FNS40815: Assessing Compliance and Client Service in Mortgage Broking

This document is a completed assessment task for the Certificate IV in Finance and Mortgage Broking (FNS40815). It covers key aspects of mortgage broking, including identifying and interpreting compliance requirements, delivering and monitoring services to customers, and understanding relevant legislation such as the NCCP Act. The assessment delves into topics like the unsuitability test, client requirements and objectives, codes of ethics, credit guides, training registers, and APRA's stance on bank lending. The document also addresses client service, including empathy, active listening, over-servicing, conflict resolution, and monitoring client interactions. The assessment requires the student to demonstrate understanding of the mortgage broking process and the ability to apply compliance principles to real-world scenarios. The assessment evaluates the student's knowledge of industry regulations, ethical practices, and client relationship management within the mortgage broking context.

Certificate IV in Finance and Mortgage
Broking
Assessment Task
FNS40815
Your details:
Name:
Address:
Phone:
Company name
Email:
Your assessment task
ths.
Plagiarism Statement
All assessments must be your own work and not a result of plagiarism or
collaboration with other students or workmates.
Assessment
The pass mark is 70% for each element. If you do not achieve this, you will
receive feedback via your email address and be asked to resubmit your
assessment for a second marking. Assignments will not be returned to you as
they need to be retained for by us for verification and audit purposes.
Task Assessments Total
Mark
Pass
Mark
Actual
Mark
1 Identify and Interpret Compliance Requirements 27 19
2 Deliver and Monitor a Service to Customers 39 27
3 Contribute to OHS Hazard Identification & Risk Assessment 41 29
4 Manage Personal Work Priorities and Professional Development 24 17
5 Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers
17 12
6 Promoting the Effective Use of Credit 15 10
7 Prepare a Loan Application on Behalf of Mortgage Broking
Clients
64 45
8 Steps Taken by the Credit Provider 23 16
Total 250 175

Assessor’s Initials:
Assessment Date:

Objective The objective of this Assessment Task is to demonstrate that you have the
skills and knowledge required to conduct a client relationship and comply with
statutory, industry and organization compliance requirements.
Elements to
be assessed
To achieve this objective, you will need to demonstrate your ability to:
The assessment tasks in this assessment will allow you to demonstrate your
knowledge and skills in relation to these elements.
Assessment
process
Start by:
1. Reading the Assessment Task.
2. Type your answers to the assessment tasks into this template document
(hand-written answers are not accepted)
3. Submit your completed document by uploading it on the ‘Ready for
Assessment’ area of www.CPDplus.com
Don’t forget to keep a copy and retain it for 12 months.
Need help? If you have any questions or would like to request a digital copy of this
assessment task, please email the Support Team at
Statement of
Completion
Upon successful completion of this assessment you will be awarded the
Statement of Completion for FNS40815 Certificate IV in Finance and Mortgage
Broking.

Task 1: Identify and Interpret Compliance Requirements
1. Identify
compliance
requirements
Mortgage brokers face important compliance requirements, the foremost
among them being the reasonable lending provisions of the NCCP Act. The
penalties for non-compliance include loss of license (for businesses) and
removal from the industry (for individuals). If fraud is involved there may also
be the criminal penalties of fines and / or imprisonment.
Compliance requirements are not static. It is therefore important to stay up to
date with them.
Mortgage brokers also need to keep up-to-date with the actions of the
regulatory authorities such as APRA and the Reserve Bank. Their actions may
not amount to direct regulation, but through their effects on interest rates and
bank lending these authorities can have a very direct impact on the business
mortgage brokers are able to do.
(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What must a
mortgage broker do to comply with the unsuitability test?
No Mark
1. To undertake reasonable steps for verifying the financial situation /1
2. To make reasonable inquiries in respect to the borrower's needs and
objectives.
/1
3. To make reasonable enquires about the financial position or situation of
the borrower.
/1
(b) List the sorts of items a client’s requirements and objectives could include (as indicated by ASIC).
Mark
The amount of credit required or the maximum amount sought.
The time period for which the amount is required.
The purpose and the advantage sought along with whether the consumer seeks the product feature or
not or the flexibility attached to it along with costs attached to these features and any risks as well.
/2
(c) Leading credit providers and other financial organisations have code of ethics, sometime called codes
of conduct. Select one of them and summarise it by itemising its main principles.
Mark
False and misleading conduct:
The misleading conduct and false representation by the corporation in the trade and commerce is
prohibited under ACL. The court may implement monetary policies or the injunction of grants for
preventing such conduct or repetition that certain actions can be taken like cancellation of the
contract or an award for damages. These offences overlap with the fraud, thus, penalties and the
jail can be imposed.
/4

