Financial Services Business Skills Assignment

Assignment Task

 Key terms

Working in the finance industry requires you to have an understanding of the terminology used and the names of documentation that you will deal with.

Demonstrate your understanding of some of the common terms and document names by completing the following tables:

Question 1

(a)In your own words, complete the table below; define and explain loan transaction terminology and definitions of the following

(b)In your own words, complete the table below; define and explain the documentation used by lenders

(c)In your own words, complete the below describe

• The negotiation process
• Customer Relationship Management (CRM) tool
• Certificate of Currency

The Australian financial market

The state of the economy and financial markets affects elements of lending, such as interest rates; and also has an impact on consumers’ attitudes to borrowing and debt.

The Reserve Bank of Australia (RBA) is Australia’s central bank and is responsible for monetary policy, financial and payment system policies, and other financial matters.

Question 1

Research the RBA website and answer the following questions:

(a)List the three (3) statutory objectives (key elements) the RBA sets out to achieve.

The RBA meet on the first Tuesday of each month to review the cash rate.

(b)Name three (3) things relevant to a mortgage broker’s role upon which the cash rate impacts.

 Financial services legislation and industry codes of practice

Question 1

Conduct some research to identify websites that you could use to keep up to date with regulatory changes and changes in codes of practice in the mortgage broking industry.

Complete the table below with the following information:

• Two (2) Regulations/Legislations and two (2) codes of practice with which you must keep up to date.
• For both, provide the website name and URL address, and explain how these websites are helpful for keeping up to date with changes.

Question 2

List two (2) risks and the consequences that are associated with not complying with the NCCP Act.

Question 3

In your own words, describe the key features of the Privacy Act 1988.

Question 4

(a)In your own words, describe the key features and the purpose of codes of practice.

(b)Provide one (1) example of how a code of practice would be implemented into a work situation for a mortgage broker.

Question 5

(a)In your own words describe best interests duty.

(b)Provide one (1) example of how the best interests duty would be implemented into a work situation for a mortgage broker.

Question 6

(a)How would you communicate changes in regulation, legislation, or codes of practice to your colleagues?

(b) Explain how you would execute changes to your organisation’s policy, procedures and practices to ensure that you are meeting the changes (for example, the introduction of best interests duty).

 Question 7

If you were unsure of how to apply any regulation, legislation or codes of practice to your role or interaction with a client, explain what you would do.

Question 8

Remaining compliant with financial services regulation and industry codes of practice is vital.
One way to make sure compliance is being met is through monitoring or internal audits.

You have been asked by your manager to implement an internal monitoring/audit process for your mortgage broking firm to ensure that the credit representatives are meeting their obligations with regulation, legislation and codes of practice.

Outline the monitoring/audit process that you have implemented to ensure compliance. You should include the following:

• How you will monitor/audit compliance.
• Who will undertake the monitoring/audit process.
• What tools you will use.
• How or where you will record the outcomes.

 Question 9

Information provided by clients and documentation prepared by brokers need to be retained by financial services organisations. Detail what information needs to be retained, where it is stored and why it needs to be retained.

Products and services

The financial services industry is very competitive, with many organisations offering a number of different lending and transactional products and services.

Organisations use a variety of approaches to market and promote their products and services.

It is very important that brokers are able to determine the right product and service to meet the needs and requirements of their clients.

Some clients like to be able to combine their lending products with other banking products and services. While it is important to have a thorough knowledge of lending products, it is also important to be able to identify other relevant products and services to accommodate your client’s needs and requirements.

Question 1

Using the information in the topic notes in conjunction with your own research, complete the product knowledge table below.

Question 2

Conduct your own research on current home loan industry trends. Provide a minimum of three (3) current trends.

Question 3

(a) How do financial service providers market and/or promote their products and services?

(b) Where can you locate a lending organisation’s current promotions and specials?

(c) Describe how you would identify clients in the CRM whose needs match products and services that are part of a current promotional strategy.

(d) Describe how you can keep your product knowledge up to date. Include the methods and/or systems you could use to maintain product knowledge.

Question 4

The Australian Banking Association’s (ABA) Banking Code of Practice (BCOP) outlines several obligations for the provision of financial products and services. The Code can be downloaded from the ABA website.

