FNS40815 Finance And Mortgage Broking Management

Question:

Task 1: Identify and Interpret Compliance Requirements

  1. Identify compliance requirements

Mortgage brokers face important compliance requirements, the foremost among them being the reasonable lending provisions of the NCCP Act. The penalties for non-compliance include loss of license (for businesses) and removal from the industry (for individuals). If fraud is involved there may also be the criminal penalties of fines and / or imprisonment.

Compliance requirements are not static. It is therefore important to stay up to date with them.

Mortgage brokers also need to keep up-to-date with the actions of the regulatory authorities such as APRA and the Reserve Bank. Their actions may not amount to direct regulation, but through their effects on interest rates and bank lending these authorities can have a very direct impact on the business mortgage brokers are able to do.

(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What must a mortgage broker do to comply with the unsuitability test?

(b) List the sorts of items a client’s requirements and objectives could include (as indicated by ASIC).

(c) Leading credit providers and other financial organisations have code of ethics, sometime called codes of conduct. Select one of them and summarise it by itemising its main principles.

(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit Guide.

(e) It is important to keep up to date with compliance requirements so that the required changes can be made to organization procedures and product offerings.  Suggest three sources that you can use.

(f) Explain the requirement for Australian Credit Licensees to keep a training register.

(g) Explain APRA’s current attitude towards bank lending for investment properties.

Identify and Interpret Compliance Requirements Continued

1.2 Interpret, analyse and prioritise identified compliance requirements

Some of the compliance requirements are difficult to meet. Unfortunately, also there have been some ‘rogue’ mortgage brokers who have failed to comply – to the disadvantage of their clients.

The finance planning industry has been plagued by non-compliance in the largest planning groups, with the image of the industry being substantially tarnished as a result. It may not suffer greatly because of the absence of an alternative source of financial advice.

This is not so with mortgage brokers. They are just establishing their reputation and consumers always have alternative of going to the lenders directly.

(a) Select three tasks you perform on a regular basis that are subject to compliance requirements.

(b) Identify the compliance requirements that are relevant to the three tasks selected, indicating the name of the relevant legislation, regulation or code of conduct.

(c) How does your organisation monitor your compliance?

Task 2: Deliver and Monitor a Service to Customers

  1. Identify customer needs

The relationship with a client is generally described as beginning with the establishment of empathy. In other words, it is first necessary for a mortgage broker to establish that he / she is truly interested in the client and the client’s needs. It is only after that that the mortgage broker has established the right to interview a client.

(a) Use the internet or any other source to find a definition of empathy.

(b) List three open-ended questions that assist in developing empathy with a client? How do such questions indicate empathy?

(c) List and explain the steps involved in an ‘active listening approach’.

(d) How is client service commonly monitored in your organisation?  What are the two possible outcomes?

Task 2: Deliver and Monitor a Service to Customers Continued

2.1 Deliver a service to customers

In a survey on the reasons for referrals conducted by David Maister, only 10% were due to the quality of technical work. The remaining 90% of referrals were due to the quality of service.

This indicates that the key to maintaining client relationships and gaining referrals is the provision of outstanding service. This has been described by Maister as ‘over-servicing’.

(a) Describe three ways in which a mortgage broking organisation can attempt to ‘overservice’ clients?

(b) How would you keep a client informed about the progress of an application as it passed through a creditor provider’s hands? What approximate timing might be involved?

(c) Describe how you might attempt to resolve conflicts with clients.

(d) How do you can prepare clients for the hiccups that can happen while their credit application is being processed

(e) The chapter on Operating a Mortgage Broking Business contains an example suggesting that a mortgage broker acting in the best interests of clients should act as a Protector rather than an Expert.  What are the implications for this in regard to (i) advice given to clients and (ii) recommending the most suitable loan products?.

(f) How could you prepare yourself to deal with client concerns?

(g) Give examples of the following legal breaches: breach of the duty of care, false and misleading conduct, unconscionable conduct & conflict of interest without disclosure.

