FNSSAM403 - Prospect for New Clients - AAMC Training Useful Resources - Review Writing Assessment Answer

In order to successfully complete some of the tasks in this assessment you should have access to the following documents. These are available in the AAMC Training Useful Resources or you may wish to find your own/use your company documents.

• Credit Guide – important facts about the business and products you provide
• Adviser Profile – this may be included in your credit guide and could be simply your licence number as the services you provide are one in the same as your licensee
• Client Needs Review – for client data gathering
• Preliminary Assessment

Questions

1. What do you believe to be three good prospecting methods and why? 

1	Social Networking	Social networking is a method of networking using social media sites like facebook, Instagram, Twitter, LinkedIn etc. this method can be used in everday sales prospecting activities. Focus only on few social networks at a time and build the audience. Never neglect anyone. Aways reply to Blog comments, tweets and facebook posts and all other messages on social media.
2	Cold calling	Cold calling is a method that is used because it generates most of leads who are qualified and most of the appointments are set than any other methods to gan prospected customers.
3	Referrals enquiring	In order to generate leads which are qualified, enquiring of referrals is most impactful technique. According to previous studies the asking for referrals have strengthened the relationship with prospects. Sellers when they are asking for referrals have nothing to lose and everything to profit while asking for referrals. These referrals also provide an edge over other competitors with respect to perception of the consumers.

2. In your own opinion, what are some areas which are important to say about yourself and your business when creating a Facebook or LinkedIn profile? Why would correct and professional information be important to your organisation?

To make a Facebook or linkedIn profile for business

 

It is really important to tell information about ourselves and our business while creating our business’s facebook or linkedin profile. There should be details about what industry the business caters in and what services they provide. While creating profile, mission and vision of business or CEO should be mensioned. All details aboutCEO like name, qualifications and achievements should be mentioned. I would also add testimonials from previous clients on it. Details of future prospects of business, background of business along with mission and vision should be detailed.

3. What is cold calling? Is cold calling an effective prospecting method? Explain your answer.

 

Don’t do its done

 

4. How would you build a relationship with a client through cold calling?

 

5. In your opinion, why would the following areas of information (found in the Credit Guide) be important for a new client to understand? How could this information protect all parties?

• your role and responsibility as Credit Advisor
• the role of the organisation 
• the identity of and information about the Credit Licence holder
• the range of services provided
• all costs, fees, commissions etc. associated with the transaction
• the procedures for handling complaints and disputes.

 

6. Why do you believe is it important to encourage prospective clients to express their needs and goals when completing a data collection?

 

7. Your client Mary Jane has advised that she would like to purchase a home worth $400,000 and you have worked out associated costs of around $30,000. She has a deposit of $150,000. She has spoken to friends and are concerned that she may have to pay mortgage insurance which she hears can be a very high cost.

Complete a quick LVR calculation and explain the outcome to the client. Why is it important to respond clearly to the client in this case? What could you do to make sure the client has understood what you have advised?

 

8. Your client Mary Jane is hesitant about completing some of the information in the client needs review. As an Adviser, you must fully complete a client needs review for a number of reasons. What is a probing question you may ask the client to determine their resistance? What are two points you may highlight to the client to try and overcome this situation in an appropriate manner?

 

9. A prospective client is hesitant to use you as their broker because they are already a client with a competitor. What interpersonal techniques and communication skills would you use to overcome this?

 

10. You have now gained Mary Jane’s consent to move forward with fully completing the fact find. She has advised that further to the basic information provided above in question 7, she is buying the home to live in and she is a single parent on a good income in long term employment. Mary Jane would like to pay the home off early but would also like some spare funds for a holiday over the next 12 months. Protection of the home and her child in case of job loss or becoming ill is highly important. Mary Jane would like to purchase another investment property down the track to provide for her retirement. Prior to a marital separation, Mary Jane and her ex husband had paid off another mortgage. Mary Jane has a clear credit history. The client may also like a 100% offset account as she had one in the past and it worked well to pay the loan off quickly. Mary Jane would prefer a major bank as she is concerned a smaller provider may not have any branches in her area.

Whilst it would be prudent to complete a fact find under normal circumstances, for this exercise we will ask you to complete the table below. In the table below highlight and record the client’s goals, concerns and creditworthiness (why the lender should consider them for the loan).

Goal	Concern	Creditworthiness

 

11. John has asked you for some advice on buying a car for personal use worth $40,000 over a five year loan term. You have completed his client needs review and must now complete some research to present John with appropriate finance options. Research and present two products that may be appropriate for John (you can use a number of sites including rate city to complete this activity).

