UNIT – FNSPRM613 Grow financial practices
STUDENT INSTRUCTIONS
This assessment and subsequent assessments in this module are all based on this Case Study Scenario below. You are to target your existing database and then do research on securing new business clients.
Overview of assessment requirements in the whole module:
- Create a Marketing Plan – Student note: in this assessment you are creating the Marketing Plan only.
Complete the following Marketing Plan Template, addressing each of the following requirements.
- Read the Case Study scenario below. Find the goals and enter the information into the Marketing Plan where stated.
- Vision Statement – enter the information into the Marketing Plan where stated.
- Create a new vision statement for the business based on your new goals and objectives.
Do not copy & paste example, if you do, you will be required to redo your response and resubmit your assessment.
- Provide a brief explanation of what actions you’ll take to uphold your vision statement.
(this explanation would generally form part of your business plan that your Aggregator will need. However, we are not creating a business plan in this course).
- Research and identify your target customers based on the requirements of your business goals. You may use the client types from the Learning Guide.
Considerations:
- Your current clients have asked for assistance with business vehicle loans. You are currently not accredited with many lenders.
- You have relationships with key referral partners that have ‘high net worth clients’ who already own their own homes and looking to invest in property. They have agreed to let you promote to these clients to increase interest.
- Based on the target market you identified in Q3 above; you need to complete a competitor analysis of two (2) potential competitors that offer products to these types of clients.
- Analyse your market position by answering the question; see Q5 further on in this assessment..
- Research and comment on your findings; see Q6 further on in this assessment.
Case Study Scenario
You are a finance broker working in your own business as a sole trader for the past five (5) years and offer a range of mortgage and personal finance to individuals and couples, and business owners. You have reviewed the sales figures from last year, and the breakdown of types of finance (%) settled for the business. The business has had strong results in the owner-occupied construction finance, especially for first home buyers.
You have decided that you would like to diversify and expand the business into other areas of finance, especially high net worth investors and cross promotion of products to existing clients.
The two drivers influencing these goals are:
- increased enquiries from existing clients regarding vehicle loans and
- a visit from your aggregator BDM who mentioned that investor clients are a little more astute when it comes to finance.
Your original Vision Statement
We support new home buyers and simplify the maze of government grants when buying and building.
Excerpt from the original business plan explained the vision statement
To grow the business by supporting new home buyers to acquire the most suitable finance to suit their requirements by working with professional local builders and developers. To attract government support for new home buyers and provide a range of suitable lenders who deal in construction and basic introductory loans with 100% offset facilities.
Business considerations
Your current clients have asked for assistance with consumer and business vehicle loans. You are currently not accredited with many lenders. The return the business expects to receive for these types of loans is between $1,000 and $2,500 per client for loans in the range of $35,000 to $60,000. These clients may be attracted to variable rate loans over 5-10 years.
You have relationships with key referral partners that have ‘high net worth clients’ who already own their own homes and looking to invest in property. They have agreed to let you promote to these clients to increase interest.
Your estimated income per client is between $3,000 and $4,000 for home loan, ranging from $450,000 to $600,000. These buyers may be attracted to fixed rate, interest only loans. You have agreed to pay your referral partners 15% of the commission received.
*NB These figures are purely fictitious and not indicative of the commissions you would earn as broker. There are many other considerations when calculating income from brokerage.