(a) List at least two (2) items of information that must be provided to a client when providing financial products and services.

(b)Refer to the items you listed in part (a) and explain what the items clearly set out.

(c)What four (4) factors does the Code advise about providing banking services to vulnerable clients?

(d)According to the BCOP, how would you identify (become aware of) a potentially vulnerable client and a client on a low-income?

Question 5

What is a deposit bond and when would it be suitable for a purchaser to use this product?

Effective communication

Communication is vital in all interactions, particularly for successful team and client relationships in business.

Answer the following questions using the information from the topic notes in conjunction with your own research.

Question 1

List a minimum of four (4) types of communication skills and explain why each is important for effective business communication.

Question 2

(a)Explain why listening is so important for effective communication.

(b)List three (3) barriers to effective listening

Question 3

List five (5) tips to help someone communicate more effectively with different types of clients

 Professional development

Refer to the business profile for Capital City Finance and Mortgage Brokers (CCF & MB) located in the subject room.

For this task you are to assume you are a mortgage consultant with the CCF & MB team.

Your manager has gone on extended leave and you have been given the task to step up into their role for that period. You are responsible for the performance and development of yourself and your team. You also have a new team member starting in your organisation. It is now your responsibility to ensure that they are provided with the correct information and support to ensure they have the best opportunity to succeed in your organisation.

You will be required to explain a number of items to your team, as well as support and guide them to maintain their performance and professional development during this time.

Question 1

(a)Explain why is it important for individual work goals to align to the organisation’s goals?

(b)Identify the types of organisational framework that you can refer to when planning your own and your team’s work goals to ensure that they align to the organisation’s goals.

(c)List the colleagues you would consult with if you required clarification of your own role responsibilities and how they fit into the wider organisation’s goals and objectives.

Question 2

(a)Where would you document the new team member’s role responsibilities?

(b)How will you outline and document their role-specific targets?

(c)Explain how you will support the new team member to set goals to ensure they will achieve their targets.

(d)Describe how you can use technology to help you manage the team’s work priorities.

 Question 3

What guidance can you provide the new team member to keep up to date with industry and product knowledge? Provide a minimum of four (4) tips.

Question 4

(a)Describe how you can encourage and facilitate personal and professional development for you and your team?

(b)How can you record and document you and your team’s personal and professional development goals?

(c)Explain the human resources policy and procedure at CCF & MB regarding the attendance of professional development seminars, webinars and offsite development workshops.

Question 5

(a) Describe how can you identify team health and wellbeing in the workplace.

(b) What strategies might you put into place to manage team health and wellbeing in your workplace?

Question 6

Part of your role requires you to monitor and measure your own performance.

(a)Complete the annual targets in your scorecard. (You may need to conduct some research for realistic targets ―there is an example Scorecard located in the Business Profile for CCF & MB)

(b)Complete the actual results up to Quarter 3. You notice you are behind in two Key Performance Indicators (KPIs). Record the results in the Scorecard below.

(c) Draft an email to your team leader:

(I)Include your results compared against the last quarter.

(ii) Include a self-assessment of your performance.

(iii) Seek feedback from your team leader of steps that you can take to improve your work performance and meet your targets.

Question 7

Improving your own work performance requires both self-assessment and seeking feedback from others.

(a)Describe how you monitor and update your own performance against your scorecard.

(b)To improve your own personal performance, how should you approach the feedback you receive from others?

(c)When reviewing your performance against your colleagues/workgroup, describe the different methods you can use to analyse and interpret feedback from others.

(d)When communicating with people from different cultures, identify what barriers you need to overcome to ensure you meet your personal responsibilities?

Question 8

(a)You are required to create a professional development plan (PDP).
 Your PDP must include the following, namely:

• the two (2) KPIs from your scorecard for which you are behind as at Quarter 3.
• a goal for each of those KPIs to ensure you will achieve them by Quarter 4.
• the steps/actions you will take to achieve the goals.
• two (2) professional development areas that you would like to improve
• two (2) formal training or continuous professional development activities that relate to the industry (refer to industry associations for ideas).
• the minimum amount of CPD points you would need to maintain if you were a Mortgage and Finance Association of Australia (MFAA) member holding ‘loan writer’ status

(b)Once you have completed your professional development plan, who will you seek feedback from on the plan?