Sub-total /9
Continued
(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit Guide.
Mark
The following points must be contained in the credit guide:
 The name, contact details along with the Australian credit license number of the licensee.
 Details on account of any charges to be payable by the consumer.
 Details of the commission to be received from the lender.
 Information about the complaint handling, contact details of the dispute resolution procedures.
 Details in respect to the licensee’s obligation for providing the written copy of an unsuitability
assessment on the request.
/3
(e) It is important to keep up to date with compliance requirements so that the required changes can be made to
organization procedures and product offerings. Suggest three sources that you can use.
Mark
1. The professional associations practice can be utilized as the sound system or the guidance in order to
meet with the compliance rules.
2. The professional associations like MFAA and the FBAA can inform its members about the changes
before it takes place.
3. The compliance officers of the mortgage broking companies who can provide assistance to the
practitioners in meeting with the compliance standards.
/3
(f) Explain the requirement for Australian Credit Licensees to keep a training register.
Mark
ASIC requires that the business is required to document as compliance measure which might vary with the level
of documentation in the larger and the smaller organization. As the compliance system is established, it is then
implemented and monitored. Training has a crucial role in this process but it is not sufficient. The Compliance
and the ethical aspect should become the dominant value in the business. It involves the training courses and the
individuals assessment services for the financial advisers.
/2
(g) Explain APRA’s current attitude towards bank lending for investment properties.
Mark
APRA has imposed certain restriction which had an impact over the property investment lending. The banks
have responded to the same by making changes in the serviceability needs and making it difficult for the take
finance by the investors. The borrowing ability has reduced and interest rates have increased and repayment on
the loan is at the huge rate.
/2
Sub-total / 10
Continued

Task 1: Identify and Interpret Compliance Requirements Continued
1.2
Interpret,
analyse
and
prioritise
identified
complian
ce
requirem
ents
Some of the compliance requirements are difficult to meet. Unfortunately, also
there have been some ‘rogue’ mortgage brokers who have failed to comply – to the
disadvantage of their clients.
The finance planning industry has been plagued by non-compliance in the largest
planning groups, with the image of the industry being substantially tarnished as a
result. It may not suffer greatly because of the absence of an alternative source of
financial advice.
This is not so with mortgage brokers. They are just establishing their reputation and
consumers always have alternative of going to the lenders directly.
(a) Select three tasks you perform on a regular basis that are subject to compliance requirements.
No Mark
1. Finding a lender /1
2. Completing the application for loan /1
3. Submitting the loan application to the bank or the any other loan provider and getting the
approval for it.
/1
(b) Identify the compliance requirements that are relevant to the three tasks selected, indicating
the name of the relevant legislation, regulation or code of conduct.
No
1. ASIC /1
2. Australian Consumer Law /1
3. The National Consumer Credit Protection Act 2009 /1
(c) How does your organisation monitor your compliance?
Mark
Organization carries out the periodic audit and monitoring of the compliance standards set which is an
important function of business as well as ASIC requirements. The most effective way for ensuring the
compliance work is timely auditing and assessing the results and along with that carrying out the gap
analysis.
/2
Sub-total /8
Total /27

Task 2: Deliver and Monitor a Service to Customers
2.
Identify
customer
needs
The relationship with a client is generally described as beginning with the
establishment of empathy. In other words, it is first necessary for a mortgage
broker to establish that he / she is truly interested in the client and the client’s
needs. It is only after that that the mortgage broker has established the right to
interview a client.
(a) Use the internet or any other source to find a definition of empathy.
Mark
It refers to the ability of someone to share and understand the feelings of another person through the way of
putting oneself in that situation. /1
(b) List three open-ended questions that assist in developing empathy with a client? How do such
questions indicate empathy?
No. Mark
What makes one think that it is the time for making change?
What is going on?
How is the business?
/2
The open question helps in providing information in respect to the needs and wants which the mortgage
broker requires to have.
/1
(c) List and explain the steps involved in an ‘active listening approach’.
Mark
Asking questions in order to identify the needs of the client. /1
Go bank and revise what the client stated and be sure every detail is collected. /1
Ensure that both the sides agree on the same thing. /1
(d) How is client service commonly monitored in your organisation? What are the two possible
outcomes?
No. Mark
1. Gathering all the feedback of the customers and applying the same quality standards for interacting with
the clients and listening to the clients,
/1
2. By monitoring all across the various channels through which the organization can learn about the
customer interaction, resulting into making an improved decision and service processes.
/2
Sub-total /10
Continued

