to write a plan, you can refer to the Business Growth and Marketing topic and use the suggested
SMEAC format outlined in Part 5, Section 12.
When completing this task, assumptions are permitted although they must not be in conflict with the
information provided in the background information.
Clientt response to Task 5
1.
Vision: To become the leading organization in the category or sector of finance & mortgage
broking.
Mission: This statement of CCF & MB’s make focus on performing activities by complying
with license, legal and professional standards.
Values: CCF & MB’s value includes meeting all the regulatory requirements in relation to
NCCP and mortgage sector. Besides this, ensuring quality and efficiency in the loan process is
another main aspects which is considered by the firm while performing business activities and
functions.
Objectives: The main objectives of CCF & MB’s is to expand business operations and
functions by developing sound relationship with specific real estate agents, accountants &
legal firms. Hence, enhancement of customer base and maximization of productivity and
Page 36 of 54

profitability through the means of strategic alliance is the main motives of CCF & MB’s.
2. In regard to CCF & MB’s, target market includes real estate agents, entrepreneurs,
business units, automobile and insurance companies. The rationale behind this, CCF & MB’s
have specialization in offering services pertaining home loan, commercial & business lending,
vehicle loan and insurance etc. Thus, by developing distinct marketing strategies for varied
target market CCF & MB’s would become able to get the desired level of outcome or success.
3.
Basis of difference CCF & MB’s "AAA" Commercial
Mortgages
A & L Deller &
Associates
Product It offers financing,
insurance and
mortgage lending
facilities to the
customers.
AAA is recognized as
one stop shop
because it provides
customers with the
wide range of
services. Services of
AAA make focus on
the fulfillment of
needs pertaining to
home, business,
commercial, assets,
construction and
development.
Financial services
are offered by A&L
in Melbourne.
Price CCF & MB’s
undertake
competitive pricing
strategy with the
motive to attract
large number of
customers.
High Moderate
Place CCF & MB’s have
capability in relation
Level 1/50 York St,
Sydney NSW 2000,
157 Martin St,
Brighton VIC 3186,
Page 37 of 54

to offering services
to the client not only
from their offices but
also anywhere on the
basis of client’s
convenience.
Through the team of
mobile brokers
company has ability
to serve more
clients.
Australia Australia
Promotion CCF & MB’s
undertake both
traditional
(newspaper,
television etc.) and
modern ( social
media) techniques to
promote the
products or services.
Modern tools of
promotion are
undertaken by AAA.
4. By taking into account the case situation; it can be presented that market position of CCF
& MB’s is good. Moreover, main emphasis has placed by the company on delivering quality
services to the customers through the compliance with regulatory requirements. The main
examples of the company in relation to such aspect is that CCF & MB’s has built a loan book
with the amount of $1.2 billion which in turn shows that position of the company is good in
the market.
5. In order to promote mortgage and insurance related services business entities of CCF &
MB’s will undertake both traditional and modern techniques. Thus, authorities of CCF &
MB’s will place advertisement on newspaper and television with the motive to provide
information to the large group of people. In addition to this, now individuals are highly active
on social networking sites such as Facebook, Twitter etc. Thus, by giving advertisements on
Page 38 of 54

such sites CCF & MB’s can reach to the more number of people and would become able to
promote brand in the best possible way.
6. Enhancement of yield is one of the main motives of every business unit because it is directly
associated with the growth and success of firm. Hence, with the motive to incline yield per
client CCF & MB’s will make focus on developing contact with the agents who deals at large
level. Thus, by targeting such agents business unit can incline can yield per client. Besides this,
by providing clients easy installment system plans firm can maximize the level of output
associated with per client.
7. In order to achieve the set goals and objectives business entities of CCF and MB’s will send
mails to the real estate agents pertaining to loan and insurance related services. Moreover, by
sending mails to the agents in relation to attractive loan and insurance schemes, business
entities would become able to entice their decision making aspect.
For the purpose of monitoring, business entities of CCF & MB’s will compare actual
performance in against to the set standards. Such comparison will provide assistance to the
firm in assessing deficiencies. In this way, by assessing the causes of deviations and taking
corrective measure within the suitable time frame business entity can ensure high level of
improvement. For instance: CCF & MB’s is making efforts in relation to enhancing the yield
per client by 10%. In this, by comparing actual output with such standard figure CCF &
MB’s can assess the extent to which objective is met.