Question 9

Now that you have developed your own PDP, prepare two (2) other PDPs, each containing a minimum of two (2) development areas, for the following staff members:

(a)a loans administrative officer

(b)a mortgage broker who has recently joined the team.

Question 10

Managing your time is vital to being able to juggle all of your work tasks, professional development and personal life. Refer to the information provided in the topic notes as well as conduct your own research regarding the ‘important/urgent’ matrix.

There are many short videos available — for example, the Eisenhower matrix: How to manage your tasks with Eisenhower, [online video], viewed 10 November 2022, .

(a)Make a list of a minimum of twelve (12) tasks and activities a mortgage broker (or mortgage consultant) would need to complete in their role. This should include anything that requires your time — for example, team meetings, emails, personal emails, making a coffee, processing your work, training etc.

Question 10

(b)Once you have listed your job tasks above (from part a), place each task in the appropriate quadrant.

Customer service

Customer service is integral to the success of any organisation and regardless of industry, customers are placed at the core of everything businesses do. Therefore, being clear on your organisation’s customer service standards is critical to ensure that the service you and your team provide is in line with its culture and expectations.

Organisations establish customer service systems to ensure there is a consistently high standard of service for customers from end to end, across all departments, involving all team members, and at every touchpoint their customers have with their organisation.

It is important that the customer service system is continually monitored and reviewed to ensure that the system remains effective.

For the following questions, reflect on your current or past organisation or conduct research to explain how businesses approach gathering, monitoring and acting on feedback from internal and external customers. Then answer the following questions.

 Question 1

List and explain three (3) processes that a business can use to gather feedback from its clients?

Question 2

Feedback is very important for a business to understand that the products and service that they provide to their clients meets the expectations of the clients.

The feedback from the quarterly customer survey on the service and products provided has been received by the business.

There are six (6) responses of feedback received:

1. ‘The broker was really helpful and responded quickly to my emails. They were very personable and professional’: Sam Welsh
2. ‘I left a message on their message bank on Thursday night, leaving my details to be contacted the next day. I didn’t get a response call until the following Thursday, I really couldn’t wait that long as I had found a property and went elsewhere’: Anh Nam
3. ‘No one responded my calls in a timely manner, it was always two to three days later’: Mario Taranto
4. ‘I sent an email on the Friday and still did not have a response by the following Friday, I wasn’t very happy with that’: Aya Farid
5. ‘I sent through a couple of emails with questions that I had regarding my loan application. The response I received was not what I was expecting — very unprofessional’: Yarran Danggetti
6. ‘I am really happy with the products recommended to meet my needs for a home loan’: Dan Wong

It is important to record and action this feedback.

Part 1

The feedback is to be recorded in the client files.

(a)Select three (3) responses from above and record these details in the table below, including what actions you would take.

(b) How would you confirm that the client’s expectations have been met in response to their feedback?

Part 2

(a)Referring to the areas of concern in the survey responses above, write a customer service improvement report including:

• three (3) areas where customer service can be improved. (What)
• a minimum of two (2) actions that would be required to implement the improvements. (How)
• a list of the stakeholders that would need to be consulted to implement the improvement, and an explanation of how you would communicate this with the stakeholders. (Who)

(b)Write an email to a stakeholder identified in the table below explaining your recommendation and how it will improve the area of customer service. 

Question 3

(a)How can you and your team monitor the level of customer satisfaction in your workplace in line with the service standards set?

(b)Provide two (2) suggestions for ensuring that team members are accountable for the customer service standards in the workplace.

Respond and report on complaints

 Question 1

Refer to the Toolbox in your subject room for Policies and Procedures and links regarding handling complaints and disputes, and respond to the following questions based on those documents:

(a) Who should a client refer their complaint to in the first instance?

(b)In accordance with the Banking Code of Practice, if a provider of financial products and services is unable to provide a resolution within 30 days, what are the five (5) steps they must take?

Question 2

Consider the following scenario.

Mr Joseph Harper, a new customer, has called your office and has complained about the time it is taking to receive a decision on his loan application, which was submitted 10 days ago.

The average turnaround time with the lender Joseph has applied to for a loan is 14 working days. Additionally, the loan requires lenders mortgage insurance (LMI), which could add a further two days to the assessment time frame.

