FNSSAM403 Assignment: Prospecting and Client Relationship Building

This document presents a comprehensive solution to the FNSSAM403 Prospect for New Clients assignment, a core component of the Certificate IV in Finance and Mortgage Broking. The assignment delves into various aspects of client acquisition and relationship management within the financial services sector. It explores effective prospecting methods, including referrals, networking, and seminars, and analyzes the importance of professional online profiles. The solution addresses cold calling techniques, emphasizing relationship building and tailoring financial products to client needs. It also covers the significance of client data collection, LVR calculations, and responses to client concerns, as well as interpersonal techniques for overcoming client hesitations. Furthermore, the document provides a detailed analysis of a client's financial goals, concerns, and creditworthiness, alongside research and presentation of suitable car loan products, including interest rates, comparison rates, and loan security. This assignment helps students to gain a deeper understanding of the finance and mortgage broking industry.

FNSSAM403 Prospect for new clients
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Student details
Course name Certificate 4 in Finance and Mortgage Broking
Assessment name FNSSAM403 Assessment
Surname Rahimi Given name Saberah
Address 5A Forrest Street, Blair Athol SA 5084 Postcode 5084
Email [e-mail]
Phone [phone] Phone (other)
Current
occupation
Home Duties
Industry Years in industry
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Checklist of attachments:
 Task 1 – Short Answer
 Task 2 – Written Test
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FNSSAM403 FMB Assessment
CREDIT TRANSFER
You may be able to claim credit transfer for a unit/s of competency that you have previously
completed with AAMC Training or another RTO. If you have been awarded a record of result
or statement of attainment for any of the units detailed below then please go to the Credit
Transfer tab in your Learning Centre and follow the prompts.
This assessment relates to the following units of competency:
 FNSSAM403 – Identify opportunities for cross-selling products and services
Please refer to AAMC Training’s full Recognition Policy for further details.
Task 1 – Short Answer
In order to successfully complete some of the tasks in this assessment you should have access to
the following documents. These are available in the AAMC Training Useful Resources or you may
wish to find your own/use your company documents.
 Credit Guide – important facts about the business and products you provide
 Adviser Profile – this may be included in your credit guide and could be simply your licence
number as the services you provide are one in the same as your licensee
 Client Needs Review – for client data gathering
 Preliminary Assessment
Questions
1. What do you believe to be three good prospecting methods and why?
1 Referrals It is the surest way to score clients
2 Networking It is the cheapest way
3 Seminars and Webinars Makes a lasting impression
2. In your own opinion, what are some areas which are important to say about yourself and your
business when creating a Facebook or LinkedIn profile? Why would correct and professional
information be important to your organisation?
Some of the important areas which should be mentioned in our facebook and linkedin profiles
regarding ourselves and our business include:
a) Correct name of the entity
b) Correct address of the business
c) List of awards or certification received for achievements over the years.
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d) It is important that we mention our educational background in respect of the professional
degree held by us.
e) Objectives, policies and belief statements of the company.
It is of utmost importance hat only correct and professional information is displayed in the
social media this is because of the fact that the purpose of social media is to attract
various stakeholders including suppliers, prospective clients, investors and employees.
The information provided helps in building our credential.
3. What is cold calling? Is cold calling an effective prospecting method? Explain your answer.
Cold calling is an early stage selling process wherein calls are directly made to prospective
buyers for the purpose of convincing them to buy our product. Cold calling is an effective way
of prospecting. The reasons for this is plenty, some of them include a single person can make
more call sitting in an office than roaming about in the market. This saves effort and time
along with cost on the part of the company. But the effectiveness of the cold calling depends
entirely on the communication skills of the person making the call. Hence the art of cold
calling must be inculcated among the employees before embarking on it.
4. How would you build a relationship with a client through cold calling?
I would help him explore his interests and find his needs, then shape my product according to
the current needs that he requires.
5. In your opinion, why would the following areas of information (found in the Credit Guide) be
important for a new client to understand? How could this information protect all parties?
 your role and responsibility as Credit Advisor – due to the level of my understanding of the
needs of the client
 the role of the organisation – it is important as it is the domain that matters, if the
organization operates in that domain than it has a vitality.
 the identity of and information about the Credit Licence holder – this helps us protect the
identity of the client and the prospective region of inference.
 the range of services provided – This handles the current need of the client and its
matching with the services offered
 all costs, fees, commissions etc. associated with the transaction – these must be low as
they increase the potential customer might not return
 the procedures for handling complaints and disputes. –This helps retain the customer and
also enables him to return for resolution.