Task 1 – Marketing Plan Template
| MARKETING/GROWTH PLAN | ||
| Identify business objectives and needs | ||
| Rank your business goals in order of priority | ||
| 1 | ||
| 2 | ||
| Create a new Vision Statement | ||
| a | Create a new vision statement for the business based on your new goals. | |
| b | Provide a brief explanation of what actions you’ll take to uphold your vision statement. | |
| Research and identify your target clients based on the requirements of your business goals. | ||
| CLIENT 1 – GOAL 1 | CLIENT 2 – GOAL 2 | |
| Client Type | ||
| Lending Needs | ||
| Age Range | ||
| Occupation | ||
| Income Range | ||
| Interests | ||
| Location (you may choose an area that has good opportunity and/or in your vicinity) | ||
| Culture/Ethnicity | ||
| Complete a competitor analysis of two (2) potential competitors that offer products to the types of clients you listed in Q3. |
| Competitive Factor | Your Business | Competitor 1 – Broker | Competitor 2 – Lender |
| Time in Industry | 5 Years | ||
| Key Competitive Advantage | Offer over 30 products Approved by 15 Lenders | ||
| Location | Your location | ||
| Products and Service | Owner occupied loans first home buyers construction loans personal loans | ||
| Distribution Channel | Online systems enable national clients | ||
| Business Reputation | Winner of two industry excellence awards | ||
| Community Support | Make a wish foundation | ||
| Target Market | clients seeking investment properties business vehicle finance | ||
| Strengths | ability to offer variety of loans and leases highly experienced support team good business track record | ||
| Weaknesses | slower turnaround times increased paperwork and policies inability to approve loans on the spot | ||
| Opportunities | Ability to drive more business through key referral partners Marketing through good customer ratings and industry recognition Good location exposure on a main road in Paramatta | ||
| Threats | Other brokers in the vicinity offering similar products Near local NAB and CBA branches |
- Based on your competitor analysis research; what is your market position in comparison to your competitors in relation to your goals?
- Write a short brief on the financial services industry environment and challenges facing new brokers and brokers in general.
Research and reference which article(s) and/or podcast your responses are based on by providing the URL.
Considerations; however you may find others:
- New lender types and number of new lenders/brokers.
- Discuss new or changed legislative or regulatory policies that impact the finance broking industry.
UNIT – FNSPRM613 Grow financial practices
STUDENT INSTRUCTIONS
Your Action and Monitoring Plans will be required for the final assessment in this module – Grow Your Business Skills Signoff.
Case Study Scenario
You are a finance broker working in your own business as a sole trader for the past five (5) years and offer a range of mortgage and personal finance to individuals and couples, and business owners. You have reviewed the sales figures from last year, and the breakdown of types of finance (%) settled for the business. The business has had strong results in the owner-occupied construction finance, especially for first home buyers.
You have decided that you would like to diversify and expand the business into other areas of finance, especially high net worth investors and cross promotion of products to existing clients.
The two drivers influencing these goals are:
- increased enquiries from existing clients regarding vehicle loans and
- a visit from your aggregator BDM who mentioned that investor clients are a little more astute when it comes to finance.
Your original Vision Statement
We support new home buyers and simplify the maze of government grants when buying and building.
Excerpt from the original business plan explained the vision statement
To grow the business by supporting new home buyers to acquire the most suitable finance to suit their requirements by working with professional local builders and developers. To attract government support for new home buyers and provide a range of suitable lenders who deal in construction and basic introductory loans with 100% offset facilities.
Business considerations
Your current clients have asked for assistance with consumer and business car loans. You are currently not accredited with many lenders. The return the business expects to receive for these types of loans is between $1,000 and $2,500 per client for loans in the range of $35,000 to $60,000. These clients may be attracted to variable rate loans over 5-10 years.
You have relationships with key referral partners that have ‘high net worth clients’ who already own their own homes and looking to invest in property. They have agreed to let you promote to these clients to increase interest.
Your estimated income per client is between $3,000 and $4,000 for home loan, ranging from $450,000 to $600,000. These buyers may be attracted to fixed rate, interest only loans. You have agreed to pay your referral partners 15% of the commission received.
*NB These figures are purely fictitious and not indicative of the commissions you would earn as broker. There are many other considerations when calculating income from brokerage.
Task 1 – Investment Property Finance
Create promotional strategies in line with your growth goals
| Considerations in line with your relevant growth goals: | |
| People | Your target market for each promotional strategy identified in your Marketing Plan. |
| Promotion | What promotional tool/materials are you going to use to reach your target clients? print advertising, giveaways, displays etc. How are you going to reach them? online advertising, mail-outs, media releases, events, website, blog/social media |
| Place | Consider where your clients are situated in location to your office/you Where will the promotion take place in what area? |
| Products | Think about what products may be relevant to your target market. |
- Your promotional plan – complete the template below.
| People |
| Research two products you are going to promote. Include: lender nameproduct name interest rates (comparison rate must be included) |
| Promotional tools |
| Promotional activities |
| Create your branding statement to attract your target market. What is your unique selling proposition? |
| What is the date for delivery/ implementation? |
- Research and compare two (2) mortgage products.
