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Course name
Assessment name Financial Services Legislation & Compliance Assessment
Student name
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Checklist of attachments:
? Task 1 – Case study questions
? Task 2 – Workplace project
? Task 3 – Short answers/Activity
? Task 4 – Workplace project
? Task 5 – Activity
? Task 6 – Workplace project
? Task 7 – Research
? Task 8 – Research
? Task 9 – Short answers
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? Online ? Virtual Class ? Face to face (Trainer’s name: )
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This assessment relates to the following units of competency:
• FNSINC401 Apply principles of professional practice to work in the financial services industry
• FNSFMK505 Comply with legislation and industry codes of practice
Please refer to AAMC Training’s full Recognition Policy for further details.
Please note articles and resources used in questions below are for the purpose of training only and may be outdated but still acceptable to meet the requirements of the tasks.
In addition to fully reading and understanding the contents of the learner guide, you have been provided an FMB Assessment Toolkit. We urge you to fully read and understand both of these resources prior to commencing the following questions and case studies as they will assist you in successfully achieving an understanding of this module and thus a satisfactory result. Most of the tasks are related to the FMB Assessment Toolkit. You will also need to access some of the forms and templates in the Useful Resources section of your Members Area.
• Your answers to each of the tasks are to be typed into this document and uploaded.
• No assessment word count has been specified for some of the questions, although you are expected to provide good quality answers to each of the questions.
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• Although some general discussion between students covering the assessment is allowed your responses to each of the questions must be an individual effort.
• PLEASE NOTE: AAMC Training only wants to see your own work. Please do not upload parts of the learning guide or instructions on how to complete. When this extra information is uploaded it presents unnecessary work for the assessors and in turn delays our assessment responses.

Task 1 – Case Study
As part of managing your professional development and maintaining currency, you read many industry articles. You received this following article from Industry Media and decided it might be a good one for the other finance brokers (authorised credit representatives) of DNZ, in order to understand the industry better.
The historic low interest rate of 1.5% which remained the same after nearly two years, is expected to increase -at some point,” according to Philip Lowe, Governor of the Reserve Bank of Australia (RBA). Economist Warwick McKibbin concurred stating that this has been shown by the local economic and political climate. The increase is predicted even in global standards as an effect of the rise of climate change policies, digital disruption, and the overall changing global economy.
Due to low inflation, lack of growth in wages, and job insecurity - the present interest rate has failed to catch up with the global interest rates. These in turn mean that household spending is not enough to push the economy forward.
While the RBA is able to influence most interest rates in the economy, and in turn manipulate the demand for borrowing, the banks are assumed to pass the cost on to borrowers. The banks endeavour to shoulder the costs of borrowing funds within their business before passing it on to borrowers via loan repayments.
As the RBA and banks determine the cash rate and interest rates, they do not solely govern the behaviour of the financial services industry.
While this is so, there is the call to prepare for the rate hikes. It is best for borrowers to sort out their finances ahead of time and be mindful of the industry’s climate, so that they are aware of interest rate movements. If it is possible, park spare cash in an offset account or use it for paying down the loan.
News article resources can be found at the following websites (which were correct at the time of this publication):
• (subscription-based)
Case Study questions:
1. You have asked the finance brokers (ACR’s) in the DNZ business to consider the article above which will also help them to better explain to their clients and referrers about external impacts that may affect borrowing. Referring to the article above and the AAMC Training learner guide, identify a minimum of three external forces that could influence the move in interest rates and that also dictate the economic and political climate in relation to the financial services industry.
2. What are the two financial services sectors that are involved in influencing interest rate movements and how do they interrelate?

Task 2 – Workplace Project
1. Paul has asked you to write a staff memo to update everyone on the recent changes and impact of the Australian Financial Complaints Authority (AFCA) on organisational policy, guidelines and procedures.
Using the template below and considering the key points, write the office memo in less than 500 of your own words*.
Refer to the AFCA website to locate relevant information found under Members.
