Diploma of Finance and Mortgage Broking - Financial Services

This document presents a detailed solution for a Diploma of Finance and Mortgage Broking assignment. It covers a range of topics, including the influence of external factors on interest rates, the role of financial services sectors like banking and corporate sectors, and the Australian Financial Complaints Authority (AFCA). The assignment explores communication strategies related to AFCA, the impact of the Comprehensive Credit Reporting (CCR), and the implications of credit representative appointments. It also addresses aspects such as ABN/ACN, GST, performance objectives, training requirements, and role-modeling within the finance and mortgage broking context. The document includes various tasks and questions providing a comprehensive overview of the financial services landscape, relevant legislation, and compliance requirements.

Running head: DIPLOMA OF FINANCE AND MORTGAGE BROKING
Diploma of Finance and Mortgage Broking
Name of the Student
Name of the University
Author Note

1DIPLOMA OF FINANCE AND MORTGAGE BROKING
Table of Contents
Task 1...............................................................................................................................................4
Question 1....................................................................................................................................4
Question 2....................................................................................................................................4
Task 2...........................................................................................................................................4
Question 1....................................................................................................................................4
Question 2....................................................................................................................................6
Task 3...........................................................................................................................................7
Question 1....................................................................................................................................7
Question 2....................................................................................................................................7
Question 3....................................................................................................................................7
Task 4...........................................................................................................................................8
Question 1....................................................................................................................................8
Question 2....................................................................................................................................9
Question 3....................................................................................................................................9
Task 5.........................................................................................................................................10
Question 1..................................................................................................................................10
Question 2..................................................................................................................................11
Question 3..................................................................................................................................11
Question 4..................................................................................................................................12

2DIPLOMA OF FINANCE AND MORTGAGE BROKING
Question 5..................................................................................................................................13
Question 6..................................................................................................................................13
Question 7..................................................................................................................................13
Question 8..................................................................................................................................14
Question 9..................................................................................................................................14
Task 6.........................................................................................................................................14
Question 1..................................................................................................................................14
Question 2..................................................................................................................................15
Question 3..................................................................................................................................16
Task 7.........................................................................................................................................16
Question 1..................................................................................................................................16
Question 2..................................................................................................................................16
Question 3..................................................................................................................................17
Task 8.........................................................................................................................................17
Question 1..................................................................................................................................17
Question 2..................................................................................................................................18
Question 3..................................................................................................................................20
Question 4..................................................................................................................................20
Sustainability goal......................................................................................................................20
Economic outcome/s..................................................................................................................20

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Task 9.........................................................................................................................................21
Question 1..................................................................................................................................21
Question 2..................................................................................................................................21
Question 3..................................................................................................................................21
Question 4..................................................................................................................................21
Question 5..................................................................................................................................21
Question 6..................................................................................................................................22
Question 7..................................................................................................................................22
Question 8..................................................................................................................................22
Bibliography...............................................................................................................................23

4DIPLOMA OF FINANCE AND MORTGAGE BROKING
Task 1
Question 1
The three external factors which could influence the movement in the interest rates and
also dictate the economic and political climate are the level of inflation, growth in the wage rates
and the level of job security in the country. In case of low inflation, the consumers choose to
spend more which results in the lower interest rates. If the rate of inflation is high, then the
government increases the interest rates to compensate the consumers for sacrificing their
consumption. Similarly, growth of wages also positively impacts the interest rates as there is a
growth in the income available for saving. The job insecurity results in a decrease in the interest
rates as investors prefer to save more than they spend in these situations. Hence, the incentive to
save becomes lower due to lower interest rates. In these cases, the interest rates not only affect
the Central bank but they also effect the investment choices of the financial and other sectors in
the economy.
Question 2
The two financial services sectors that are involved in influencing the interest rates
prevalent in the economy are the banking sector and the corporate sector. The banking sector
determines the interest rates prevalent in the economy and they change the interest rates
according to the conditions existing in the market. The corporate giants determine the interest
rates by purchasing bonds from the markets and injecting the funds into the banks to fund their
business operations in the short term and the long run.