8. For adjusting change more effectively, business entity will primarily make assessment of
modifications in the strategic policy framework. Once, need for change has been assessed
thereafter manager will develop plan for change and communicate it to the stakeholders.
Besides this, after introducing change manager will continuously review output to find out the
need for further changes.
Assessor feedback: Resubmission required?
No
Page 39 of 54

Task 6 — Identifying risk and applying risk management processes
George and Mildred have become very concerned about the potential risks that could jeopardise CCF &
MB’s business operations. They were very impressed with your growth and marketing plans for CCF & MB
so they have now moved you into more of a general manager’s role with expanded responsibilities,
including managing CCF & MB’s risk. As part of your new responsibilities you are required to develop a risk
management plan.
In producing this plan you are required to:
1. Establish the context for CCF & MB’s risk management plan
2. List and explain the tools you will use in assessing the risks you identify
3. Identify the stakeholders you would consult in establishing context and the tools you would use in
identifying CCF & MB’s risks
4. Identify at least two risks that CCF & MB could face for each of the six categories of business risk
including strategic risks, compliance risks, financial risk, operational risks, market and environmental
risks and reputational risks with an appropriate risk statement for each identified risk
5. Conduct a risk analysis and risk evaluation for the risks you have identified
6. Identify treatments for them
7. How you will monitor and review them in your risk management plan.
When you are defining the risk criteria you intend to use you are required to create your own risk matrix to
address likelihood and consequence.
Document your risk treatment plan using a risk register.
You may make any assumptions in producing your plan but these should be documented either in the body
of your plan or separately before you produce it.
(1,000 words)
Client response to Task 6
1. For managing the risk level more effectually, CCF & MB’s will make focus on developing
risk register. This in turn helps firm in assessing the kind of risk which in turn has greater
impact on the operations and functions of firm. Thus, by identifying the risk and its level CCF
& MB’s would become able to develop competent responsive strategy.
2. In order to assess risk level that may jeopardize the growth and development, CCF & MB’s
will undertake Delphi technique. Besides this, firm will also make focus on the development of
risk register and thereby identifies the risk that has negative impact on company’s growth and
performance.
3. At the time of making assessment of risk manager of CCF & MB’s should consult higher
management team, real estate agents, accountants and legal firms. Moreover, management
team has better experience regarding the threats which might occur and influence the
functioning of firm. Besides this, by including real estate agents, accountants and legal firms
in the decision making aspect CCF & MB’ can assess the risk because they have better idea
Page 40 of 54

about the market trend.
4.
Particulars Risk
Strategic risk Ineffective resource allocation
Innovation risk
Compliance risk Changes in regulations
Increase in tax rates
Financial Liquidity risk
Ineffective plan
Operational Fails to adhere with internal policies
Internal and external fraud
Market Decrease in disposable income of
individuals
Changes in the interest rates
Environmental Increased cost
Decline in demand
Reputational Fails to meet deadline
Quality and lack of in
5. For the purpose of risk evaluation and analysis, CCF & MB’s focuses on doing consultation
with the stakeholders. Along with this, by categorizing the risk on the basis of different
aspects such as strategic, operational etc. risk analysis has been conducted by the firm. In
addition to this, at the time of doing risk evaluation potential impact has also been identified
through which one can mitigate the risk level.
Page 41 of 54

6. Risk register
Risk Likelihood Impact Response
Ineffective
resource
allocation
Moderate High In order to
respond such
risk CCF &
MB’s will make
focus on
assessing the
significance of
activity and
thereby
associated
benefits.
Innovation risk High High For reducing
the impact of
innovation risk
business unit
will place
emphasis on
taking
continuous
feedback from
the customers.
By this, firm
would become
able to assess
deficiencies and
taking strategic
action for
improvements.
Changes in
regulations
Moderate High To mitigate such
risk firm will
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focus on making
modifications in
the existing
framework.
Increase in tax
rates
Moderate High In this, CCF &
MB’s require to
exert control on
indirect
expenses. By
doing this, firm
would become
able to offer
services to the
customers at
suitable price
level.
Liquidity risk Moderate Medium In order to
maintain
enough liquidity
firm will make
focus on setting
specific
standard. Thus,
by complying
with such aspect
firm would
become able to
maintain
enough funds
over the
obligations.
Ineffective plan Low Medium To develop
competent plan
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business unit
will evaluate
both micro and
macro factors.