The client is getting anxious as he has made an offer on a property subject to finance. There is only 14 days from date of offer to confirm finance approval before the property will go back on the market, so he is very worried he may miss out on the property.

(a)Describe the steps you will take to resolve this complaint. Include the stakeholders you will refer to in the resolution process.

(b)Describe the resolution you will communicate to Joseph.

 Sourcing new clients

Finding potential customers is necessary to ensure the stability and growth of a business.

 Question 1

(a)What communication methods can be used to source for new clients?

(b)How might your communication methods differ for prospective clients when using your existing networks?

(c) Explain how you could utilise your Networks for lead generation and grow your business.

 Question 2

Refer to the Toolbox and the ‘Guidelines when contacting potential new customers’ and answer the following questions:

(a)What are the four (4) steps you must include in your introduction when making a call to a potential new customer?

(b)Following your introduction, what important question must you ask before continuing with your call?

(c)What should you do if the person you contact, advises you that they do not wish to continue the call and they do not wish to be contacted again?

Question 3

You have made two (2) calls to potential new clients. As per the guidelines when contacting potential customers located in the Toolbox, complete the client contact register below for the following scenarios:

(a)Call 1: You made a call to Rosie Abdul. Following your introduction, Rosie agreed to continue the call. Rosie has been considering refinancing her home loan and seeking an increase to her loan so as she can renovate her kitchen. Rosie also said that the task of doing the research for different lenders seems too daunting. She is not quite ready to begin the process, but she is interested in how your brokerage could assist her. Rosie asked if you could call back in three months.

(b)Call 2: You just called Bruce O’Connor and introduced yourself and provided the purpose of the call. You asked Bruce permission to proceed with the call. Bruce advised that he was not interested and did not want to receive calls from your firm in the future.

 Question 4

Refer to your contact with Rosie Abdul in Question 3. Three months has now passed, and you need to call Rosie back.

Explain how you will prepare for your next call with Rosie. Include the following:

(a) The information you will require from Rosie.

(b) The information you should provide to Rosie about how your brokerage firm can assist her and a brief outline of the application process.

 Question 5

Refer to the Toolbox for the link to the following article in Industry information — useful links:
‘15 Creative Ways to Acquire New Clients’.

Explain the key points to acquiring new clients.

Professional networks

You build on your network base each day at work as you interact with your colleagues, and internal and external stakeholders. You even build networks in your social life.

Networks and professional connections are important as they can be helpful in building on your industry knowledge, your career development and also to grow your business.

 Question 1

(a)Identify and make a comprehensive list (minimum of ten (10) internal and external networks). This can include networking groups and/or associations.

List people by their role rather than their names — if you are not currently working, you can list the networks you would have in a mortgage broker role.

(b)From the list you created in part (a), choose six (6) networks. At least one (1) must be from the financial services industry and one (1) must be a third-party referrer. The others may be from any other connections. Complete the table below by outlining how your connection with these networks is of benefit to you and to the broking business.

(c)From the list in Part (b), choose three (3) connections/networks. Explain how you develop and maintain those relationships. Include how you will stay in contact and also how you will enhance the relationship to ensure it remains mutually beneficial.

(d) Identify and explain the importance of three (3) communication channels and tools that you use to develop and maintain professional relationships.

 Question 2

Explain how you will maintain policy, regulations and codes of practice when networking to promote your business and enhance its reputation. Include how you would present yourself, communicate and maintain client confidentiality.

Question 3

(a)Identify two (2) practices that could be implemented to improve business practices when it comes to developing and maintaining networks.

(b)Explain which personnel you would involve in reviewing your network connections to ensure that they are appropriate for your business’ needs and why you would involve them.

Managing information

Working as a broker in the financial services industry can involve working for a large or small organisation. A comprehensive understanding of the organisation’s structure, management, processes and policies is vital for success.

Refer to the Capital City Finance and Mortgage Brokers (CCF & MB) — Future developments, Business profile located in the subject room.

CCF & MB have hired a new sales team member, and you are responsible for completing the induction program.

 Question 1

Briefly explain how CCF & MB access information regarding updates to products and services in their system.