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Task 2
Question 1
Dear Colleagues,
The Australian Financial Complaints Authority is an Australian external dispute
resolution scheme which intends to resolve the complaints of the consumers with their member
financial organisations. Based on the ASIC Regulatory Guide RG 165, various bodies like the
Australian financial services licensees, credit licensees and authorised credit representatives are
all required to be members of AFCA. The main advantage of having the membership of AFCA is
that most of its members do not have any complaint lodged against them. This is because of the
fair, independent and effective solutions provided by the experienced and professional staff
operating within the organisation. Other benefits of the membership of AFCA include the
expertise, professional development, knowledge and security provided by the scheme. It also
ensures that the firms registering with it are complying with the guidelines of ASIC.
The key points that are needed to be considered in communicating to the customers are
the purpose of AFCA and its basic nature. As the purpose of it is to settle complaints from
consumers and small businesses, it saves a huge amount of time and resources for the same.
Apart from it, the fact related to it being made mandatory by the ASIC should also be explained
to the consumers. However, it should also be mentioned that it is not a company or a government
department to avoid confusion about its nature and the bodies governing it. It also provides
certain confidence to the consumers before investing in the same. The application fees and the
basis of its calculation also need to be explained to the consumers. The range of complaints
which are covered by the scheme including credit, financial, loan, banking deposits and

6DIPLOMA OF FINANCE AND MORTGAGE BROKING
insurance complaints all need to be taken into consideration. The range of firms which are
registered and the mandatory nature of the scheme should also be explained to the consumers.
The nature of remedies like compensation for losses and the other solutions provided by the
same should be clearly stated. The aspects which are supported by the scheme and how they
benefit the consumers need to be explained. Similarly, the codes and other related aspects which
are administered by the firm also need to taken into consideration.
The AFCA Code Compliance team supports the financial firms to strengthen their
relationship with the customers, improve the complaints handing from customers and also reduce
the number of disputes arising from customers through improved service delivery. Some of the
aspects administered by it include the Code of Banking Practice, General Insurance Code of
Practice, Insurance Brokers Code of Practice, and Customer owned Banking Code of Practice
and the Life Insurance Code of Practice.
Question 2
The key points that need to be kept in mind while communicating information about
AFCA to the customers are as follows:
 ASIC Regulatory Guide 165
 Form 5 Information Statement
 Form 9 Information Statement
 Form 17 Information Statement
 Other relevant information like final response letters, delay letters and credit guide are
all important aspects to consider in explaining the same to the consumers.

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Task 3
Question 1
The main change will be related to the manner in which the creditworthiness of the
consumers is determined. Instead of only looking at the negative aspects of a consumer, the CCR
also allows the organisation to operate more efficiently and maintain and develop a good
relationship with the consumers.
Question 2
The usage of the Equifax website and connecting it to the industry on which information
is required is a good way of ensuring that regular updates are received with regards to the
changes in the CCR or any other related regulations.
Question 3
Who How By when
Finance Brokers Through an internal
document generated to all the
finance brokers
Within two weeks from the date
the guidelines were published
Consumers Through an additional
privacy form which is
generated to all the existing
and new customers and
provides information about
their credit worthiness and
the manner in which it was
Within a month to all the existing
forms and as a part of the business
process in relation to the new
customers.

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determined.
Task 4
Question 1
PROCESS IMPLICATION
Background
checks
This is to ensure that the representative undertakes only those activities
covered by their license and do not have any criminal record. This also
makes sure that they do not hire any people banned or disqualified from
being appointed as a representative. It ensures the legitimacy of the
appointment.
Training
requirements
This is to make sure that the credit representatives remain adequately trained
to act and perform their role competently. As the industry maintains certain
standards, the representatives are expected to carry out the operations at a
level accepted by the industry. This is also mandatory under the Regulatory
Guide 206.
Membership to
an EDR scheme
In order to ensure that the authorisation has an immediate effect, it is
necessary that the representative has a membership to an EDR scheme.
Otherwise, the authorisation will not have any effect on the appointment of
the representative.
Written consent To maintain adequate records and to serve as a proof for the appointment of
the representative, the licensee or the manager should give a written consent.