Dear colleagues,
*Who are AFCA and what are the benefits of AFCA membership?
*What are the key points that you have to consider in communicating information about AFCA?
*What does the AFCA Code Compliance and monitoring team support and administer? (Found under Codes of Practice)
2. Paul Williams has asked you to update the DNZ Credit Guide with the correct wording about AFCA. What information should be available to consumers on both the website and in the credit guide? Reference: “Letting your customers know about AFCA”.

Task 3 – Short Answers/Activity
Read the following article and answer the relevant questions.
The broker's guide to CCR
Having a complete picture of a borrower’s financial position promises many benefits for lenders, brokers and borrowers alike. With comprehensive credit reporting on Australia’s doorstep, The Adviser speaks to industry participants about how brokers can prepare for and make the most of the new regime.
The mandatory comprehensive credit reporting (CCR) regime – which requires lenders to provide access to customer credit data, such as repayment history, credit limits and types of credit accounts – is being lauded as a revolutionary step in the lending process that could facilitate improvements to credit decisioning, credit availability, operational efficiency and competition, if implemented effectively.
What is CCR?
The National Consumer Credit Protection Amendment (Mandatory Comprehensive Credit Reporting) Bill 2018, which was introduced into parliament mid-last year, requires lenders to report positive credit information, such as when minimum payments on a credit card, mortgage or personal loan are being made on time.
While the bill has been put on the backburner a number of times, the financial services industry has been making progress in adapting to the new regime. By the end of September 2018, which was the government-imposed deadline for the major banks to insert 50 per cent of their CCR data into a data exchange system, the big four banks, along with Citibank, HSBC, Teachers Mutual Bank, RateSetter and MoneyPlace had become participants in the regime.
The government said that 100 per cent of CCR data would need to be shared by the big four banks by the end of September 2019, and the deadline for other lenders are 12 months after the major banks.
It is believed that CCR will allow all participating lenders, including non-banks and fintechs, to better assess the risk status of a loan applicant.
From risk to opportunity
As Standard & Poor’s (S&P) notes in its report, Australian Structured Finance: Credit Analysis in a Digital Ecosystem: “Having access to data on borrowers’ financial commitments and the deployment of data science to analyse it will enable lenders to make a more accurate assessment of expenses, resulting in more prudent underwriting.
“It will also facilitate greater consistency in debt-serviceability assessments.”
S&P predicts that an open data model will reduce the financial services industry’s reliance on time-intensive manual processes, because a greater amount of information will be quickly and easily obtainable.
Peter Beaumont, head of growth at ASX-listed peer-to-peer lender Wisr, notes that, traditionally, the onus has been on the borrower to provide information on how they managed their liabilities across a recent time frame.
“Increased transparency... will have a huge positive contribution on business productivity along two dimensions: one is avoiding wasted time and the other is around improved customer understanding,”
he says.
“Having CCR historical payment data regarding their liabilities allows [brokers] to better assess the facts around the clients.”
Observing that “many people... don’t tell [their broker] everything”, Anthony Azar, principal at Fenero Bespoke Finance, says CCR will open opportunities to have deeper discussions with clients, allowing brokers to understand early on the risk status of the client and the likelihood of them being successful in obtaining a loan.
“[It will] allow you to see whether the loan can be done based on the [customer’s past conduct] or whether you need to do the loan through second-tier [lenders], rather than push that through to first-tier [lenders] only for it to bounce back [due to] an issue you weren’t aware of,” he says.
CCR may allow some Australians with black marks on their credit report to not be disadvantaged due to past financial hardships.
“It could be somebody whose credit profile appears quite weak but CCR history tells us for the past two years they’ve had three credit facilities and met every payment on time. That can have a significant influence on a lender’s preparedness to lend,” Mr Beaumont says.
Conversely, Mr Beaumont says someone with a high income and numerous assets might present as low risk, but CCR data could show that there is a history of missed payments and overspending. The broker will be able to understand that the client is weaker than they initially thought and may need guidance before they take on additional liabilities.