6. Why do you believe is it important to encourage prospective clients to express their needs
and goals when completing a data collection?
It is important as to know the client more and to offer him something valuable in return.
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7. Your client Mary Jane has advised that she would like to purchase a home worth $400,000 and
you have worked out associated costs of around $30,000. She has a deposit of $150,000. She
has spoken to friends and are concerned that she may have to pay mortgage insurance which
she hears can be a very high cost.
Complete a quick LVR calculation and explain the outcome to the client. Why is it important to
respond clearly to the client in this case? What could you do to make sure the client has
understood what you have advised?
Loan to Value ratio = Loan \ Valuation = 280000/400000= 70%. In this case the loan forms
only 70% of the value of the property hence availability of loan will be easy for the client. The
client will not have to pay the Lender mortgage insurance which covers the lenders in the
event client fails to pay back the lender’s money. This is because the price of the property is
substantially higher than the value of the loan given by the lender. It is very important to
communicate this to client clearly because it helps the client as well as the advisor to gauge
the actual financial position of the client with respect of the current market conditions and
select the product accordingly.
8. Your client Mary Jane is hesitant about completing some of the information in the client needs
review. As an Adviser, you must fully complete a client needs review for a number of reasons.
What is a probing question you may ask the client to determine their resistance? What are
two points you may highlight to the client to try and overcome this situation in an appropriate
manner?
The probing question would be “do you have any concerns? What are they?” It is generally
found that clients don’t like to divulge personal information due to the risk of leakage of
personal information. Hence it must me made sure that our client is not facing such
inhibitions.
1) I would highlight that our institution is statutorily registered and adhere to strict
compliance policy.
2) Also i would like to notify the client the purpose of the information taken from him and way
in which it will be stored by us.
9. A prospective client is hesitant to use you as their broker because they are already a client
with a competitor. What interpersonal techniques and communication skills would you use to
overcome this?
In order to win over the customer I would make sure not to demean the existing competition
rather create value for myself or establish my value for the client. it might be done by
communicating to the client that though there may be many competitors in the market the
product offered by us and the type of customer service provided by is unmatched in the
entire market. The key is to make the customer believe that we are better suited in terms of
solving the issues of the client.
10. You have now gained Mary Jane’s consent to move forward with fully completing the fact
find. She has advised that further to the basic information provided above in question 7, she
is buying the home to live in and she is a single parent on a good income in long term
employment. Mary Jane would like to pay the home off early but would also like some spare
funds for a holiday over the next 12 months. Protection of the home and her child in case of
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job loss or becoming ill is highly important. Mary Jane would like to purchase another
investment property down the track to provide for her retirement. Prior to a marital
separation, Mary Jane and herex husband had paid off another mortgage. Mary Jane has a
clear credit history. The client may also like a 100% offset account as she had one in the
past and it worked well to pay the loan off quickly. Mary Jane would prefer a major bank as
she is concerned a smaller provider may not have any branches in her area.
Whilst it would be prudent to complete a fact find under normal circumstances, for this
exercise we will ask you to complete the table below. In the table below highlight and record
the client’s goals, concerns and creditworthiness (why the lender should consider them for the
loan).
Goal Concern Creditworthiness
To pay off the loan amount as
early as possible
She wants to have some
spare amount for a holiday
too
She was swift in paying of her
mortgage loan earlier.
Safety of her child and home In case of her illness or job
loss she will be helpless
She is proficient in financial
planning as can be judged
from her wish to procure an
investment property.
Opening up a 100% offset
account.
She needs only a major bank
because smaller banks might
not hav branches in her area
She has previously operated
with such bank accounts and
had paid the entire loan
amount quickly. This shows
discipline on her part.
11. John has asked you for some advice on buying a car for personal use worth $40,000 over a
five year loan term. You have completed his client needs review and must now complete
some research to present John with appropriate finance options. Research and present two
products that may be appropriate for John (you can use a number of sites including rate city to
complete this activity).