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The copies of the consent should be retained by both the representative and
the manager for their future usage.
Monitoring and
supervising
To make sure that the credit representatives are operating at an adequate
level and are also complying with the legal requirements of the business,
constant monitoring and supervision is required on the part of the manager.
This also makes sure the legality of the appointment of the representative.
Question 2
ABN stands for Australian Business Number whereas ACN stands for an Australian
Company Number. An ABN is a 11 digit number which should be obtained by all the businesses.
An ABN is a number which is given to all the businesses irrespective of their size and nature by
the Australian Taxation Office. It includes businesses like a sole trader, company or a trust. This
is to make sure that the person conducting the business is doing so with the correct entity. ACN,
however, is given only to companies by ASIC. The ACNs are used by the ASIC to monitor a
business. A company conducting business has both ABN and ACN.
Question 3
GST is generally levied on the entities or individuals involved in business of some kind
and not on people deriving their income from salaries or similar nature of employment. An
individual should register for GST if their business or enterprise has a GST turnover of $75000
or more. Here, GST turnover is the turnover arrived at after deducting the GST from the actual
turnover. A new business is also required to register for GST if it is expected to reach the
threshold of $75000 within the first year of operation. Similarly, an non-profit organisation with

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a turnover exceeding $150000 is also required to register for GST. A person providing taxi or
limousine travel for passengers is also required to register for GST regardless of the turnover of
the business in order to claim fuel tax credits for the business or the enterprise.
Task 5
Question 1
Performance Objective Required Skills Current Skills
Time frame to
complete
Be able to communicate
more effectively
Good knowledge of the
language and be able to
present myself well.
Knowledge of the
language is good. Also
able to present myself
well with some scope for
improvement
6 months
Able to lead people well Leadership and
organisational skills
No prior experience in
this aspect
18 months
Learning the use of
Aggroup software
Technical knowledge
about using the software
No past experience 12 months
Question 2
According to RG 206, a responsible manager should have measures in place to comply
with the organisational competence obligation. This involves reviewing the organisational
competence on a regular basis or when the responsible managers change. It also involves

11DIPLOMA OF FINANCE AND MORTGAGE BROKING
undertaking at least 20 hours of Continuing Professional Development (CPD) and have records
which were used in measuring the organisational competence and also record the steps used in
maintaining the organisational competence.
Question 3
Individual Performance Objective Required Skills Current Skills
Shona To better understand more
complex/ self-employed
loan structures
Prospecting skills Knowledge in customer
service and loan
structure policy
Ron To perform better in
generating new prospects
and handing conflict with
clients
Interpersonal and
communication skills
Grasp on loan products,
structures and policies.
Rashana Improve organisational
skills and better
understanding loan
structures
Time management,
organisational skills
and updated knowledge
about loan structures
Sales skills and general
advice
Lena Improve spoken English
skills and broaden loan
product offerings. Also
maintain sufficient file
notes
Knowledge about new
products,
communication skills
and complying the
regulations.
Good written skills and
knowledge about
products, policy and
loan structures.

12DIPLOMA OF FINANCE AND MORTGAGE BROKING
Question 4
Individual Course Method of
study
Time frame
to complete
Resources
Required
Offsite or in
office
Shona Complex
Lending
structures
Online or
Correspondence
4 hour session
for one month
PC, Ipad Office
Ron Effective
conflict
resolution
Online or
Correspondence
2 months PC, Ipad Office
Rashana Effective Time
Management
n/a 6 months Note pad,
highlighter,
pen and
calendar
In office
Lena English
Language Skills
Online or
Correspondence
(with learner
guide)
12 months Notepad for
notes taking,
highlighter
and pen
Offsite

13DIPLOMA OF FINANCE AND MORTGAGE BROKING
Question 5
In order to act as a role model, there is a need to display character traits like effective
time management, smooth management of conflict and knowledge about different lending
structures of the business. Other necessary skills include good written and communication skills
and good customer management skills. Similarly, identifying the needs of the team members and
meeting them on a consistent basis will be useful.
Question 6
The team will be encouraged using the TIER system. This includes developing programs
for the team and having experimental workshops on issues like team behaviour, teamwork and
cohesion. Individuals will be developed using job training, upgrading skills and offering scope
for personal growth. Recognition and reward will be provided to individuals for outstanding
team performances and individual contributions.
Question 7
a) Shona should complete her learning of the Aggroup software to be able to successfully
adapt to the system.
b) Ron Meehan and Belinda should be able to help Shona regarding the use of the software.
Question 8
The representatives would be provided with written documents which will provide
feedback to them about the efficiency and diligence with which they undertook the tasks. They
will also be provided a detailed feedback about the new opportunities and responsibilities that
would be undertaken by them as a part of the business. Their efforts would also be commended
in the meetings of the organisation.