Mhairi MacLeod, founder and principal at Astute Ability Finance Group, says brokers who work with clients to improve their credit history, such as through better budgeting, and teach them the importance of good credit conduct “will be laying strong foundations for a client for life”.
She believes CCR will also enable more product innovation with wide-ranging benefits for customers.
“These changes will create wide-ranging competition for consumers across all forms of finance and allow lenders on all product lines to compete against the majors on a more even playing field,” Ms MacLeod says.
Getting ready
Meanwhile, Mr Azar also suggests CCR could enable the creation of the “first straight-through home loan approvals without human intervention”, adding that he thinks the regime will favour the fintech segment.
Once the CCR system is widely embraced, Mr Azar says “the first step of any deal will be to look at [client’s] information” to get a better understanding of their true financial positions. This will determine the approach that is taken by the broker and the client to achieve a positive outcome.
“You look at [the client’s] information and you might say, ‘You’ve got a bad record’ or ‘Here are three or four lenders that could help and this is going to be the cost of funds and are you amenable to that interest rate?’ This is [rather than] running around in circles and doing all the work and realising it’s not bankable or it is bankable but the interest rate is not amenable to the client,” he says.
According to Mr Beaumont, it will be important for brokers to understand every lender’s implementation roadmap as there will be varying time frames for them to update their credit decisioning processes.
He notes that lenders, particularly fintechs, are rolling out their own products using the newly available data for brokers and other partners to use, though brokers can also purchase the data directly from credit bureaus.
Further, Mr Beaumont suggests that it is crucial that brokers understand how lenders will process CCR data and what impact the data will have on their credit decisioning processes.
“As a broker… if you have a client who has a series of previously missed payments on their personal loan, as evidenced by the CCR data, you need to ask yourself, ‘Does the lender who you’re proposing to introduce this new loan to care about this? How are they going to react when they see the CCR data?’”
Mr Azar agrees, noting the decisions lenders make based on the same data will differ.
“There are lenders that have zero tolerance [for missed payments], some that have a dollar value tolerance, and some that have a historic tolerance. They will have different views on, for example, what’s an acceptable event of default. [Brokers will] need to be across all of this,”
he says.
Aggregators and lenders are already playing a role in supporting their brokers in this area of education, according to Mr Beaumont, who says some are providing CCR training and a credit bureau access service through their own portals.
He says brokers should be cognisant that data quality in the initial stages of the regime will not be perfect, but it will improve over time. As such, lenders also need to ensure, especially with negative CCR data, that it is “correct and not a function of a poor upload from a recent contributor”.
“I would say for 2019, in the consumer space, CCR is essential knowledge that a broker must get a grip on to do the right thing by their client.”
Ms MacLeod agrees, recommending that brokers seek relevant education and training to “ensure they are in a position to offer clients the best possible advice”.
Referenced from:
Task 3 Questions:
Paul has asked you to review the above article and consider the ongoing changes to comprehensive credit reporting which is highly important information for staff and customers. He has also asked you to ensure staff knowledge across the article in relation to operational procedures and processes accurately reflect these changes. He has mentioned that linking to the Equifax website and other industry related information is a good way to remain up-to-date with ongoing changes.
Also, there are many ways to let clients know more about CCR and changes – see sample:
1. What are the procedural implications of CCR on your organisation’s operations?
2. How might you stay up to date with changes in CCR or any other regulations?
3. What would be a good method and time frame for updating finance brokers (your staff) and clients regarding these changes? You may wish to place your answer in a table similar to the one below.
Who How By when

Task 4 – Workplace project
Due to increased workloads, Paul has hired new broker, Shona, on a subcontract basis and she will undergo 24 months of mentoring. Shona was formerly a loan processor in her previous role and already holds an FNS40815 Certificate IV in Finance and Mortgage Broking qualification.