1 Product Name : Latitude car Loan
Interest rate : 6.99% (fixed)
Comparison rate: 8.1%
Interest rate type: Fixed
Vehicle type: loan
Loan security : Secured
Additional repayment: Free
Flexible repayments: yes
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Specialist Consultation: provided
2 Product name: Beyond Bank low rate car loan
Interest Rate: 5.69% (fixed)
Comparison rate: 5.97%
Interest rate type: Fixed
Loan security: secured
Early repayment fees: not applied
Loan term: 7 years
Establishment fees: $175
12. Using a search engine, research “Ten tips to protect your customers’ personal
information”. Select one of the 10 points and in your own words briefly describe the
purpose of this step.
Top ten tips to protect our customer’s personal information are as follows:
a) Installing reasonable security measures to ensure the customer’s personal information
is safe from unauthorised and inappropriate access.
b) Make a stringent privacy policy, inform the customer about the same, and keep it
accessible to the customer.
c) Take record of all the information that you have, the place where it is stored.It should
be noted that person that has access to this information.
d) Never underestimate the threat depending on the size of the organisation.
e) Only collect that information which are required for your purpose. Avoid taking useless
and bulk information from the customers.
f) Use the latest anti-virus software’s, operating software’s and web browser. This
protects it form virus and malware attacks.
g) Employ multiple layers of security. For e.g. spam filters help in weeding out malware
and viruses.
h) It is very crucial to scan any new device that is being connected to the system in order
to protect it from virus attack.
i) Encourage employee education and training on the matter, as they are ones who are
handling the data. Educate them about the relevance and importance of the data.
The most important point among the above-mentioned ones according to me is installation of
the latest operating systems and antivirus software’s within the system of the organisation.
This is because of the fact that the real threat in the modern day world crops up from the
external environment of the organisation than the internal one. Competitors and other entities
with malicious interests are always on hunt for personal data of the general public thorough
ejaculation of various types of viruses and malwares. Hence, it is of utmost importance that
proper steps are taken to stop them from entering the system by installing proper firewall
methods.
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13. You have completed a fact finder, costing analysis, and LVR calculation for a client and
have worked out the due to affordability issues, based on the living expenses they
have provided, the client is unable to borrow the required loan amount. They would be
able to borrow a loan amount of $5,000 less. Referring back to your client needs
review, what additional question/s would you ask the client?
The difference in the loan amount due to the expenses of the client is very minimal. Hence
some of my question to the client will be as follows:
1) Is it possible for him to identify and then reduce non-essential living expenditure in
order to meet up the funds required to finance the entire amount of loan?
2) Is he willing to consider some other affordable options which would not require him to
cut down his present expenses?
14. After you have completed the product research how would you prepare for the next
contact?
In order to prepare for the next contact the following steps will be taken:
a) Use a follow up schedule: it will contain the details regarding when the calls and email
follow-ups should be happening.
b) Use of different contact formats: use of multiple mode of contacts like txt, email etc.
c) Getting agreement on the next steps: further follow-ups with the customers should be
stopped if they do not agree to it. It should be ensured that irrespective of their
enthusiasm, a permission is obtained for further follow ups.
Task 2 – Written Test
1. List six buyer motives and in your own words, analyse and discuss issues relating to two
of them.
1 Profit This motive is most common as it is for a gain, it can be
short term or long term
2 Fear of loss
3 Comfort
4 Security This reason occurs when one want to protect his future.
5 Pride and Prestige
6 Emotional satisfaction
2. Using conflict resolution and persuasion techniques, write a response to the following
examples of buyer resistance:
Not interested It is very justified to be not interested by a short phone call. But,
a first-hand experience of our product will definitely create value
for you with very minimal cost. It will require only fifteen
minutes
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Send me some
information
It is possible for me to send entire information available with to you
right now. But, it is seen that it raises more doubts in the minds of
the customer rather than solving them. Hence the better
alternative would be to use just 15 minutes of your time to
consider it and analyse it thereupon.
No money –
Can’t afford it
I am aware about the fact that your aim is to reduce unnecessary
expenditures. I am just suggesting you to evaluate the product and
am confident that you will find it as a small investment rather than
a cost.
You’re wasting
your time
Sir we never consider an interaction with a business professional to
be waste of time. I am assured that after evaluating out product
you will be sure that it can create more returns for you compared
to its meagre cost.