- Refer to assist you in completing product comparisons.
- Provide the URL and insert a screenshot of the product pages to show the evidence that your research aligns with your target market.
- Budgeting and Return on Investment (ROI)
Use the expected income per target client and work out the expected return from your promotional activity. The remainder of your figures for this exercise will be assumptive and based on your own research but should be verifiable by the research you conducted on the products.
Considerations
- When preparing a budget, you must consider all associated costs i.e. people, technology, supplies, suppliers, cost per click/lead (social media) etc.
- When estimating a % of interest, you should research and consider what is appropriate for the type of promotional activity you are completing.
- What would be your conversion rate from % of interest? Remember: not all clients that show interest in your promotion will take up your offer.
- When estimating the yield you will need to consider what income you would earn from each client after you have paid any commissions for referrals – refer to the case study (as a new broker you will not know these figures until you start your business)
- Return on investment (ROI) – this is a highly important factor in understanding the success of your marketing and whether it will be worth the effort. It forms part of your growth projections.
| Budget | |
| % of interest | |
| Conversion rate | |
| Yield per client | |
| ROI |
- Create an action plan that outlines the tasks involved in the delivery of your promotional activity.
Each task will have several steps – for instance, creating a brochure requires designing, writing, formatting, printing, marketing software communication channel you might use, etc.
The table has allowed for 6 steps, you may add to this if necessary or if you can reasonably do the task in less steps this is also acceptable, however it is expected there will be a minimum of 4 steps as shown in the example provided above.
| ACTION PLAN | ||||||
| No. | Task | Steps involved for this task | Resources Required e.g. software, supplier etc | Who or which support is required | Start date | Finish date |
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 6 |
- Monitoring your plan
Keeping track of the progress of your promotional plan is completed over a period of time, between your start date and end date. Think about your dates and where you see your promotion at each stage and complete the Monitoring Plan template below. Also, use the links provided in the Learning Guide to further research methods on monitoring your market plan.
Consider:
- Remember, your dates need to align with your start date and the last check in should be before your end date. For the purpose of this exercise, we have added three check points (you may have more than this with regard to some marketing activities when they happen ‘in real life’ or IRL).
- Monitoring methods to determine you are on target to achieve your success indicators % of interest and ROI:
- how you would check the progress of a social media ad campaign to determine your monitoring process, i.e. key metric; review sales figures a month after the promotion. Please note there are many more ways and it is expected that you provide other methods as well.
| MONITORING PLAN | |||
| Stages | Review Date | Proposed monitoring method | Anticipated results for promotional period |
| First check in | |||
| Next check in | |||
| Final check in |
Task 2 – Vehicle Finance
Create promotional strategies in line with your growth goals
| Considerations in line with your relevant growth goals: | |
| People | Your target market for each promotional strategy identified in your Marketing Plan. |
| Promotion | What promotional tool/materials are you going to use to reach your target clients? print advertising, giveaways, displays etc. How are you going to reach them? online advertising, mail-outs, media releases, events, website, blog/social media |
| Place | Consider where your clients are situated in location to your office/you Where will the promotion take place in what area? |
| Products | Think about what products may be relevant to your target market. |
- Your promotional plan – complete the template below.
| People |
| Research two products you are going to promote. Include: lender nameproduct name interest rates (comparison rate must be included) |
| Promotional tools |
| Promotional activities |
| Create your branding statement to attract your target market. What is your unique selling proposition? |
| What is the date for delivery/ implementation? |
- Research and compare two (2) vehicle products.
- Refer to https://www.canstar.com.au to assist you in completing product comparisons.
- Provide the URL and insert a screenshot of the product pages to provide the evidence that your research aligns with your target market.
- Budgeting and Return on Investment (ROI)
Use the expected income per target client and work out the expected return from your promotional activity. The remainder of your figures for this exercise will be assumptive and based on your own research but should be verifiable by the research you conducted on the products.