(h) Once a desirable market segment has been identified, a mortgage broking business can put its mind o developing suitable marketing strategies. List examples of different strategies that might be used.

(i) What steps can be taken to keep up to date with product changes and ensure that this knowledge is properly disseminated?

(j) What are the procedures for dealing with client complaints in your organisation?

(k) What normal protocols should for protecting the confidentiality of client files?

Task 3:  Contribute to OHS Hazard Identification & Risk Assessment

  1. Contribute to workplace hazard identification

Occupational health and safety hazards are often considered only in terms of physical injury, perhaps the result of working with heavy machinery, working in an excessively noisy environment, or slipping or falling. Just as relevant, however, is work-related stress. This describes the physical, mental and emotional reactions of workers who perceive that their work demands exceed their abilities and/or their resources (such as time, help/support) to do the work.

Other ‘Tip Sheets’ from the same website may also be useful.

(a) How would you define workplace stress?

(b) Suggest at least two ways in which work-related stress may affect client relationships.

Task 3:  Contribute to OHS Hazard Identification & Risk Assessment Continued

3.1 Gather information about workplace hazards              In assisting in the control of work-related hazards, you will need to be access suitable information.

(a) Explain the distinction between ‘job demands’ and ‘job resources’ risk factors.

(b) Identify two ‘job demands’ risk factors that are relevant to your workplace and describe what detrimental effect they might have.

Task 3:  Contribute to OHS Hazard Identification & Risk Assessment Continued

3.2 Contribute to OHS risk assessment

Once risks have been identified, they should be controlled. A way of doing this is to use “job resources” available in the organization. 

Once again, please refer to the ‘Glossary of Job Demands and Job Resources’ that was referred to earlier.

Apart from OHS issues, there are other significant risks that have to be dealt with at all levels in an organisation.

(a) List the job demand factors you have identified previously and for each one select one or more job resources that might be used to mitigate these risks.

(b) Select one of the job resources listed and suggest how you could apply it in your work situation.

(c) Select a significant risk issue, other than OHS issues, that has an impact on the way you perform your duties and explain how it is managed.

Task 3:  Contribute to OHS Hazard Identification & Risk Assessment Continued

3.3 Environmental risks

The risks that should be considered in management decision-making include environmental risks.

This is giving rise to a new way for businesses to report to stakeholders that goes beyond traditional financial reporting. It is called “triple bottom line” reporting.

(a) List the three criteria of triple bottom line reporting. What is the likely effect of this form of reporting on management decision-making at all levels.

(b) Select the annual report of a leading financial organization such as a major bank and, after identifying the organization, summarise what it says about its environmental impact (suggested maximum length of 50 words). 

(c) Briefly indicate the environmental protection assistance that your business organization is able to receive from your State or Territory environment protection agency.

Contribute to OHS Hazard Identification & Risk Assessment Continued

3.4 Effective team management

Risk assessment also requires effective team management and participation and the right sorts of questions being asked.

(a)Describe the benefits of team meetings.

(b) Consider your own role in team meetings and describe the approach you and other members should take to information sharing.

(c) Give examples of the types of risks that should be considered in all team meetings.

(d) Explain why leadership is important in risk management.

Task 4: Manage Personal Work Priorities and Professional Development

  1. Set and meet own work priorities

One of the challenges we face in a workplace situation is time management. Management theory on the subject began with the Pareto Principle, suggested that only about 20% of the things we do produce 80% of the results we achieve. The challenge than becomes to set time aside for the 20% that matters.

The theory was taken further with Stephen Covey’s Time management matrix.

(a) Describe Covey’s Quadrant 2.

(b) List three of your work activities that should belong in Covey’s Quadrant 2.

(c) Suggest ways that you might utilize to ensure that proper time is spent on Quadrant 2 activities so that stress is avoided.

(d) Digital diaries are now available as both computer and mobile phone apps. Describe the place of digital diaries in managing personal work priorities.

(e) Describe the importance of setting goals in terms of personal well-being.

(f) What does Stephen Corvey recommend for “re-creation” (a Quadrant 2 activitiy),

(g) What are the common characteristics of work goals?