Besides this,
CCF & MB’s
will undertake
budgeting
technique to
develop
effectual plan.
Fails to adhere
with internal
policies
Low Medium Through the
means of
effectual
communication
CCF MB’s will
encourage
personnel to
follow all the
internal policies
and process.
Internal and
external fraud
Low High By indulging the
system of audit
CCF & MB’s
would become
able to resolve
the issue of
internal and
external fraud.
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Decrease in
disposable
income of
individuals
Moderate High Introduction of
affordable
schemes
Changes in the
interest rates
Moderate High Business unit
will come up
with the
innovative
schemes at the
time when
fluctuation
takes place in
the interest
rates.
Increased cost Moderate High Adoption of
budgeting
technique
Fails to meet
deadline
Lower Medium Conducting
time
management
session for the
personnel
Lack of Quality Lower High Use of quality
management
tools
7. By undertaking the aspect of self-assessment, audit or physical inspection and taking
feedbacks from the customers CCF & MB’s authority would become able to monitor the
success of risk management plan. For instance: By taking reviews from the customers
business entity can assess whether there is a need to make improvement in the existing plan or
not.
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Assessor feedback: Resubmission required?
No
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Task 7— Improving the business
Over the last few months business for CCF & MB has been very good with a number of new clients coming
on board as a result of implementing your business growth and marketing plans. However neither you or
the business owners are satisfied with maintaining the status quo; as you and they are committed to a
program of continuous improvement.
You all feel that CCF & MB’s competitive advantage needs to be strengthened and a SWOT should be
undertaken to establish CCF & MB’s strengths and weaknesses including benchmarking the business against
the industry. You now decide that you will carry out a diagnosis of the business including a SWOT analysis
and a benchmarking exercise to improve CCF &MB’s competitive advantage and its business. You are to
produce a document covering your diagnosis which will be distributed amongst CCF & MB’s key personnel.
As a minimum your document should cover the following:
1. The data you have used as part of your diagnosis to identify CCF & MB’s competitive advantage
2. A SWOT analysis to identify CCF & MB’s strengths and weaknesses, its threats and opportunities
3. How you identified and sourced relevant benchmarking data
4. How you selected the key indicators (and who you consulted with) for your benchmarking exercise
5. A consolidated list of the areas for improvement you have identified with a cost-benefit ratio
established for each of them
6. Recommendations on the changes that may be required that will affect existing workflows or CCF &
MB’s organisational structure
7. A high-level action plan that will implement and monitor the recommended changes to be made.
(1,000 words)
In addition to the material on your Subject 2 learning guides the following links give you access to a step-by-
step guide to benchmarking and determining competitive advantage:
• <http://www.business.vic.gov.au/marketing-sales-and-online/increasing-sales-through-marketing/
benchmark-your-business>
Clientt response to Task 7
1. CCF & MB’s can gain competitive advantage over others by introducing attractive finance,
lending and mortgage plans. Moreover, mission, values and objectives of the firm places high
level of emphasis on offering quality services to the customers. Along with this, workforce of
CCF MB’s is highly skilled and experienced. Thus, by introducing competent schemes and
offering better advice to the clients business unit can attain competitive edge.
2.
Strengths
 Highly skilled personnel
 Strategic partnership
 Sound financial planning
 Meeting clients expectation
Weaknesses
 Absence of credit license
 Less training & development
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significantly
Opportunities
 Maximization of productivity and
profitability through expansion
 Improvement in the business
operations and functions through
fostering relationship with other legal
firms, accountants and agents
pertaining to real estate sector
Threats
CCF & MB’s is facing major threat from its
competitors which has direct influence on
firm’s profitability.
3. There are several practices that can be undertaken by CCF & MB’s for the purpose of
benchmarking includes internal, competitive, strategic and generic. Hence, mainly CCF &
MB’s should focus on employing either competitive or strategic benchmarking technique.
Thus, by using SWOT analysis CCF & MB’s has identified strengths, weaknesses,
opportunities & threats and thereby setting down benchmarks.
4. For the selection of key indicators in relation to benchmarking concerned authority of CCF
& MB’s should consult with the team of higher management and supervisors. Further, to
select key indicators such as sales, profit etc. SWOT analysis framework considered by the
firm. Besides this, past data pertaining to sales etc. and market trend has also considered by
CCF & MB’s while making selection of key indicators.