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12. Using a search engine, research “Ten tips to protect your customers’ personal information”. Select one of the 10 points and in your own words briefly describe the purpose of this step.

Don’t do its done

 

13. You have completed a fact finder, costing analysis, and LVR calculation for a client and have worked out the due to affordability issues, based on the living expenses they have provided, the client is unable to borrow the required loan amount. They would be able to borrow a loan amount of $5,000 less. Referring back to your client needs review, what additional question/s would you ask the client?  

 

14. After you have completed the product research how would you prepare for the next contact?

 

1. List six buyer motives and in your own words, analyse and discuss issues relating to two of them.

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2. Using conflict resolution and persuasion techniques, write a response to the following examples of buyer resistance:

Not interested
Send me some information
No money – Can’t afford it
You’re wasting your time

 

3. How do you successfully undertake cold calling? Explain the process from start to finish.

 

 

 

4. Read the following article, and answer the questions below.

Information in this article may not be based on current market statistics and is for assessment purposes only Why Melbourne’s properties will keep on rising In Australia, over some 120 years or so of not quite so accurate statistics, property prices have risen at an average compound rate of 10.4%, very slightly ahead of England.  Again, property prices have doubled every 7 years or so despite droughts, wars, changes of government, interstate and overseas migration, interest rate movements, exchange rate movements, changing rates of unemployment, CPI movements, etc. Property cycles When one takes a short-term view of property price movements, one can get confused by apparently contradictory statistics. However, if you understand that property prices move in 7-10 year cycles, the picture becomes a lot clearer. Let’s take one obvious example. The movement in NSW and Victorian property prices tend to be counter-cyclical to Queensland prices (especially South East Queensland).  This is heavily influenced by what is happening in the NSW & Victorian economics which encourages migration to Queensland, and at other times in the cycle, people returning to NSW and Victoria. So, when Queensland prices are moving ahead strongly (because of this additional demand from interstate migration), prices in NSW and Victoria exhibit slower growth, and vice versa. A study of cycles shows that the Sydney market is much more volatile than, for example, the Melbourne market. Sydney prices rise faster but can also experience significant falls in each cycle – Melbourne prices tend to rise rapidly (+25%, +20%) in the first two years of an upturn and then more moderate increases of 3-7% in the remaining years of the cycle till growth spurts again. Relative prices in each capital city Over the last 100+ years in Australia, each of the six State and Territory capitals have established a fairly stable ranking with each other in terms of their median house and apartment prices. Traditionally, Sydney has always been the most expensive followed by Melbourne, Canberra, Brisbane, Perth, Adelaide, Darwin & Hobart. Increases in prices in each of these markets, for whatever reasons (mining booms, economic recessions, rural booms and droughts etc) can cause some temporary shifts in the relative standing of each of these cities. But these are normally temporary shifts and the long-term standings re-assert themselves as the various cycles evolve. continued on the next page

 

In the last 3-4 years, Perth & Darwin prices (and to a lesser extent Adelaide and Brisbane prices) have increased dramatically due to the boom in mining and oil company revenues and increased demand for labour (and therefore housing) in those cities. Sydney and Melbourne prices, while still rising, have slipped behind these other cities in terms of relative price increases. Basic demand & supply The ever-increasing need for housing in Melbourne and Sydney is not based on temporary boom factors but on underlying (substantial and permanent) shifts in population. Each city has a strong underlying economy, which is not dependent on one particular industry.  In addition, estimates of Melbourne’s population for 2020 is over four million people (an approximate increase of 25% in 13 years). This is huge in terms of population increase and the need to accommodate these extra people. The reality is that Melbourne’s building industry cannot build more than about 140,000 accommodation units (houses and apartments) per annum due to shortages of qualified tradespeople of all types and shortage of suitably zoned land and the building permit process. Demand, on the other hand, is estimated at approximately 170,000 accommodation units per annum. Added to this, State and Federal governments have all but completely removed themselves from supply of affordable housing. The inevitable consequence is that house and apartment prices will continue to rise (quickly over the next 2-3 years and then more moderately). And rentals, which are already moving up quickly, will continue to rise ahead of CPI. Relativities with other capital cities will be restored by above average price increases in Melbourne and then Sydney. Interest rates The spectre of a return to 16-17% interest rates (experienced only once in Australia’s history and then only for a few months in 1990) has loomed large in many would-be investors’ minds. This fear is understandable but not justified. Interest rates are now approximately 1-1.5% above the lowest they have been in the last 40 years. From an economist’s viewpoint, they are currently above the theoretical long-term average that they should be (arrived at by adding the present CPI increase and the additional incentive needed to be offered for people to save and lend their money to others – historically 1.5-2.0%). Currently rates are above their theoretically justified level. This is not to say that the Reserve Bank will not use one or even two more 0.25 per cent interest rate rises to send a message to the market not to get “overheated”. Even two such increases will leave interest rates within 2% of their 40-year lows. A 0.25% per cent increase in the average mortgage of around $220,000 is equivalent to an extra $10.60 per week ($45.80 per month) in repayments. By comparison, a 10% increase in the median house price in Melbourne is equivalent to an $817 per week ($3542 per month) increase in the owner’s wealth. continued on the next page