3. How do you successfully undertake cold calling? Explain the process from start to finish.
In order to ensure that the cold calling is carried out successfully the speaker must be
aware about the type of person he is dealing with and the person speaking to the client
must be aware about the subject matter precisely. The process of cold calling can be
summarised as follows:
a) Polite introduction of the person making the call and the product on offer.
b) Asking about the specific requirements of the client related to the product on offer.
c) Patiently listening to the response of the prospective customer and then framing the
next phrase with utmost intelligence so as to ensure that the speaker and the product
will be adding value to the client.
d) Informing the client about the specific product and its utilities and relevance to the
customer but not trying to sell.
e) After informing take notes about the concerns of the customer related to the products
preferably taking of notes in order to address the issues raised by the customer.
4. Read the following article, and answer the questions below.
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Information in this article may not be based on current market
statistics and is for assessment purposes only
Why Melbourne’s Properties Will Keep On Rising
In Australia, over some 120 years or so of not quite so accurate statistics, property
prices have risen at an average compound rate of 10.4%, very slightly ahead of
England. Again, property prices have doubled every 7 years or so despite droughts,
wars, changes of government, interstate and overseas migration, interest rate
movements, exchange rate movements, changing rates of unemployment, CPI
movements, etc.
Property cycles
When one takes a short-term view of property price movements, one can get confused
by apparently contradictory statistics. However, if you understand that property prices
move in 7-10 year cycles, the picture becomes a lot clearer.
Let’s take one obvious example. The movement in NSW and Victorian property prices
tend to be counter-cyclical to Queensland prices (especially South East Queensland).
This is heavily influenced by what is happening in the NSW & Victorian economics which
encourages migration to Queensland, and at other times in the cycle, people returning
to NSW and Victoria.
So, when Queensland prices are moving ahead strongly (because of this additional
demand from interstate migration), prices in NSW and Victoria exhibit slower growth,
and vice versa.
A study of cycles shows that the Sydney market is much more volatile than, for
example, the Melbourne market. Sydney prices rise faster but can also experience
significant falls in each cycle – Melbourne prices tend to rise rapidly (+25%, +20%) in
the first two years of an upturn and then more moderate increases of 3-7% in the
remaining years of the cycle till growth spurts again.
Relative prices in each capital city
Over the last 100+ years in Australia, each of the six State and Territory capitals have
established a fairly stable ranking with each other in terms of their median house and
apartment prices.
Traditionally, Sydney has always been the most expensive followed by Melbourne,
Canberra, Brisbane, Perth, Adelaide, Darwin & Hobart. Increases in prices in each of
these markets, for whatever reasons (mining booms, economic recessions, rural booms
and droughts etc) can cause some temporary shifts in the relative standing of each of
these cities. But these are normally temporary shifts and the long-term standings re-
assert themselves as the various cycles evolve.
continued on the next page
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In the last 3-4 years, Perth & Darwin prices (and to a lesser extent Adelaide and
Brisbane prices) have increased dramatically due to the boom in mining and oil
company revenues and increased demand for labour (and therefore housing) in those
cities. Sydney and Melbourne prices, while still rising, have slipped behind these other
cities in terms of relative price increases.
Basic demand & supply
The ever-increasing need for housing in Melbourne and Sydney is not based on
temporary boom factors but on underlying (substantial and permanent) shifts in
population. Each city has a strong underlying economy, which is not dependent on one
particular industry. In addition, estimates of Melbourne’s population for 2020 is over
four million people (an approximate increase of 25% in 13 years). This is huge in terms
of population increase and the need to accommodate these extra people.
The reality is that Melbourne’s building industry cannot build more than about 140,000
accommodation units (houses and apartments) per annum due to shortages of qualified
tradespeople of all types and shortage of suitably zoned land and the building permit
process. Demand, on the other hand, is estimated at approximately 170,000
accommodation units per annum. Added to this, State and Federal governments have
all but completely removed themselves from supply of affordable housing.
The inevitable consequence is that house and apartment prices will continue to rise
(quickly over the next 2-3 years and then more moderately). And rentals, which are
already moving up quickly, will continue to rise ahead of CPI.
Relativities with other capital cities will be restored by above average price increases in
Melbourne and then Sydney.
Interest rates
The spectre of a return to 16-17% interest rates (experienced only once in Australia’s
history and then only for a few months in 1990) has loomed large in many would-be
investors’ minds. This fear is understandable but not justified.
Interest rates are now approximately 1-1.5% above the lowest they have been in the
last 40 years. From an economist’s viewpoint, they are currently above the theoretical
long-term average that they should be (arrived at by adding the present CPI increase
and the additional incentive needed to be offered for people to save and lend their
money to others – historically 1.5-2.0%).