5. In context with making the favourable improvements in the organization there is need to
enhance such functional areas which have the direct impact over gains of firm. Thus, CCF
and MB must make build up a team of professional than identify the loopholes in consolidate
financial statements of the organization. Hence, such reports are consists of the overall
performance made the firm and the subsidiary entity in the years of analysis. It helps them in
making better decision in regards with lowering down the costs as well as increasing the
efficiency of business.
6. In accordance with improving the organizational efficiency there is needed to adopt various
pricing strategies which will result in reducing the costs or expenses of the business. Hence,
there is need to recruit the skilled or talented staff as well as installation of various machinery
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which will be fruitful because it may result into reduction in the labour hour pertaining to
production of a unit. Further, CCF& MB’s needs to implement various promotional
techniques which will help them in gathering the large numbers of buyers as well as investors.
7. In the above listed recommendation it can be said that the organizations need to adopt
various techniques of such as better recruitment process as well as training and development
program. Installation of various new technologies and devices will help organization in
reducing the laborious work. Further, by appointing various accountants and auditors CCF &
MB’s would become able to conduct favourable audit of the accounts frequently. Thus, the
disclosure of the accounts will lead professionals in having better controlling over financial
position of the organization. There is need to adopt various budgetary techniques such as
purchase, sale as well as cash budget which bring the ability for proper execution over such
activities as well as in controlling expenses over them.
Assessor feedback: Resubmission required?
No
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Task 8 —Managing people performance
One of your key responsibilities as general manager is to develop and implement ways to improve the
performance of CCF & MB’s consultants and other staff members.
Answer the following questions:
1. Why is it important to consult with stakeholders when allocating work? What are the possible
consequences of allocating work without consultation?
2. Describe the process you might follow when developing quantitative and qualitative performance
criteria. You should explain how you ensure that the criteria relate to CCF & MB’s objectives and how to
motivate staff members to achieve these objectives.
3. Describe the different ways you might gather information about a staff member’s workplace
performance.
4. What are the benefits of evaluating and monitoring staff members on a continuous basis?
5. Describe how you might do this in CCF & MB.
6. Why is it important to document the performance management process? Explain the possible
consequences of not retaining appropriate records of this process.
7. How can reward and recognition influence the work output of employees? Describe non-financial ways
of motivating employees.
Your answers should be 250 words for each numbered question above.
8. Design a high-level performance management process for CCF & MB to be rolled out to all staff
members.
9. Who should you consult when designing the performance management process? List who you would
consult and the reasons why.
10. Develop a checklist for delivering regular performance appraisals, including a section for team
leaders and supervisors to complete a section for team members participating in the performance
appraisal process.
(800 words)
Martin and Luis are working together on project involving the preparation for a loan application for one of
CCF & MB’s most influential clients, a property developer. Martin missed a deadline and the whole project
is now behind schedule by a week. This is the third time in a month that he has missed a deadline.
Martin has had problems with meeting deadlines in the past and has already had a written warning.
As the general manager you have been monitoring Martin’s performance over the past month,
providing informal feedback about his role in the project. Although he has made several improvements
regarding his performance, his inability to meet deadlines has forced the delay of the client’s development
a further month. CCF & MB made a commitment to the client that the loan application would be with
prospective lender two weeks ago.
The client is not happy that his he does not yet have an approval and is considering cancelling the
agreement he has with CCF & MB and going elsewhere.
11. You have arranged to meet with Martin to talk about the project and his input. How would you go
about providing constructive feedback to Martin?
(500 words)
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Clientt response to Task 8
1. By doing research, it has been identified that individuals differ in terms of their knowledge,
skills and potentials. On the basis of such aspect, it becomes important for the higher
management team to allocate work by doing consultation with the concerned personnel and
their supervisors. Through this, CCF & MB’s would able to delegate the roles and
responsibilities in the best possible able way. If higher management team allocates work to
personnel without any consultation then it may result into de-motivation and dissatisfaction
among them. Moreover, when individuals are allocated with the work which is not of their
interest then it places negative impact on employee motivation.
2. By making focus on the characteristics of personnel CCF & MB’s sets qualitative criteria’s
for the purpose of evaluation. In addition to this, by taking into account the past
performances and deviations assessed through budgetary control tool firm identify as well as
selects quantitative criteria’s.