 

Rents The level of rents (determined by supply & demand) and the value of the properties to which they relate establish the rental return per annum. The rental return rises and falls at different times in the cycle as real rents and property prices move up at different rates.  Rental returns on residential property tend to vary between about 3.5-4.0% and 5.5-6.0%. Melbourne’s rental returns have moved very close to the top end of this range and are showing every sign of continuing to rise further as vacancy rates continue to show a decline from over 4% to a little over 1.1% in most parts of Melbourne. The city’s long-term imbalance between the new accommodation that can be supplied and the level demanded by increased population/increased member of new household formations noted above, allows the actual level of rents to continue to rise quite quickly. This will attract new investors into the residential house and apartment markets, which will, in turn, keep pushing prices up. Housing affordability There is much debate about whether houses have become “unaffordable” for young couples. Much research has been done on the number of years’ salary it takes to buy the “average” house, and the proportion of income taken up by mortgage repayments. This is a very complicated issue, which has received a lot of publicity during this faux election campaign. Despite all the rhetoric I have seen no viable recommendations come forward and even less political commitment to solving the problem. My view is that Australia (which has enjoyed the highest rate of home ownership in the world) will slip in the world rankings. Those who have parents who can help them will still be able to buy a home (especially with abundant bank credit persisting) while those who don’t may be consigned to a life of renting. This will further stratify Australian society with the rich getting richer and the poor getting comparatively poorer. This, combined with governments removing themselves from constructing accommodation, will put more reliance on a healthy private rental market and make it suicidal for governments to remove or reduce investment incentives. Where are we now? The above factors of: Over 900 years of compound growth in residential property values; Where Melbourne prices are in the current price cycle; Where Melbourne prices are vis a vis other capital city prices right now; The short, medium and long term population forecasts for Melbourne; The building industry’s restricted capacity to build new accommodation units; Where we are in terms of interest rates v capital growth; The continuation in the rise in rents and the very low vacancy factor; and The lack of any coherent way of easing the pressures on accommodation

 

 

1.  

1. Explain three points from this article that would appeal to/encourage investors seeking to buy more property in Melbourne.

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2. Why would it be prudent for a person to hold on to property over the long term?

 

3. Why will housing continue to become unaffordable for first home buyers?

 

5. List six different prospecting methods and in your own words, compare and contrast two of them.

Don’t do its done

 

	Prospecting method	Explanation (only two required)
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2. Name at least eight different marketing techniques and in your own words describe the pros and cons of three of them.

	Marketing Techniques	Pros	Cons
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3. Access the following website: https://www.finder.com.au/equipment-finance
   Explain the difference between a hire purchase and a novated lease. Analyse the strengths and weaknesses of the products and services offered.

Don’t do its done

 

Hire purchase		Novated Lease
Strengths	Weaknesses	Strengths	Weaknesses

 

4. Research “The six phases of the buying and selling process”. List the steps for both the buying and selling processes.

Don’t do its done

 

	Buying	Selling
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5. What legislation do you need to comply with when using the following prospecting methods:

Don’t do its done

 

Cold calling
Email

 

6. List at least three types of information you need to provide your client with regard to:
   1. your role as an adviser

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1. 2. the role of the organisation you represent.

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7. List five questions you believe to be most important to ask a prospect to ensure that they have a good understanding of what you provide.

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8. Access the “Client Needs Review –Business & Commercial” document in the Appendices or Useful Resources Section on the AAMC Training Member’s Area.
   1. What interpersonal skills would you use to encourage the client’s to express their needs and goals?

 

1. 2. Why is important to understand a prospect’s level of financial understanding?

 

9. Why is it important to protect the client’s financial information?

 

10. Why is it important to have a prospecting database?

 

11. How does a prospecting database help you prepare for the next contact?

 

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