FNSFMB40 - Henry Leslie - Billy and Lisa Smith Case Study - Communication of Formal - Finance Assignment Help

Assignment Task:

Case Study 1.

Henry Leslie from Leslie Accounting Services has referred you to his clients Frederick John and Margaret Anne Everybody. He has mentioned that they are looking to purchase their first home. Whilst in their early ‘40s, they have previously not owned a home due to the husband being an engineer with the Australian Defence Forces. Because of this and constant moving, they really weren’t in a position to buy in one location. Frederick has since left the services and has been working with BHP Billiton on their mining projects. This entails working on a ‘two weeks on, one week off’ basis. Frederick enjoys an annual income, paid monthly, of $115,000 with a subsidized rent when on location on the job.
Margaret works at the local council child care center on a permanent/part-time basis and earns $29,000 annually, paid weekly. She is a qualified nurse.
They have two children. Joshua, 18, is employed fulltime, lives at home and pays $75.00 per week board. Melanie, 13, is in her first year at high school and is dependent on her parents.
Currently, the couple is renting in a suburb near you and paying $420.00 per week to the local Ray White real estate office. Due to diligent saving and being beneficiaries of a family deceased estate they find themselves in a sound financial position and ready to purchase their own home and settle into one area. They are conscious of the current economic times and wish to entrench their current situation by also considering future investment opportunities. 
One of the most important questions you will ask when completing your Client Needs Review is about Risk Protection. Have the clients considered the ramifications of financial hardship caused by illness, accident or death? The Q & A component of the CNR covers this adequately. You are made aware their contents are insured but they have no insurance policies covering life, trauma and income protection. This is where you ask what cover they consider is enough in view of the financial commitments they are now planning?  Will Margaret have to visit Centrelink if an unforeseen event happens to Frederick? Should they have to change their lifestyle? Just remember your Duty of Care.

Case Study 2.

Billy and Lisa Smith have decided to upgrade their main vehicle and will give their Mitsubishi to their son. The Holden ute will still be used by Billy to travel to work. They are seeking to fund the full purchase of a Nissan X Trail and have provided you with an Invoice from the dealer. The new vehicle is required to do a lot of country travel and tow a caravan as they intend to take a number of trips.Mr. and Mrs. Smith has full-time employment and been working for the same companies for over 5 years since moving from interstate. Mrs. Smith is the bookkeeper for FSR Consulting Pty Ltd and is responsible for all invoicing and reporting. Mr. Smith works fulltime for Large Mining Group Pty Ltd. They have also completed a personal statement of position which is enclosed with the documents. 
Other information provided:

• Intend to keep the vehicle for at least 5 years
• Wish to keep repayments as low as possible
• Happy to consider a Residual which would be reflective of the value of the vehicle at end of the loan
• Fixed Rates and flexibility important with the loan being sought
• May look to purchase own premises in about two years
• I have asked for advice on Insurance for the vehicle.
• Have own superannuation funds but not averse to having them reviewed
• Both clients are unsure of what personal insurances they have but have made an estimate of coverage
• You are required to demonstrate that you understand the lender's policy and procedures for processing an application for credit i.e. from the point of view of a lenders credit analyst. Once your loan application is ready to be submitted you must provide supporting evidence that you have:
• Checked and verified application details including all information to support the application are in accordance with the lender's credit policy and procedures.
• Your assessment decision to recommend the credit application refers to/is within the lender's policy and procedures.
• Maintaining application records and completing necessary documentation are according to the lender's legislative requirements and lenders' organizational policy and procedures.

Overall, to support your understanding of how an application for credit is processed by the lender; you are required to complete research and provide the following information which is also covered in the learning material:
Detailed notes regarding the lender’s organizational approval policy and procedures for the chosen product in your selected case study. Briefly explain why the loan met the policy guidelines and how you researched the product and the guidelines. Including maximum LVR, serviceability ratio, minimum loan, etc. If you are unable to access the lender's information readily the alternative is to access the Lender Mortgage Insurers (i.e. Genworth/QBE) guidelines that are readily available on their web pages.  Although the case studies provided did not require LMI it is helpful to understand policy guidelines as many types of lenders and loans require LMI cover.  
Explain the approval guidelines i.e. who can approve/delegation; timeframes etc.
Ensure you are adherence to relevant legislation with reference to checking and verifying application/client details and maintaining records i.e. how file and records are maintained, how movements/milestones are monitored etc.

You are to submit a fully completed loan application form as well as:
Lenders cover sheet detailing the background of the applicants, structure of the loan, loan product applied for, serviceability criteria. Supporting documents for the loan submission as requested by the lender. Finally, as a result of your client interview, completing relevant client documents and loan application for the lender; you are now required to complete the remainder of customer file supporting several of your obligations and responsibilities as a Finance Broker. These important steps being the approval process, documentation, settlement, and ongoing relationship management. In areas where you do not have copies of actual supporting documentation, insert a page with the name of the document, an explanation of the document and its purpose. You would include e.g. copy of formal/unconditional approval stating conditions of the settlement.
There are a number of templates in the Member’s Area under ‘Useful Resources’ that you could use in your submission.
You are required to submit your customer as determined by the chosen case study.  Therefore your file information must contain the following:
Adding to your Interview Notes - Customer Contact Sheet/Record
You should have already documenting regular communication pre your loan submission. These interview notes incorporate all the correspondence from initial contact to loan preparation and submission. You are now required to provide interview notes from loan submission to post loan application process; with all parties specifically including:
-    Customer
-    Bank/s
-    Referrer/s
-    Government bodies, i.e. Stamp Duty, FHOG/ Revs
-    Property Valuators
-    Settlement Agent
The advice of Loan Approval
Evidence of communication with the customer and other relevant parties regarding:

1. Communication of formal/unconditional approval to customer i.e. lender letter of offer;
2. Letter to client regarding documentation/settlement expectations;
3. Communication with Real Estate Agent, Settlement Agent, etc.

Document Sign-Up/Settlement Preparation - (FNSFMB401)

1. Document sign-up checklist and covering letter /communication;
2. Correctly signed mortgage documents;
3. Insurance details;
4. Authority to disburse funds;
5. Settlement checklist.

The advice of Transaction Completed/Finalised
- Communication of successful settlement;
- Letter/survey to the client asking for client satisfaction feedback on services/support provided.
You may wish to ask for a referral to friends and family.

The relationships built in Task 1 Case Study were the clients, referrer, settlement agent and real estate agent.
Prepare a database on contacts made from this task by using your internal customer record system or suitable program, i.e. Microsoft Excel spreadsheet. You are required to submit the Excel file (or PDF/screenshot if other software is used), showing your database layout. 
Please answer the following questions in relation to your database and building/managing your business contacts: 

1. Why is important to build a database of clients/referral sources?
2. Why is it important to develop professional relationships?
3. When is it not appropriate to contact a person and why?
4. Why is it important to have effective interpersonal styles and methods when dealing with clients/referrers? Why is it important to consider special needs, culture, race, religion, origin, demographics?
5. Explain why you think it would be important to follow up with any business referrers as quickly as possible.
6. What methods could you use in developing new business i.e.; advertising and promotion of your services?

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