Considerations
- When preparing a budget, you must consider all associated costs i.e. people, technology, supplies, suppliers, cost per click/lead (social media) etc.
- When estimating a % of interest, you should research and consider what is appropriate for the type of promotional activity you are completing.
- What would be your conversion rate from % of interest? Remember: not all clients that show interest in your promotion will take up your offer.
- Return on investment (ROI) – this is a highly important factor in understanding the success of your marketing and whether it will be worth the effort. It forms part of your growth projections.
| Budget | |
| % of interest | |
| Conversion rate | |
| Yield per client | |
| ROI |
- Create an action plan that outlines the tasks involved in the delivery of your promotional activity.
Each task will have several steps – for instance, creating a brochure requires designing, writing, formatting, printing, marketing software communication channel you might use, etc.
The table has allowed for 6 steps, you may add to this if necessary or if you can reasonably do the task in less steps this is also acceptable, however it is expected there will be a minimum of 4 steps as shown in the example provided above.
| ACTION PLAN | ||||||
| No. | Task | Steps involved for this task | Resources Required e.g. software, supplier etc | Who or which support is required | Start date | Finish date |
| 1 | ||||||
| 2 | ||||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 6 |
- Monitoring your plan
Keeping track of the progress of your promotional plan is completed over a period of time, between your start date and end date. Think about your dates and where you see your promotion at each stage and complete the Monitoring Plan template below. Also, use the links provided in the Learning Guide to further research methods on monitoring your market plan.
Consider:
- Remember, your dates need to align with your start date and the last check in should be before your end date. For the purpose of this exercise, we have added three check points (you may have more than this with regard to some marketing activities when they happen ‘in real life’ or IRL).
- Monitoring methods to determine you are on target to achieve your success indicators % of interest and ROI:
- how you would check the progress of a social media ad campaign to determine your monitoring process, i.e. key metrics; review sales figures a month after the promotion. Please note there are many more ways and it is expected that you provide other methods as well.
| MONITORING PLAN | |||
| Stages | Review Date | Proposed monitoring method | Anticipated results for promotional period |
| First check in | |||
| Next check in | |||
| Final check in |
- UNIT – FNSCUS511 Develop and maintain professional relationships in financial services industry
Task 1 – Establishing referral relationships
- We have listed the types of networks you’ll need to connect with to grow your business; internal, external and personal. You need to identify who the people, professionals, businesses are within these network types and explain how you can find them and what benefits they can bring to your business.
Complete the table below to identify the personal and professional networks and contacts that will assist you in driving new business.
- List a minimum of four (4) types of individuals and/or professionals for each section:
- List a minimum of one (1) way to connect with each of your identified contacts
- List a minimum of one (1) way that each of your identified contacts can benefit you and your business. You need to be specific with your answer as they help you in different ways.
- internal – 1 way that each of the 4 types can benefit you and your business
- external – 1 way that each of the 4 types can benefit you and your business
- personal – 1 way that each of the 4 types can benefit you and your business
| Network Type | Types of individuals and/or professionals | Ways to connect | Benefits your business |
| Internal | |||
| External | |||
| Personal | |||
Click the link, download RG203 and read from ‘Mere referrals RG 203.115 through to Upstream Referrals RG 203.120’ ‘ASIC Regulatory Guideline RG203: Do I need a credit licence’. It explains the (5) five parameters for a referrer (the Accountant in this instance to be considered exempt from having engaged in credit activities like a licensee or credit representative when they make referrals.
Task: Write an email to Shemi, following up from your meeting. Ensure you write your email professionally, use professional introduction and sign off and address the following points:
- (all 5 requirements listed must be addressed)
Do not just copy and paste, you must write to them and explain what you have read in everyday terms so that it can be assessed that you have understood what you have read as this is the legislative foundation of having a successful referrer relationship.
- 3. Scenario: Filomena is a real estate agent who is one of your referrers. She has recommended Izzy and Eduardo approach you for a home loan, which they have done via email. They would like a particular type of product; however:
- you are not accredited to provide this product at the moment but it is a product in your aggregators panel
- you are not sure if it would actually be in their best interest financially; what are your obligations?