1. As an initial measure to implement a successful monitoring of the authorisation process, discuss with Shona the procedures a responsible manager has to undergo to authorise her as an Authorised Credit Representative (ACR) with ASIC. This process forms part of the agency agreement required under ASIC between Licensee’s and their authorised representatives. Using the table below, complete the process of authorisation
a. Undertake background checks on that representative.
b. Ensure that they are adequately trained to engage in credit activities.
c. Ensure that they have current external dispute resolution (EDR) scheme membership before the authorisation is given.
d. Provide written consent to the appointment.
e. Ensure they have adequate systems and procedures in place to monitor and supervise their representatives (see Monitoring and Supervising representatives).
Background checks
Training requirements
Membership to an EDR scheme
Written consent
Monitoring and supervising
2. Shona has asked you the difference between registering under an ABN versus an ACN. In your own words describe what they are and how they differ. Information may be found on Wikipedia, or similar resource.
3. Shona would also like some advice from you regarding when she should register for GST. Explain the process for registering for GST, including who needs to register and when. Information may be found at or
Task 5 – Activity
As the Responsible Manager you role is to determine and plan work to be completed by the finance brokers and team. As part your discussion with Paul, you have both decided that the Finance Brokers (ACR’s) need to undertake some further training to increase personal skills, make a more cohesive team and ensure service improvement. The training will contribute towards their professional development hours required for association membership and to meet ASIC requirements. This training should take place as soon as possible and needs to be completed within the next three months. To kick off the training (and lead by example) you have decided to commence with planning some training for yourself.
1. Identify three personal competency goals you would like to achieve in your role that would enhance your organisation’s image. Explain how you can go about developing the skills needed to achieve your goals and your ideal timeframe for completion. You may wish to use the responsible manager profile in the FMB Assessment Toolkit or choose your own goals.
Performance Objective Required Skills Current Skills Time frame to complete
Example: Become a leader in my business Learn leadership skills No leadership experience First 12 months
2. Referring to ASIC RG206, what are the minimum continuing professional standards for responsible managers? Include in your answer:
• the required number of hours
• how often your professional development should be completed, and
• what these activities should consist of.
3. Based on the “Credit Representative Profiles” in the FMB Assessment Toolkit, and using the table below, complete a training needs analysis for each individual.
Individual Performance Objective Required Skills Current Skills
4. Using the “AAMC Training Course List” from the FMB Assessment Toolkit, determine which training will need to be completed by each ACR, whether it will be individually completed or as part of a team, and where the training will take place.
Individual Course Method of study Time frame to complete Resources Required Offsite or in office
5. How could you ensure that your contribution serves as a role model to others and in turn, enhance the organisation’s image? Refer to Module1, Section 6.
6. Briefly explain how you would actively encourage individuals to participate in, take responsibility for and effectively communicate in team activities. Refer to Module 1, Section 5 of the learner guide.
7. Shona is having issues learning the company’s CRM system and has a loan ready to submit. Referring to the FMB Assessment Toolkit, answer the following questions:
a. What learning should Shona complete in order to adapt to the system and when can she complete this?
b. Which team members should be able to also provide support to Shona regarding the software?
8. Paul has asked you to provide some feedback to the team regarding the training outcomes. The team performed the tasks well and you would like to make sure you value and show encouragement towards their performance. How would recognise and reward individual and team efforts?
9. Paul has advised that the company are now using AAMC Training’s LMS to record CPD hours. Using the AAMC Training CPD area (this is an option in your AAMC member area under Professional Development Record CPD/CE) or by creating your own PD Statement (based on the AAMC Training example below) record a minimum of 20 hours of professional development activities that you may complete as a finance broker. Refer to the professional development section of the FMB Assessment Toolkit (under company professional development activities or AAMC Training courses). You may also choose some of your own activities.

Task 6 – Workplace Project
1. Paul would also like the team to attend a “First Home Buyer” event in hope to gain some new business. Your role is to determine what tasks would be allocated to whom within the business to get set up and have enough people on your stand throughout the day. The following answers are ‘free thinking’ questions and thus the learner guide or assessment may not contain the answers.