 Question 2

Managing information in a mortgage broking firm may also apply to maintaining and upkeeping compliance and licences. Refer to the Australian Securities and Investment Commission’s (ASIC) website to answer the following question.

Australian credit licence holders are required to complete an Annual Compliance Certificate and lodge it with ASIC.

 Understanding the client’s needs

Brokers have both ethical and legislative obligations to understand both a client and a potential client’s needs and objectives. There are obligations for making reasonable inquiries and verifications under NCCPs responsible lending obligations contained in ASIC’s Regulatory Guide 209 (RG209).

Research RG209.43 online and answer the following questions.

Question 1

While it is important to understand your client’s needs and objectives to ensure that you recommend a product that has all of the features and benefits they require, it is also important to understand other requirements your client may have to ensure the product recommended is ‘not unsuitable’.

(a) List at least four (4) types of ‘specific customer requirements’ your client may have.

(b) Give an example of when a product recommendation would be ‘unsuitable’.

 Question 2

When the loan is for a self-employed person, the lender will ask for financial information for the business. What are the common financial records the lender will ask for? Provide a minimum of three (3).

Question 3

(a)Explain the information that is contained in a credit report.

(b)Why it is important that the client provides all the details about their credit report to their broker at the beginning of the loan process?

(c)What are the credit provider’s obligations to the client if a loan is declined due to their credit report?

(d)What would you advise your client to do if their loan was declined due to their credit report?

Developing and presenting solutions

 Question 1

The client solution is not just about providing a product that will meet their product needs. Developing a solution for your client’s needs also involves the security or collateral that the lender will require for that loan product.

(a)List a minimum of three (3) types of assets that lenders may take as collateral to secure a loan. (This can be security for either consumer or commercial lending.)

(b)List a minimum of two (2) security documents that are required in order for the lender to have control over the asset while the loan is in place.

(c)If a director offers their home (in their personal name) as security for lending in their company name, what is the name of the security document that is required to link the asset to the loan?

(d)From time to time a client may need to offer a second property to support a loan in order to reduce the loan-value-ratio (LVR) to avoid LMI and meet lender requirements. What is this name of this practice?

 Packaging the application to send to the lender

Packaging a home loan application is detailed and requires a mortgage broker to gather documents to prepare the lending submission in accordance with the lender’s requirements.

While it is important to know what documents you will need to gather, it is also important that you understand the information contained within the documents. For example, the frequency of income,
if overtime is included.

 Question 1

(a)Explain what documents you would gather to in order to verify:

(i) a PAYG employee’s income

(ii)a self-employed person’s income

(iii) rental income for an existing investment property.

(b)Choose three (3) documents that you listed in part (i). Write one (1) question that you could ask the client to confirm you understand the information contained within each of the documents provided.

 Question 2

When submitting your client’s loan application, you also need to submit supporting documentation.

(a)Explain how you confirm that you have the correct supporting documents for your client’s loan requirements in accordance with the lender’s requirements. (e.g. If the loan application was for an investment property, think of what may be required as specific supporting documents)

(b)Explain how you check the supporting documentation for accuracy and also to ensure that the documents are in the right format and legible for the lender

Monitor the lending process

Some loan applications may require further information following submission. This often means returning to the client to obtain the information.

 Question 1

Provide one (1) example of further information a lender may request. Explain common reasons for the additional information.

Case study 1: Philip and Jennifer Brown

The case study is located in the subject room in KapLearn.

Often client meetings occur in the form of a face-to-face meeting, typically at the broker’s office or in the client’s home or workplace. As technology has developed, it has made different forms of client contact possible using software such as Zoom. Conducting online meetings has become more acceptable and can also be quite convenient for some clients.

Case study: Purchasing an owner-occupied home

It is time to prepare to meet with your first client, Philip and Jennifer Brown. As the broker, you need to consider a range of obligations when dealing with a customer. This section will consider some of these obligations.

 Question 1

You have just made an appointment over the phone to meet with Jennifer and Philip.

Prepare an email outlining the purpose of your first meeting. In the email, make sure you also cover the following points.

(a) What documents would you attach to the email?

(b) Include the following information in your email:

(i) the services, values and capacity your organisation has to offer

(ii) your background, credentials and your role as their broker

(iii) the commercial relationship that your firm has with the product providers
(i.e. the lenders on your panel).