3. There are several ways that can be undertaken by CCF & MB’s to measure the staff
performance. In order to achieve goals and objectives business unit sets some standards that
personnel need to fulfill. Thus, by doing comparison of actual performance of staff over the
set standards or benchmark CCF can find out the team which is performing well. Hence, by
making assessment of performance business entities can assess the training & development
need of personnel. Besides this, by using 360 degree feedback system staff member’s
performance can be evaluated by CCF & MB’s. In accordance with such aspect, by taking
reviews from co-workers and others people business unit can identify the extent to which staff
members are performing well. By taking into account all such aspects it can be said that
evaluation of workplace performance give indication for training activity and helps in
managing employee’s performance.
4. By doing monitoring and evaluation of employee’s performance continuously CCF & MB’s
can find out the activities or areas in which they are facing difficulties. This in turn helps firm
in assessing the training requirements of personnel and thereby assists in raising their
proficiency level. Besides this, continuous evaluation assists in evaluating the potential as well
as capabilities of personnel and thereby gives input for setting standards pertaining to the
upcoming time period.
5. On the basis of cited case situation, CCF & MB’s offers finance, mortgage and insurance
related services to the customers. In this, by making evaluation of lending and insurance trend
higher authorities can decide whether there is a requirement to organize training session or
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not. On the basis of such aspect, by conducting required session CCF & MB’s can improve the
capabilities of personnel and thereby sales as well as profit.
6. Documentation of performance management process is significant and required for the
purpose of effectual or strategic planning. Moreover, documentation helps in taking decisions
pertaining to promotion, salaries, incentives and training etc, in relation to the individuals.
Along with this, documentation ensures prominent goal management and thereby helps CCF
& MB’s in gaining competitive edge over others. Further, documentation also highlights the
loopholes took place in the former one and assists in the development of new plan.
7. In the recent times, individuals have desire to maintain high living standard and live a
quality life. Thus, by offering bonus, incentives, allowances and other monetary benefits CCF
& MB’s can provide personnel with opportunity to enhance their income level and fulfill their
needs. In accordance with such aspect, monetary rewards place positive and high level of
impact on employee motivation. Along with this, by undertaking non-financial ways business
unit can maximize employee motivation includes promotion, monthly or quarterly award or
recognition etc.
8. To develop the performance management process there is need for CCF & MB’s to adopt
the adequate plans for future which will help the organization in managing the work
efficiency of workers as well as or form. Thus, there is need to set an organizational goal
which will help employees or managers to make efforts in accordance with such targeted
goals. Hence, they need to fix various benchmarking which will motivate workforce in
achieving the small targets on time. However, the aims of entity must be reliable and easily
attainable o the one could make efficient efforts in context with achieving them. Thus, in
accordance with achieving the targets there is need to train or educate the workforce for
duties which are going to be performed by them.
9. At the time of designing performance management process, concerned authority of CCF &
MB’s should consult with higher management and the supervisor of personnel whose
performance is going to be evaluated. The rationale behind this, management team and
supervisors have better idea regarding goals as well as factors on the basis of which
performance needs to be evaluated. Hence, through consulting with such authorities HR
manager can develop suitable performance management process.
10. In accordance with having proper execution operational activities in the CCF and MB's
there is need to develop checklist or performance appraisal. Thus, it will help manager to
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make changes in their decisions as well as they could be able to plan further decisions.
However, such methods of monitoring the work will be helpful for managers, supervisors as
well as for employees in analyzing the current situation with the planned one. Hence, such
roles and responsibilities will help the organization in such manner:
11. On the basis of given case situation, Martin was unable to perform activities more
effectively and efficiently. In this case, constructive feedback is as follows:
Dear Martin,
This is to inform you that you are allocated with the work in relation to the
preparation of loan application for one of the most important client’s of CCF & MB’s. Hence,
through monitoring it has found that you missed deadline three times in a month. Due to this,
project was delayed and thereby affected client’s satisfaction negatively. Results of monitoring
shows several improvements in your performance but still you failed to accomplish work on
time. Along with this, due to your inability in relation to meeting deadlines concerned client is
not happy and taking decision to go elsewhere. Thus, you have to work hard for reducing such
deficiencies because such aspect has greater impact on client’s satisfaction and productivity as
well as profitability. Kindly provide specific details regarding training session you need for
making improvement in the skills and delivering timely services to the clients.
Assessor feedback: Resubmission required?
No
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