Not everyone needs to be involved but, you would like to ensure all the brokers get the opportunity to attend the event. Consider the variables and write down the tasks/ requirements into the planning table below in order of priority. Your task should be based on looking at the skills of all staff in the office (as detailed in the FMB Assessment Toolkit).
The event is happening at the Melbourne Convention Centre in two months’ time and you have been advised that any items for the stand must arrive two days beforehand.
• Organise for marketing materials, prizes and banners for stand
• Setting up the stand
• Packing up the stand after the event
• Maximum of two staff to attend the event (at any one time) and be on the stand per session 9am to 12pm & 1pm to 5pm. You should consider having different personality types to ensure that sales are being made consistently.
• Organise the courier to pick up the marketing materials for delivery to the venue
Task Action Who To be completed by
2. All of your team members did really well in achieving some good interest at the event.
To prove that you value their efforts and to offer encouragement for future tasks, you have decided to provide rewards. Explain ways in which you could reward individual and team efforts.
3. You really want your team to get as many new prospects from the event as possible. What is a process or idea you may be able to use to encourage the team to participate?

Task 7 - Research
1. As part your own professional development, serving as a positive role model and teaching others, you have decided to review the MFAA Code of Practice. This will ensure a thorough understanding and future training standards. Explain the general standards of the code.
2. As part of maintaining and ensuring compliance, you have decided to check and categorise all statutory records accordingly. Under each of the headings below, list at least three types of registers that you believe fit the relevant category. Refer to the FMB Assessment Toolkit and/or Module 1, Section 8 of the learner guide to assist with your answer.
Recording Registers Records and Certificates Policies and procedures
3. You are auditing one of the teams’ Product Disclosure Proposals and need to discuss it with them before they hand it to the client. You’ve noticed (ongoing) commission is shown as an annual figure instead of monthly. The loan was for $320,000.
Fees and commissions
Fees payable to us for the provision of broking service We do not charge any fees for our service. We get paid commission from the lender. [OR – remove as appropriate]
Our service fee is $ (including GST) or % of the finance amount, for arranging finance on your behalf. The fee is payable on approval of your loan/s. [You cannot charge a fee before you provide credit assistance]
Fees payable to third parties There are no fees or charges paid by us to third parties. [OR – remove as appropriate]
Total fees and charges paid by us to third parties are $ (including GST). The fees and charges are paid to for arranging . [for example ‘paid to XYZ Company for arranging valuation’]
The fee is payable when required by the third party.
Estimate of commission to be received by us. This commission is payable to us for assisting you to obtain finance. .65% of the amount of the principal finance amount shortly after the finance is provided. We estimate this to be $2,080.
.15% per annum of your outstanding loan amount owing payable monthly. We estimate the largest monthly payment to be $480.
These amounts are inclusive of GST.
Commission will be paid by: The commission will be paid by the lender documented above to the licensee. The licensee will then pay some or all of the commission to the credit representative.
Other benefits From time to time we receive benefits in the form of conferences and training sessions provided by the licensee, financiers, or others. The value of these benefits cannot be ascertained.
Estimate of total fees and charges payable to the financier in relation to applying for the finance.
These fees are payable by you. Application/Establishment fees $500
Valuation fees $350
Legal/Documentation/Settlement fees $800
Lenders mortgage insurance premium $
Other $
Total $
These figures are estimates only and the final figures will be shown in your credit contract or lease. Some or all of these fees may be paid from the finance proceeds.
These fees are payable only once.
We are not aware of any other fees or charges payable to anyone else in relation to the application for finance, but the financier may impose some additional requirements.
Referral fee The credit representative has paid or will pay a referral fee of $ to for referring you to us.
In addition, we receive referrals from a broad range of sources. For example, we may pay fees to call centre companies, real estate agents, accountants, or lawyers for referring you to us. These referral fees are generally small amounts and accord with usual business practice. These are not fees payable by you.