 Question 1

From the information in Case Study 1 for Jennifer and Philip Brown, complete the following tasks.

(a) Using the client information collection tool/fact finder below, complete:

• assets and liabilities
• needs analysis
• credit representative notes
• anticipated fees and charges
• funds to complete.

Assessing the clients’ situation

Based on the information gathered in the initial client meeting with Philip and Jennifer Brown (see Case Study 1) and any other online tools used, you now need to assess the clients’ loan application, paying particular attention that you have met regulations, legislative requirements, followed industry codes of practice, and met lender credit policy.

Provide data to support your comments and conclusions.

Note: You will need to use this assessment of the clients’ needs to complete Part 2 of your
Oral Assignment.

 Question 1

Assume you have conducted your initial face-to-face meeting and have provided and sought the necessary information from your clients. Explain a minimum of three (3) regulatory and legislative requirements that you have met so far in dealing with this application. Include the documents you would have provided to the client in the initial meeting.

 Question 2

As part of assessing the clients’ situation, a broker is required to determine the approximate cost of the Lender’s Mortgage Insurance (LMI) premium.

The calculators are located in the Toolbox.

(a)Will Jennifer and Philip be required to pay LMI and why or why not?

(b) If so, what would the premium be?

(c) What two (2) options are available to borrowers to pay the LMI fee?

Question 4

Based on what they have disclosed to you, does the client have the capacity to meet the deposit and total cash contribution required for the property purchase? Explain why or why not.

 Question 4

Based on what they have disclosed to you, does the client have the capacity to meet the deposit and total cash contribution required for the property purchase? Explain why or why not.

Question 6

Prior to submitting the application, you are required to obtain a valuation on the property.

For the purposes of the assignment, the broker is to arrange the valuation of the security prior to submitting the loan application.

(a)Complete the template below and prepare a letter to instruct the valuer to conduct a valuation for Philip and Jennifer Brown.

(b) One completed and submitted, how and where would you file this for future reference?

Question 7

After considering the client's financial position, what loan amount would you recommend, and why?

Question 8

What is the likelihood that the clients will be able to meet all of their financial obligations once the loan is in place?

 Question 10

Most lenders stress test home loan repayments by adding a 3.0% buffer to the interest rate to make sure the borrower can afford the repayments over the medium term. If interest rates increased by 3.0%, what would Philip and Jennifer’s loan repayments be, and do you think they would be able to cope with the extra repayment amount?

 Question 11

(a)Identify appropriate product options you can present to the clients that may remove this interest rate risk?

(b)What advantage would this type of product provide for the customer?

Question 1

Although Philip and Jennifer (Case study 1) are looking to borrow at approximately 90% LVR, what other options may be available to them that would avoid the cost of LMI? Provide at least three (3) options.

Question 2

Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty concessions that are available in the state where Philip and Jennifer are purchasing their home. Are Philip and Jennifer eligible for any assistance? Explain why or why not? 

 Question 3

Philip and Jennifer have called to discuss an issue in relation to the product option you have proposed. They are wondering whether it would be better to fix the interest rate on their loan after having received several conflicting viewpoints from family and friends.

(a)Explain the process you would use to research and identify the various product options available to address the issue raised and still meet the needs of Philip and Jennifer.

(b)Explain to Philip and Jennifer two (2) advantages and two (2) disadvantages of fixing a loan over different fixed rate terms.

 Question 4

What other option/s can you suggest if Philip and Jennifer remain uncertain about whether to fix the rate on their loan? 

 Question 5

You want to ensure that Philip and Jennifer have all the critical insurance protections in case something unfortunate happened to one of them.

(a)What process would you follow during your discussion with the clients to ensure you have a good assessment of their needs?

(b)Explain who you should refer Philip and Jennifer to obtain advice on these types of products.

 Supporting the client to settlement

Although a broker does not participate in the settlement process, they still need to remain in touch with all of the stakeholders until the loan settles.

 Question 1

Why it is important for the broker to remain informed of developments in the lending process despite not being actively involved at every stage?

 Question 2

The application form and related documents have now been signed and forwarded to the lender for approval. Philip and Jennifer have agreed that you will keep their solicitor informed of progress if/when the loan is approved.