Currently rates are above their theoretically justified level. This is not to say that the
Reserve Bank will not use one or even two more 0.25 per cent interest rate rises to send
a message to the market not to get “overheated”. Even two such increases will leave
interest rates within 2% of their 40-year lows. A 0.25% per cent increase in the average
mortgage of around $220,000 is equivalent to an extra $10.60 per week ($45.80 per
month) in repayments.
By comparison, a 10% increase in the median house price in Melbourne is equivalent to
an $817 per week ($3542 per month) increase in the owner’s wealth.
continued on the next page
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Rents
The level of rents (determined by supply & demand) and the value of the properties to
which they relate establish the rental return per annum. The rental return rises and falls
at different times in the cycle as real rents and property prices move up at different rates.
Rental returns on residential property tend to vary between about 3.5-4.0% and 5.5-6.0%.
Melbourne’s rental returns have moved very close to the top end of this range and are
showing every sign of continuing to rise further as vacancy rates continue to show a decline
from over 4% to a little over 1.1% in most parts of Melbourne. The city’s long-term
imbalance between the new accommodation that can be supplied and the level demanded
by increased population/increased member of new household formations noted above,
allows the actual level of rents to continue to rise quite quickly. This will attract new
investors into the residential house and apartment markets, which will, in turn, keep
pushing prices up.
Housing affordability
There is much debate about whether houses have become “unaffordable” for young
couples. Much research has been done on the number of years’ salary it takes to buy
the “average” house, and the proportion of income taken up by mortgage repayments.
This is a very complicated issue, which has received a lot of publicity during this faux
election campaign. Despite all the rhetoric I have seen no viable recommendations
come forward and even less political commitment to solving the problem.
My view is that Australia (which has enjoyed the highest rate of home ownership in the
world) will slip in the world rankings. Those who have parents who can help them will
still be able to buy a home (especially with abundant bank credit persisting) while those
who don’t may be consigned to a life of renting. This will further stratify Australian
society with the rich getting richer and the poor getting comparatively poorer. This,
combined with governments removing themselves from constructing accommodation,
will put more reliance on a healthy private rental market and make it suicidal for
governments to remove or reduce investment incentives.
Where are we now?
The above factors of:
 Over 900 years of compound growth in residential property values;
 Where Melbourne prices are in the current price cycle;
 Where Melbourne prices are vis a vis other capital city prices right now;
 The short, medium and long term population forecasts for Melbourne;
 The building industry’s restricted capacity to build new accommodation units;
 Where we are in terms of interest rates v capital growth;
 The continuation in the rise in rents and the very low vacancy factor; and
 The lack of any coherent way of easing the pressures on accommodation
5.
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a. Explain three points from this article that would appeal to/encourage investors seeking
to buy more property in Melbourne.
The three points which can be taken out from this article with respect to the high
probability that the investors will be encouraged to buy more property in Melbourne are as
follows:
1) Stability in prices: compared to other states such as Sydney the prices of
Melbourne may rise about 20 -22% in case of an uptrend but doesn’t fall back
drastically like in the case of Sydney. Rather it continues to grow at a slower
rate of 3%-7%.
2) Rise in the demand: it is expected that the population of the city by the year
2020 would be around 4 million and this boils down to the demand of around
170000 accommodations whereas the with all the available resources available
it is only possible to make around 140000 houses per year.
3) Increased rental income: the rental income prevalent In Australia gives a return
of around 3.5%-4% and the rental income of the city has notched itself up to
the higher end of this level. Further the economists believe that it is going to
rise further.
b. Why would it be prudent for a person to hold on to property over the long term?
It is very prudent for any person to hold on to any property he has in Australia for the
longer run. This is because of the everyday rising demand for them. The demand is not
expected to stop as the government is not going to participate in making
accommodation in the new future. Hence the value of the property simply due to the
effect of demand will grow over the period.
c. Why will housing continue to become unaffordable for first home buyers?
The housing will continue to grow costlier for the new buyers because it entails
consumption of their significant portion of their salary. The government is reluctant to
take part in making homes for the people at affordable prices.
5. List six different prospecting methods and in your own words, compare and contrast two
of them.
The six different prospecting methods are as follows:
1) Cold calling
2) Referrals
3) Content marketing
4) Networking
5) Email marketing
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