Using the table below correct the commission amounts.
Estimate of commission to be received by us. This commission is payable to us for assisting you to obtain finance. .65% of the amount of the principal finance amount shortly after the finance is provided. We estimate this to be $
.15% per annum of your outstanding loan amount owing payable monthly. We estimate the largest monthly payment to be $
These amounts are inclusive of GST.
Task 8 – Research
The “2017 Sustainability Report” of the National Australia Bank details the bank's strategies on Corporate Responsibility and its performance over the said year. It contains the organisation’s own version of sustainability principles how they have responded to environmental, social, governance and economic responsibility.
1. Access the above link to the 2017 Sustainability Report, specifically the table found on pages 9-12. Choose one material theme from each of the three major criteria for measuring profitability - social, environmental, and economic.
Social Economic Environmental
2. In your own words, using the table below complete each of the areas:
a) The impact/s on the different participants in the financial services industry. (Stakeholder view and relevance to NAB)
b) The practices, strategies, and policies that are incorporated in that material theme. (How we’re responding)
c) The outcomes have been reported from the incorporation of those material themes. (Performance)
Three major criteria for measuring profitability NAB’s version of SUSTAINABILITY PRINCIPLES
(Material Theme) Impact on industry
(Stakeholder View and Relevance to NAB) NAB’s Activities
(How We’re Responding)
NAB’s Corporate Sustainability Outcomes
3. You and chosen members of your team have been tasked to create your own corporate sustainability framework, incorporating and supporting triple bottom line principals. Highlight at least one goal, under each of these headings that you would like to achieve for the business.
Astute Ability Finance Group's Corporate Responsibility approach found in this website: is an example that you may use as a reference.
Areas of the business Sustainability goal
Your customers
Your staff
The community
The environment
4. Based on your goals, highlight the potential economic outcome/s on your business and the greater community.
Sustainability goal Economic outcome/s

Task 9 – Short Answers
1. List at least three of the main sectors of the financial services industry that may impact your role as a finance broker.
2. In your own words, briefly explain the memorandum of understanding between ASIC and APRA.
Refer to ASIC link to assist you with the answer:
Paul Janes has a tiling business and has earnt $90,000 for the most recent financial year. His wife Melanie works at Coles Supermarket on a part time basis and she has been promised the position of Store Manager, likely to earn $20,000 more than what she is currently earning. The couple are in their mid 40’s and have a son living at home. They have a current home loan of $250,000. They are seeking a personal loan from you for an overseas trip of $50,000. The couple have approximately three credit cards.
3. What are two or more qualifying questions you should ask the clients in the above scenario to clarify their financial situation?
4. Why is it important to make reasonable enquiries about a client?
5. Why is it important to take steps to verify a customer’s information?
SCENARIO – Anti-money laundering & counter terrorism financing
Sam Knight contacted you about obtaining a car loan and, as part of providing documents, he sent you uncertified copy of his driver’s licence.
6. What are your obligations under AML/CTF legislation in reference to Sam’s identification? (Refer to section Module 1, Section 2 of your Learner Guide – Money laundering and terrorism financing.) Explain the requirements of the customer identification and verification process.
7. Sam has also provided his tax assessment notice as evidence of his income for the loan application. As you have another Sam Knight (Samantha) on your books, you are wondering whether you could perhaps file each of the “Sam’s” by their tax file number for easy identification in the future. Referring to the use and disclosure of tax file number information found under Module one, Section 2 of the learner guide, provide an explanation as to whether this is acceptable practice.
Maddison and Andrew (clients of yours) entered into a consumer loan with ABank. They have just been advised that Maddison is very unwell and has had several months off work. Her employer recently advised that they could no longer hold her job. As a result the couple have been struggling to meet their mortgage repayments and have fallen into default many times. They have provided a hardship application to the lender. Refer to the hardship provisions under responsible lending conduct obligation in Module 1, Section 2 of the learner guide.
8. Explain what the lender must do within 21 days of receiving the hardship application.