(a) To improve your service delivery standards and ensure you are communicating effectively with
Philip and Jennifer for the remainder of your interactions with them, you thought this was an appropriate time to review your client service standards. Refer to the ‘Example of an organisation’s policies and procedures’ document in the Toolbox under the section ‘client service standards’.
What evidence would you consider in your review of the service delivery standards?

(b) Considering organisational policy and procedure, how would you document the improvements and to whom in your organisation might you submit your review of the standards?

 Case study 2: Refinancing a home loan

One of your clients, Adib Bursal, who has used your service for several years, has referred a work colleague who is considering their options to refinance their loan. The colleague’s name is Mary Azacca.

The initial meeting with Mary was conducted over Zoom. Following the meeting, Mary forwarded basic information and documents sufficient to prepare a preliminary assessment.

 Question 1

A preliminary assessment is a document prepared by the broker and given to the borrower upon request. However, before the assessment is prepared, the broker must have a comprehensive idea of what the client requires.

To collect the information necessary to prepare a preliminary assessment, refer to Case Study 2 for Mary Azacca and complete the following tasks.

(a) Using the client information collection tool/fact finder, complete:

• assets and liabilities
• needs analysis
• anticipated fees and charges
• funds to complete.

Question 1

Before preparing the preliminary assessment, under best interest duty, you need to assess if there is a benefit to the customer by switching loans.

To determine if there is a benefit for the client you need to go to the MoneySmart website. Using the mortgage switching calculator, you need to:

(a) provide the result using the MoneySmart calculator

(b) explain if the customer will benefit from switching lenders.

The MoneySmart link can be located in the Toolbox.

 Question 2

Will Mary be required to pay LMI? Explain why or why not.

Question 3

Using the information gathered from your customer, Mary Azacca, you are required to prepare the preliminary assessment.

Part of the preparation will require you to use a home loan comparison website and use that information to prepare the preliminary assessment below.

 Question 5

Does Mary qualify for any government concessions or stamp duty reductions?
Explain why or why not.

Question 6

What other issues may impact, now or in the future, on the Mary’s ability to meet her obligations, including any possible risks?

Question 7

You are required to present your analysis and recommendations to your client. On this occasion you will make your presentation in an email. You will gather some of the information from your preliminary assessment and you will also need to include the following information.

• Provide a brief summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure).
• Provide a brief summary of the clients’ current financial position (use information from the case study).
• Give an explanation of the product options evaluated that meet their needs (you should have researched at least three (3) lenders as part of the preliminary assessment) and details of the loan features. Use the internet or, if working in the industry, internal software to do this.
• Explain the option you recommend and the reasons for the recommendation — including the loan amount, term and repayments. Explain how the recommended product meets the clients’ needs (refer to the case study)
• Invite questions from the client and respond in a follow-up email accordingly.
• Seek agreement from the client to proceed with the product recommendation.

Question 8

Mary has responded to your email asking some questions.

To: Broker 1

Broker

From: 

Re: Recommendation

Dear broker,

Thank you for providing your recommendation for the home loan product for my refinance application.

I have some questions I am hoping you can answer for me:

1. I want to open a bank account to make sure there is somewhere for any disbursement of surplus funds from the refinance settlement and also for my periodical payments to be debited from. What options do I have to apply to open a bank account?
2. What ID will I need to provide to open a new bank account?

I look forward to receiving your reply.

Thank you.

Mary Azacca

 Question 9

In the course of your interactions with Mary, you have gathered or completed a number of documents, which include, for example, the completed fact find with credit representative notes, the preliminary assessment and assorted communication with her. How and where would you file this information?

Case study: Purchasing an investment property

Ravi and Alice Patel have approached you to arrange finance to purchase an investment property. The clients have already paid the 10?posit, so you will need to act fast as they need to settle in 60 days.

Following the initial meeting, the clients have provided all of the essential documents to prepare a loan submission.

 Question 1

To commence the process, you need to enter the information collected into your aggregator’s CRM system. This will include:

(a)client information collection tool/fact finder

(b)assets and liabilities

(c)needs analysis

(d)credit representative notes

(e)anticipated fees and charges

(f)funds to complete.

Preparing a loan proposal

After completing your investigation into what loan options are available, you are ready to proceed and prepare a loan proposal for the clients Ravi and Alice.

