Activity 1
Identify and describe 3 different types of investment product which might be recommended to a client by a financial planner.
(Outline the range of financial products available in the industry).
Activity 2
If a financial planner is a member of the Financial Planning Association of Australia (FPA), what rules must they follow when identifying financial products and services recommendations to their clients?
(Explain key requirements of industry codes of practice and relevant legislation and regulation affecting the industry).
Activity 3
Explain why fixed-interest securities are an important asset class for some investors, and comment on some of the factors that affect these securities.
(Describe investment and savings vehicles, financial markets, asset classes and investment characteristics).
Activity 4
Investment analysts and journalists often distinguish between investment risk and investment uncertainty. Explain the difference between the term’s investment risk and investment uncertainty, using an illustrative example.
(Explain investment risk factors and relationship to return expectations).
Activity 5
Many financial planning clients are recommended to invest in managed funds. Identify and explain the benefits and risks of using managed funds as an investment option.
(Explain options, strategies and solutions suitable for typical client situations and profiles)
Activity 6
Explain how active listening can be an effective negotiation technique, in the context of financial planning.
(Outline the principles of effective negotiation)
Activity 7
You are considering becoming the client of a local financial planner. Before you sign up, you want to know what you will do if you have a complaint about the planner or the service that they offer. What should you do before you sign up with the planner?
(Describe the internal and external issue resolution processes).
Activity 8
Explain of what financial capacity means to a financial planner in Australia, and provide examples of where a planner needs to be very aware of financial incapacity.
(List the requirements related to the disclosure of capacity).
Activity 9
Why is important for some financial planners to specialise in the area of social security and aged care in relation to the provision of Statements of Advice?
(Explain the general impact of relevant economic, taxation and social security policy on the client’s financial needs).
Activity 10
ASIC has responsibility and oversight on ensuring that licensees comply with most of the general obligations under s912A(1) of the Corporations Act 2001. Specifically, ASIC’s regulatory guides provide guidance to what is required of an AFSL across a wide range of areas including, but not limited to, compliance, risk management, people, reporting, technology, and dispute resolution.
Identify some ways an AFSL process might fail a client, even though an SOA was prepared for that client. (Outline the role of the: adviser; organization; broker (if relevant).
-------
For all tasks the student is required to use the correct industry specific terminology, satisfied all relevant legislation, industry standards and organisational requirements and indicated that they have accessed the required information sources. Assessment task reference A satisfactory response requires the student to:
2.1- Provide advice to clients that complies with relevant legislation, regulations, and industry codes of conduct.
2.2- Use organisational tools such as fact finders.
2.3 -Present appropriate solutions to the client after identifying and analysing client needs, objectives, and financial situation.
2.4- Complete and maintain necessary documentation and provide after sales services
FNSIAD501 Provide appropriate services, advice and products to clients
Janet Chan Case Study
James, a financial planner meets with a new client Janet Chan, and asks her to complete a fact finder. Janet takes the fact finder home, and a couple of days later emails a completed version to James. James summarises the fact finder information about Janet, as follows:
1- Janet, is 27 years old, is single and has no dependents
2- She works as a laboratory technician and earns $55,000 per year. Janet expects to receive a promotion in the near future, which should increase her pay to $65,000.
3- She describes her health as ‘very good’
4- Janet currently shares a rented flat with two friends, and contributes $275/week towards the rent and utilities
5- Janet currently is unable to save any of her earnings. However, she has indicated that she would like to exercise more financial discipline, and save for a home deposit within the next 3-5 years
6- One year ago, Janet took out a 4 year, $12,000 car loan at an interest rate of 12.74%. Her monthly repayment is $351. The car has comprehensive insurance.
7- Janet has a superannuation fund account with her employer, with a current balance of $22,750. She has nominated the fund’s default investment option: “Balanced”.
8- Analysis of her risk profile, suggests that she has a “growth’ profile
9- Janet has no personal insurance
10- She has not made out a will, nor has she an enduring power of attorney in place.
11- Finally, James discovers, after a telephone discussion with Janet, that she is due to inherit $130,000 from her grandfather’s estate, once probate is completed, in about 2 months.
Section 2 – Assessment Responses (Answer all question)
Now complete each of the following steps:
1. When providing advice, based on a client fact finder, how do financial planners deal with personal information provided by clients, and how do they deal with the need to obtain client personal information from third parties?
2. One of the primary goals of many fact finders is to assist a financial planner to determine the risk tolerance of the client(s) completing the fact finder. It is well established by social psychologists that the use of less than four questions, to measure an attitude to risk, provides a less accurate measure of an attitude, than a greater number. Explain why you think this is so.
3. If you were Janet Chan’s financial planner, what strategies would you recommend after studying her fact finder responses?
4. What documentation would you need to provide, or get Janet to complete, if she accepted the strategies put forward in the previous question?