- they have indicated it time sensitive as they have signed a conditional contract.
Click the link to read about Best Interest Duty ASIC Regulatory Guide RG273, specifically the information and examples provided in the “Range of credit providers and products” section.
b) Scenario: This is the second client Filomena has sent you that you haven’t been able to help and you don’t want to lose any future business.
Task: Explain a minimum of three (3) ways you can ensure Filomena will feel confident in sending you other clients.
For Q4 you may need to refer back to your Compliance Learner Guide.
- Scenario: You have been trying to build a relationship with George, a real estate agent in your area. Your clients Apple and Moses have just received a pre-approval for a home loan and you know they are working with George to find a house. You see this as your opportunity to get a referrer arrangement over the line with George so have told him how much your clients have been pre-approved for and suggested that he show them houses in this price range. Your clients have not provided any authority to pass on their information to any external parties.
TASKS
- What two (2) aspects of the legislation and regulatory guidelines have been breached in this scenario?
Scenario: George has let it slip to Apple and Moses that he is are aware of the pre-approval amount. Apple and Moses have now lodged a complaint with you which you haven’t been able to settle with them.
- What four (4) steps happen next?
- Legally, this situation can damage your business reputation; how else could Apple and Moses damage your reputation?
Task 2 – Business Practices
Adhering to social, business and ethical standards is important for a business to both develop and secure positive referrer relationships. For a Finance Broker, these standards could be acting in the best interests of the client, codes of conduct, or your own set of organisational standards determined by your Aggregator’s or Lenders policies. In Section 2 of the Professional Relationships Learner Guide we explore ways to develop and secure positive relationships by applying ethical and professional business standards.
- Explain in your own words how to apply the following three standards in your business:
- Keeping up to date and knowledgeable – List three (3) areas to keep up to date that will protect and benefit your business:
- Always thinking about ways that you can help others; List two (2) ways for each of the following connections.
| Network client |
| Network professional |
- Being professional, trustworthy, timely and reliable; List a minimum of four (4) ways you can demonstrate these qualities:
- You recently met with the owner of 2XE Financial Planning. You have both agreed that due to your very similar business and ethical standards, that you would like to proceed with a formal referral arrangement. Remember to refer to your Learner Guide to assist you in your answer.
- List a minimum of three (3) aspects of your proposed referrer arrangement will you need to negotiate.
- Using the Referral Agreement example in the Learner Guide, list five (5) pieces of information you will need from the referrer to set up a referrer agreement.
- Provide a minimum of five (5) ways you can promote your business through existing business networks.
| You can use networks to promote and market your organisation by: |
- It will be imperative in your business to review your business practices to ensure you are maintaining positive and beneficial relationships.
Describe a minimum of three (3) practices you could implement to improve how you interact with your networks.
- Communication is key for a finance broker. Answer the following questions about how the industry communicates with you.
- How do the lenders you’re accredited with, communicate with you?
- List six (6) ways your Aggregator BDM works with you.
- When you join an industry body you will have a membership with them and have your own member portal. List three (3) ways they will engage with you.
- Create an ‘elevator pitch’ you could use at a local sports club your child is playing at. Follow the guidance in your Learner Guide.
- Note how long it should take to recite it out loud – there is a maximum time recommended and you are to stick with that.
- There are also three (3) aspects/points to include in your pitch, what are they?
Task 3 – Expanding your reputation
Your Mentor has made two suggestions:
a) What is the current trend of the highest volume of borrowing type?
| Owner – Purchase | Owner – Refinance | Investor – Purchase | Investor – Refinance |
Answer:
b) Based on the fixed interest rate owner occupied graph, which term has risen the least since 2021?
Answer:
- www.canstar.com.au. Base your finding on $500k loan for the state you live in and complete the following table and ensure you provide a screenshot of each Lender.