Task 2: Deliver and Monitor a Service to Customers Continued
2.1 Deliver
a service to
customers
In a survey on the reasons for referrals conducted by David Maister, only 10%
were due to the quality of technical work. The remaining 90% of referrals were due
to the quality of service.
This indicates that the key to maintaining client relationships and gaining referrals
is the provision of outstanding service. This has been described by Maister as
‘over-servicing’.
(a) Describe three ways in which a mortgage broking organisation can attempt to ‘overservice’
clients?
No. Mark
1. Asking client more and more to upgrade their service and in case there is a scope, project cost might be
required to be renegotiated.
/1
2. Making an investment in the business tools which will help in effectively tracking and monitoring the
results.
/1
3. In case there is a chance to showcase the work, engage in the client recognized awards and events. /1
(b) How would you keep a client informed about the progress of an application as it passed through a
creditor provider’s hands? What approximate timing might be involved?
No. Mark
1. After the submission of the application, the broker is responsible for ensuring that the product provided
to the client is consistent in respect to the requirement. Broker is required to have contact with the
client and is also responsible for any breach in the responsibility as per the NCCP Act.
/2
2. The time frame between submission of the application and forwarding it to the credit provider should
not be longer than 2 days. It is essential that the information is forwarded to the credit provider on time
or on the same day if possible.
/2
(c) Describe how you might attempt to resolve conflicts with clients.
Mark
First, is identifying the circumstances and immediately taking actions to change the pattern through a non-
aggressive approach. Afterwards, making change in the situation where both the sides win which is known as
win win situation.
/2
(d) How do you can prepare clients for the hiccups that can happen while their credit application is being processed
Mark
The one possible way is through providing client with the regular updates if possible. But it is important to note
that do not provide any irrelevant information or the information which the lender already has.
/2
Sub-total /11

Continued
(e) The chapter on Operating a Mortgage Broking Business contains an example suggesting that a
mortgage broker acting in the best interests of clients should act as a Protector rather than an Expert.
What are the implications for this in regard to (i) advice given to clients and (ii) recommending the
most suitable loan products?.
No. Mark
1. There is always introduction of changes in the new product from time to time and so there are chances
that the features might change. Therefore, the mortgage broker is required to be alert in regard to the
changes from the provider of the product which can be collected through meetings and seminars.
/2
2. Broker requires to be prepared for discussing the various products to their clients and providing them
with their various differentiating features so that a better decision and choice can be made.
/2
(f) How could you prepare yourself to deal with client concerns?
Mark
The major concern pertaining to the client is the resistance in respect to the terms of product like the interest
rate. Also, there are times, it can be like formal complain. In both the way, there is a need for overcoming the
resistance. Thus, as the wining situation is identified, the major challenge is to turn it into win win. So effective
methods required to be identified for meeting with the client concerns.
/2
(g) Give examples of the following legal breaches: breach of the duty of care, false and
misleading conduct, unconscionable conduct & conflict of interest without disclosure.
No. Mark
1. /1
2. /1
3. /1
4. /1
(h) Once a desirable market segment has been identified, a mortgage broking business can put
its mind o developing suitable marketing strategies. List examples of different strategies that
might be used.
Mark
/2
Sub-total /12
Continued

(i) What steps can be taken to keep up to date with product changes and ensure that this
knowledge is properly disseminated?
Mark
/2
(j) What are the procedures for dealing with client complaints in your organisation?
Mark
/2
(k) What normal protocols should for protecting the confidentiality of client files?
Mark
/2
Sub-total /6
Total /39

Task 3: Contribute to OHS Hazard Identification & Risk Assessment
3.
Contribute
to workplace
hazard
identificatio
n
Occupational health and safety hazards are often considered only in terms of
physical injury, perhaps the result of working with heavy machinery, working in an
excessively noisy environment, or slipping or falling. Just as relevant, however, is
work-related stress. This describes the physical, mental and emotional reactions
of workers who perceive that their work demands exceed their abilities and/or
their resources (such as time, help/support) to do the work.
For the questions that follow, please read ‘Overview of Work-related Stress’ from
the NSW Government. It may be found at:
http://www.safework.nsw.gov.au/ data/assets/pdf_file/0008/99233/SW0836
7-1117-395314.pdf
Other ‘Tip Sheets’ from the same website may also be useful.
(a) How would you define workplace stress?
Mark
/4
(b) Suggest at least two ways in which work-related stress may affect client relationships.
Mark
/2
(c) Suggest at least four approaches you can take to reduce workplace stress? (Hint: you may
find suggested ways if you key ‘handling workplace stress’ into a search engine).
Mark
/4
Sub-total /10
Continued