During discussions with the clients, they have confirmed their willingness to cross-collateralise their owner‑occupied property as equity to purchase the investment property. So, you have agreed to send them an email and propose two options to finance the investment property.

Firstly, you are required to complete the credit proposal disclosure to attach to your email presentation.

Credit proposal disclosure

This document provides information on commissions and certain fees and charges the broker or other parties may receive in relation to the proposed loan or lease.

Question 1

You now need to complete a credit proposal. For this task you will need to use an online loan comparison website and to complete the template below.

Lender information: The lender is paying an upfront commission of 0.65% of the loan amount and a monthly trail based on 0.15% of the loan balance.

Question 2

Now that you’ve completed the credit proposal disclosure, you will need to write your email to the client. You must cover the following points, namely:

• a summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure)
• a brief summary of their current financial position (use information from the case study)
• your explanation of the minimum of two (2) product options evaluated that meet their needs and details of the loan features (use the internet or, if working in the industry, internal software)
• the option you recommend and the reasons for the recommendation — including the loan amount, term and repayments; explain how the recommended product meets the clients’ needs (refer to the case study); and explain why you recommend this lender.
• invite questions from the client and respond in a follow-up email accordingly
• provide a section for the client to provide you with permission to proceed.

Question 3

Ravi has responded to your email asking some questions.

To: Broker 1

Broker1

From:

Re: Recommendation

Dear broker,

Thank you for providing your recommendation for the home loan product for our refinance application. I have some questions I am hoping you can answer for us:

1. Can you please explain our rights for obtaining a written assessment.

2. Do you have to provide us with a comparison rate with your home loan product recommendations, and can you please explain the difference between the interest rate and the comparison rate?

3. We would like to negotiate the application fee or the interest rate for the product you’ve recommended.
   Can you please advise how much you can negotiate for either the interest rate or the application fee on our behalf?

Thank you and regards,

Loan contracts and security documentation

 Question 1

When checking the loan offer contracts received from the lenders, what key points should you check to ensure the documents are accurate?

 Question 2

If there is a guarantor involved, what type of professional should you recommend the client refer their loan contracts to prior to signing and why is this so important? Include which code you would be adhering to in doing so.

 Question 3

The clients have chosen to sign their contracts with you, in your capacity as a broker. Describe how you would explain the loan offer and security documentation to the client, as well as gain confirmation of their understanding of approval conditions of their finance.

 Question 4

(a) Now that the client has signed the documents, explain how you will submit the documents to the lender.

(b) Include a comprehensive list of the documents that the lender will require in order to proceed with settlement. This may also include lender-specific documents for the new loan account etc.

Question 5

Explain to your client how you will communicate with them throughout the settlement process; include the method of communication and the timeframes.

 Question 6

You have just received a call from the lender to advise the documents have been executed correctly. Describe how you will notify the client.

Preparing the loan for settlement

Although a broker does not participate in the settlement process, they still need to remain in touch with all the stakeholders until the loan settles. Before the loan can settle the borrower needs to adhere to
pre-settlement conditions.

 Question 1

In the pre-settlement phase, there are items that need to be checked and satisfied. For each one, explain why it is required (i.e. what is the importance of each of item):

(a) building insurance

(b) independent legal advice.

 Question 2

Explain the settlement process to the client, include the personnel who are involved at each step.

 Question 3

Explain a minimum of four (4) examples of issues that can occur which may delay or prevent a settlement.

 Question 4

Explain the steps in the process of registering security documentation.

 Question 5

When the lender is ready for settlement, they will contact the borrower’s solicitor and inform them of the expected settlement date, and request details of funds to be distributed at settlement.

The lender will then prepare a pre-settlement costing sheet and forward to the borrower’s solicitor in preparation for settlement. With the broker working closely with the borrower’s solicitor, when they receive a copy of the costing sheet, the broker can then make sure that all the particulars are correct.

For this task you are required to prepare the following pre-settlement statement for the purchase of the investment property for Ravi and Alice Patel.

 Question 6

You are now at the closing stages of the loan process with this client.

(a) How and where do you file the information you have communicated with them?

(b) Once the settlement concludes, what else would you do to ensure you communicate with this client effectively?

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