Screen print/shot must show:
You must provide a screenshot to support your loan product choices, otherwise your assessor will return your work to you and request a resubmission with the Canstar evidence, if this happens and Canstar product options have changed, then you will need to redo the table showing the information that supports the screenshot.
| LOAN PRODUCT 1 | LOAN PRODUCT 2 | |
| Lender Name | ||
| Product Name | ||
| Features and fees | ||
| Interest Rate | ||
| Comparison Rate |
Recommend a specific business practice you can incorporate as a broker that has been recommended to the banks.
Encourage them to work out which of their clients would benefit from this information and refer them to you.
Ensure you incorporate the following along with persuasive writing:
UNITS – FNSRSK511 Undertake risk identification & FNSRSK512 Assess risk
IMPORTANT INSTRUCTIONS
- Your answers to each of the tasks are to be typed into this document or supplied electronically and uploaded.
Task 1 – Short answer questions
| RISK TERMS | MATCH RISK TERM TO DEFINITION | DEFINITION | ||
| Low Risk | A | A = | 1 | The result of an adverse event occurring |
| Likelihood | B | B = | 2 | It is almost certain the event may occur |
| Extreme Risk | C | C = | 3 | The chance of an adverse event occuring |
| Consequence | D | D = | 4 | It is rare that the event may occur |
| Moderate Risk | E | E = | 5 | It is possible the event may occur |
b) Tick the two (2) risk terms explanations that are correct.
| Definition of risk terms | Tick only the correct ones |
| Rare is an event which may occur and is a component of the risk ranking when we look at a ‘Risk Analysis Matrix’. | ☐ |
| Possible is the event which might occur and is a component of the risk ranking called likelihood when we look at a ‘Risk Analysis Matrix’ | ☐ |
| Unlikely means the event could occur and is a component of the risk ranking when we look at a ‘Risk Analysis Matrix’. | ☐ |
| Actions that result of a likely risk to occur is a consequence and not a risk ranking when we look at a ‘Risk Analysis Matrix’ | ☐ |
| Almost certain the event may occur and is a component of the risk ranking when we look at a ‘Risk Analysis Matrix’ | ☐ |
| Risk Management Principle | Match | Explanation of Risk Management Principle | ||
| 1 | Integrated | 1 = | A | Risk management is continually improved through learning and experience. |
| 2 | Structured and comprehensive | 2 = | B | Human behaviour and culture significantly influence all aspects of risk management at each level and stage |
| 3 | Customised | 3 = | C | The inputs to risk management are based on historical and current information, as well as on future expectations. Risk management explicitly considers any limitations and uncertainties associated with such information and expectations. Information should be timely, clear, and available to relevant stakeholders. |
| 4 | Inclusive | 4 = | D | Risks can emerge, change, or disappear as an organisation’s external and internal context changes. Risk management anticipates, detects, acknowledges, and responds to those changes and events appropriately and timely |
| 5 | Dynamic | 5 = | E | Appropriate and timely involvement of stakeholders enables their knowledge, views and perceptions to be considered. This results in improved awareness and informed risk management |
| 6 | Best available information | 6 = | F | The risk management framework and process are customised and proportionate to the organisation’s external and internal context related to its objectives |
| 7 | Human and cultural factors | 7 = | G | A structured and comprehensive approach to risk management contributes to consistent and comparable results. |
| 8 | Continual improvement | 8 = | H | Risk management is an integral part of all organisational activities. |
Task 2 – Case study 1
There are number of tools we can use to support an accurate risk assessment. Following are two (2) tools that are used in relation to risks:
- Risk Register
- Risk Control Plan
| RISK REGISTER | RISK CONTROL PLAN |
☐ Risk Register
☐ Risk Control Plan
| RISK REGISTER | RISK CONTROL PLAN |
PART 1A – RISK REGISTER
Michael and Samantha Jones have operated and owned ‘Broker Finance Pty Ltd’ for the last five (5) years as an ACL holder. They currently have three brokers that work in the business, Bill Mason is the most recent to the business and three administration support staff.
Michael and Samantha have recently completed an internal audit of files and noticed a breach by Bill Mason. It appears a systematic issue was established within the software that did not pick up the commission being charged which should be in the credit proposal. Michael and Samantha noted that all of Bill’s mortgage loan applications had this critical item missing and he had not alerted them.