14DIPLOMA OF FINANCE AND MORTGAGE BROKING
Question 9
Judie Micaleff
Id Number:
For the period February 2020 – February 2021
Date Course Provider Hours
04/02/2020 Subscription to the
adviser magazine
Publisher 3
06/03/2020 Lender Updates
(various)
AAMC Training
group
8
09/04/2020 MFAA Build your
skill sets event
MFAA 4
13/5/2020 Internal compliance
training program
Broker 2
17/9/2020 How to read and
understand financial
statements
My Help 3

15DIPLOMA OF FINANCE AND MORTGAGE BROKING
Task 6
Question 1
Task Action Who To be completed by
Procuring required
materials
Organising the
materials and required
items
Shona 2 days before the
event
Setting up the stall Organising the
procured items and
placing them in the
stall in an organised
manner
Ron 8am
Courier Organising the courier
for delivering the
materials to the venue
Rashana 7am
Be on the stand Ensure the
organisation of the
activities
Ron and Rashana 6pm
Packing up Finishing the event
and wrap up
everything
Lena 6pm

16DIPLOMA OF FINANCE AND MORTGAGE BROKING
appropriately
Question 2
A holiday package, travel and gift voucher, additional commission and bonus payments
are some of the incentives that could be provided to the employees.
Question 3
The team will be communicated about the importance of new clients in enhancing the
reputation of the organisation. Similarly, they will also be provided with an offer of incentive for
making the event a success. This should motivate the representatives to take a more active part in
the event organised by the entity.
Task 7
Question 1
Some of the general standards of the MFAA Code of Practice are as follows:
 The members should be of good character and repute and should not engage in any
misconduct;
 All the members should comply with the code;
 All applicable laws, regulations and practices relevant to the business should be known
by the members on a regular basis. They should remain up to date regarding the same;
 Continuous education programmes and the Continuing Professional Development
Programs (CPDs) should be undertaken constantly; and
 The Constitution of the MFAA should be followed by the members at all times and
business should be conducted accordingly.

17DIPLOMA OF FINANCE AND MORTGAGE BROKING
Question 2
Recording Registers Records and Certificates Policies and procedures
Training register Qualification certificates Business continuity plan
Remuneration register Financial viability review HR records
Complaints register Background Checks Disciplinary action for
compliance failures
Question 3
Estimate of
commission to be
received by us. This
commission is payable
to us for assisting you
to obtain finance.
.65% of the amount of the principal finance amount shortly after
the finance is provided. We estimate this to be $2080.
.15% per annum of your outstanding loan amount owing payable
annually. We estimate the largest monthly payment to be $480
These amounts are inclusive of GST.
Task 8
Question 1
Social Economic Environmental
Governance Positive Customer Outcomes Environmental and social

18DIPLOMA OF FINANCE AND MORTGAGE BROKING
impacts and risks of products
and services

19DIPLOMA OF FINANCE AND MORTGAGE BROKING
Question 2
Three major
criteria for
measuring
profitability
NAB’s version of
SUSTAINABILITY
PRINCIPLES
(Material Theme)
Impact on industry
(Stakeholder View
and Relevance to
NAB)
NAB’s Activities
(How We’re
Responding)
NAB’s Corporate
Sustainability
Outcomes
(Performance)
Economic
Positive Customer
Outcomes
Our stakeholders
are interested in
the policies and
processes we have
in place to make
sure the loans we
provide suit the
needs of our
customers, and
their ability to
make repayments
– balancing
economic growth
with sound risk
management.
The stakeholders
want to ensure that
the loans provided
by the company suit
the needs and
repayment ability of
the consumers.
Environmental
Environmental and
social impacts and
risks of products
and services
Our stakeholders
expect us to
understand and
manage the
environmental and
social risks and
impacts
associated with
our products
BNZ developed a
Responsible
Investment Policy
which excludes
investments in
companies that are
involved in the
production of cluster
munitions, anti-
personnel mines,
nuclear weapons
and tobacco or
tobacco products
from its international
equity holdings. It
also became a
signatory to a
statement
supporting the
tobacco control
ambitions of the
World Health
Organisation. • We
incorporated an ESG
screen into our fast-
track small business
lending product.
97% of customers who
experience financial
difficulty and enter
NAB Assist are up to
date within 90 days
(Australia).
Social Governance Maintaining a high
standard of
governance at
NAB is always a
priority for our
stakeholders,
especially our
investors.
BNZ developed a
Responsible
Investment Policy
which excludes
investments in
companies that are
involved in the
production of cluster
munitions, anti-
personnel mines,
nuclear weapons
25% female non-
executive directors.
In November 2017,
we announced that
Ann Sherry had been
appointed to the
Board, lifting the
Board's gender
diversity to 33%