Use the Risk Register below to identify, rate, and describe five (5) risks to the business arising from this breach and one (1) risk to the client.
Note: The Risk Register table in the Learner Guide lists business/ACL, financial, competitive and client risks. However for this assessment task, we only require the business/ACL and client risks to be completed.
| RISK ANALYSIS MATRIX | |||||
| Likelihood (L) | Consequence (C) | ||||
| Insignificant 1 | Minor 2 | Moderate 3 | Major 4 | Catastrophic 5 | |
| 5 – Almost Certain | 5 | 10 | 15 | 20 | 25 |
| 4 – Likely | 4 | 8 | 12 | 16 | 20 |
| 3 – Possible | 3 | 6 | 9 | 12 | 15 |
| 2 – Unlikely | 2 | 4 | 6 | 8 | 10 |
| 1 – Rare | 1 | 2 | 3 | 4 | 5 |
| RANKING KEY | ||
| Ranking | Risk | Required Action |
| 20 – 25 | Extreme risk | Licensee/stakeholder Action required |
| 13 – 19 | High risk | Senior management Attention required |
| 6 – 12 | Moderate risk | Management responsibility must be specified |
| 1 – 5 | Low risk | Manage by routine procedures |
| Risk Register | L | C | Risk Rating (LxC) | Comments |
| Business/ACL risks | ||||
| Client | ||||
PART 1B – ACTION PLAN
As an ACL holder, Michael and Samantha have established that this breach is major, and an expert specialist is required to address the compliance and operational risk management process. They have engaged Scott from Sales-Key who specialises in the field of NCCP compliance matters and risk management. Scott has recommended that Bill be placed under a 6-month undertaking whereby his documentation and pre-submission loan applications will be vetted to ensure accuracy.
Scott has organised an appointment with Michael, Samantha and Bill (broker) at the office to address this breach.
In this part of the case study complete the following Action Plan as if you were Scott. Select the two (2) highest business/ACL risks and the client risk from the risk register in Part A and develop an action plan for dealing with these risks. Consider all of the members in the business and how they may play a role in the various areas listed in the plan.
Remember a preventative action is one that should stop the risk from occurring, and corrective actions need to be considered to stop the risk from happening again. Monitoring and review actions are important to ensure that the business is regularly checking their processes to prevent reoccurrences of the risk.
Instructions
You must take the highest rating risk out of the five (5) listed and rated in Part A of the Risk Register and complete the Action Plan template.
- All sections of the Action Plan are to be completed
- Note the appropriate Act and Regulatory Guide for mortgage broking
- A minimum of two (2) responses is required in each option under the following sections:
- Preventative Actions
- Corrective Actions
- Training – 2 strategies
- Operational – 2 strategies
- Managerial – 2 strategies
- Resource requirements – 2 strategies
- Responsibilities – 2 strategies
- A minimum of four (4) responses is required in the Monitoring and Review Actions section:
- 2 responses for monitoring – ensure you read the Case Study scenario carefully to find a clue to one of the mandatory monitoring requirements.
- 2 responses for review
| ACTION PLAN | |||
| Risk Item no | Describe risk item | ||
| Responsible area | |||
| Initial assessment | Likelihood | Consequence | Rating |
| PREVENTATIVE ACTIONS | |||
| Training – Note the roles that internal and external stakeholders play | |||
| Operational | |||
| Managerial | |||
| Resource requirements | |||
| Responsibilities | |||
| Legislative | |||
| CORRECTIVE ACTIONS | |||
| Training – Note the roles that internal and external stakeholders play | |||
| Operational | |||
| Managerial | |||
| Resource requirements | |||
| Responsibilities | |||
| MONITORING & REVIEW ACTIONS | |||
Task 3 – Case Study 2 – Client’s franchise opportunity risks
Scenario
You have an existing finance broking business which has grown over time. The business has several key staff members including:
You are just about to meet a new client that has previously approached you about wanting to expand his business operations into a franchise opportunity and, while he has not had his financials prepared by his accountant for the last two years, he wants to use the family home as security and obtain a loan. The client also informs you that he has a fair bit of cash available to assist in meeting the repayments if required.
PART 2A – RISK REGISTER
Use the Risk Register below to identify and describe (3) three potential risks to your business and (1) one risk to the client arising from this proposal. Remember, when identifying risk you need to consider both what can go wrong and how it can go wrong.
Note: The Risk Register table in the learner guide lists business/ACL, financial, competitive and client risks. However for this assessment task, we only require the business/ACL and client risks to be completed.
| RISK ANALYSIS MATRIX | |||||
| Likelihood | Consequence | ||||
| Insignificant 1 | Minor 2 | Moderate 3 | Major 4 | Catastrophic 5 | |
| 5 – Almost Certain | 5 | 10 | 15 | 20 | 25 |
| 4 – Likely | 4 | 8 | 12 | 16 | 20 |
| 3 – Possible | 3 | 6 | 9 | 12 | 15 |
| 2 – Unlikely | 2 | 4 | 6 | 8 | 10 |
| 1 – Rare | 1 | 2 | 3 | 4 | 5 |
| RANKING KEY | ||
| Ranking | Risk | Required Action |
| 20 – 25 | Extreme risk | Licensee/stakeholder Action required |
| 13 – 19 | High risk | Senior management Attention required |
| 6 – 12 | Moderate risk | Management responsibility must be specified |
| 1 – 5 | Low risk | Manage by routine procedures |
| Risk Register | L | C | Risk Rating (LxC) | Comments |
| Business/ACL risks | ||||
PART 2B – ACTION PLAN
Using the Risk Register in Part 2A complete the following Action Plan template. Select one of the risks from the Risk Register and develop an action plan for dealing with this risk. Consider all the members in your business (seven including yourself) and how they may play a role in the various areas listed in the plan. Remember a preventative action is one that should stop the risk from occurring and corrective actions need to be considered after the risk has occurred to stop it from happening again. Monitoring, tolerance and review actions are important to ensure that the business is regularly checking their processes to prevent reoccurrences of the risk.
Student Instructions
You must take the highest rating risk out of the (3) three listed and rated in Part A of the Risk Register and complete the Action Plan template.
| ACTION PLAN | |||
| Risk Item no | Describe risk item | ||
| Responsible area | |||
| Initial assessment | Likelihood | Consequence | Rating |
| PREVENTATIVE ACTIONS | |||
| Training – Note the roles that internal and external stakeholders play | |||
| Operational | |||
| Managerial | |||
| Resource requirements | |||
| Responsibilities | |||
| CORRECTIVE ACTIONS | |||
| Training – Note the roles that internal and external stakeholders play | |||
| Operational | |||
| Managerial | |||
| Resource requirements | |||
| Responsibilities | |||
| MONITORING & REVIEW ACTIONS | |||
You have just completed Case Study 1 Parts 1A and 1B, in which you identified the risks and created an Action Plan in relation to Bill Masons’ compliance breach.
In your final assessment (Risk Role Play), you will be playing either Michael or Samantha (whose company is Finance Broking P/L) and you are the ACL holder. To address a minimum of two (2) staff members in the role play, you will need to create a presentation to discuss all aspects of the compliance issue, including the procedures required moving forward as a refresher training session.
It is estimated that the role play will take 10 – 20mins to present the refresher training to Bill and Scott. You will be able to use this presentation as your guide/script during the role play to verbally address all the requirements which are listed below.
In essence, your presentation to a minimum of two (2) staff members needs to match the requirements below as this is what you will be assessed on in both this assessment and the upcoming role play.
Your presentation layout must be clear, orderly and professional – keeping in mind it would be something you can use in your own business moving forward.
Use the Risk Register completed in Case Study 1A and:
Use the Action Plan completed in Case Study 1B and:
If you are using people in your role play that have no industry knowledge, ensure you have written your questions out along with a script for “Bill” and “Scott”, so they answer you appropriately. This will further demonstrate your own knowledge.
Upload your presentation – it can be in Word format, PDF, or PowerPoint. Keep a copy for the final Risk Role Play assessment.
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