20DIPLOMA OF FINANCE AND MORTGAGE BROKING
and tobacco or
tobacco products
from its international
equity holdings. It
also became a
signatory to a
statement
supporting the
tobacco control
ambitions of the
World Health
Organisation. • We
incorporated an ESG
screen into our fast-
track small business
lending product.
Question 3
Areas of the business
Your customers Reduction in the complaints from customers
Your staff Lower breaches in guidelines by the staff
The community Better inclusion index rating
The environment Reduction in the percentage of energy usage
Question 4
Sustainability goal Economic outcome/s
Lower complaints from customers Reduction in costs due to errors
Lower breaches in guidelines Improvement in efficiency and profitability
Better Inclusion Index Improves the reputation of the company
Reduction in energy usage Business is able to thrive profitably in the long run.

21DIPLOMA OF FINANCE AND MORTGAGE BROKING
Task 9
Question 1
The three main sectors are banking and general financial services, insurance and
superannuation and mortgage and financial broking services.
Question 2
The MOU is the agreement between both ASIC and APRA to coordinate, cooperate and
share information with each other to improve the working relationship and productivity of both
the organisations.
Question 3
The current income of Melanie Janes should be asked along with the annual interest paid
on the home loan by them. The other credit cards and the payments in relation to them are the
important factors to be considered.
Question 4
In order to lend responsibly and avoid making losses, it is important to make necessary
inquiries about a client.
Question 5
The information provided by a client may not be correct in all situations. Hence, it
becomes necessary to verify it before providing loans to the customer on the basis of that
information and incur losses.
Question 6
The requirements of the customer identification and collection process include the
general details of the customers like their name, residential address and their date of birth.

22DIPLOMA OF FINANCE AND MORTGAGE BROKING
Similarly, information about the full business name, its address and the ABN should also be
provided to the consumers.
Question 7
These are not allowed under the Section 17 of Privacy Act 1988. Unauthorised use of tax
file numbers may result up to a fine of $10000 or imprisonment of two years or both under the
Taxation Administration Act 1953.
Question 8
The lender may ask the debtor about certain information which the debtor must provide
within 21 days of providing the specific information to the lender. This information will then be
used in determining the ability of the consumer in meeting the requirements of the loan.

23DIPLOMA OF FINANCE AND MORTGAGE BROKING
Bibliography
Mfaa.com.au. (2020). [online] Available at: https://www.mfaa.com.au/sites/default/files/About
%20Library/MFAA%20Code%20of%20Practice%20160904.pdf [Accessed 8 Feb. 2020].
LegalVision. (2017). What is the Difference Between an ABN and ACN? | LegalVision. [online]
Available at: https://legalvision.com.au/what-is-the-difference-between-an-abn-and-acn/
[Accessed 8 Feb. 2020].
Apra.gov.au. (2020). [online] Available at: https://www.apra.gov.au/sites/default/files/APRA-
ASIC%20Memorandum%20of%20Understanding%202019.pdf [Accessed 8 Feb. 2020].
Equifax Australia. (2016). Small Business. [online] Available at:
https://www.equifax.com.au/small-business [Accessed 8 Feb. 2020].
Afca.org.au. (2020). Telling your customers about AFCA - Australian Financial Complaints
Authority (AFCA). [online] Available at: https://www.afca.org.au/members/telling-your-
customers-about-afca/ [Accessed 8 Feb. 2020].