Manage Personal Work Priorities and Professional Development Continued

4.1. Develop and maintain professional competence

One of the outcomes of spending more time on Covey’s Quadrant 2 is that we have more time for professional development. Desirable professional development includes a range of activities begin with reading the morning press to undertaking a degree course at university. Increas

Setting professional development goals is part of the goal setting we should undertake in are working life. If we have personal goals we are more likely to make things happen. Also, research suggests that goal setting relieves stress and increases physical wellbeing.

Goal setting of this type is a Covey Quadrant 2 activity. As such it is something we have to deliberately set time aside for. This may be easier over time because that way it becomes more of a habit.

Ideas for professional development do not come out of a vacuum. You should be prepared to seek advice from colleagues and other mortgage brokers.

(a) List three activities you might consider undertaking to increase your competency (in addition to formal professional development training) to comply with ethical, legal and procedural requirements.

(b) Describe how you can obtain ideas for professional development from (i) feedback and (ii) competency standards.

(c) Where do you see yourself in three years time? List three skills or competencies you will need to arrive there. Against each skill or competency nominated, suggest how you will attain it.

(d) Suggest ways in which mortgage brokers may network to assist other mortgage brokers.

Task 5: Develop and Nurture Relationships with Clients, Other Professionals and Third Party Referrers

5 Develop professional business relationships

David Maistre has defined professionalism as an ‘‘… an unqualified dedication to excellence in serving clients and their needs.’ This has important implications for how client relationships are established and maintained.

Mortgage brokers are also able to develop and benefit from relationships with other brokers because their main competition is not with each other. Rather, it is the banks and other financial institutions.

Networking within the industry is therefore important.

Meeting other mortgage brokers requires much the same techniques as meeting clients, other professionals and third party referrers. The relationship depends on the development of rapport and the ability to contribute to the relationship in key knowledge areas.

(a) What needs to be demonstrated at the outset in a client relationship? When is appropriate to demonstrate competence?

(b) Imagine that you are explaining the function of mortgage broking to a client. What words would you use?

(c) Explain the importance of a code of ethics in the relationship between a professional and clients.

(d) Drawing on your own experience or the experience of a more experienced colleague or manager, describe a situation where a need was identified to use language and concepts appropriate to cultural differences. How was the need met?

Task 5: Develop and Nurture Relationships with Clients, Other Professionals and Third Party Referrers Continued

5.1 Build and maintain business networks and relationships

For a relationship with a client to continue, they need an assurance of continuing mutual benefit. The continuing mutual benefit is also important in relationships with other professionals, including relationships with ‘outsiders’ such as accountants, real estate agents and other professionals.

(a) List two others type of professional your organization uses to develop client relationships and indicate in each case how it is able to provide them with a benefit in the relationship.

(b) Surveys indicated that two-way dialogue, or ‘conversation’ is of overriding importance in developing client relationships, relationships with colleagues and also other professional relationships. List four characteristics of this process.

(c) Other professionals that a mortgage broker might forms contacts with are referred to in marketing literature as ‘Centres of Influence’ (COI). Why does David Maistre place them in his ‘second tier’ in order of effectiveness. What activities in David Maistre’s first tier does your organization engage in.

(d) List four occupations and professionals that may become Centres of Influence.for your organisation.

Task 6: Promoting the Effective Use of Credit

Read the following scenario then answer the questions that follow.

Roslyn qualified as a schoolteacher some years ago, but failed to take up a teaching position after graduating because she became a single mother. Fortunately, she has been able to live with her widowed mother, but now that her daughter has reached school she is taking up a position as a schoolteacher some suburbs away.

Because of the distance of her new school from her parent’s home she will need to buy a car. After careful consideration, she has chosen a small hatchback that has an on-road cost of $15,800.

She will be working full time with a starting salary of $50,000.

She knows little about finance and has come to you for advice. She would prefer to finance the full cost of the car because she has little in savings.

Task 6.1.

(i)   Suggest two financing options that Roslyn might consider.

(ii)  Explain the main features of each.

(iii) Choose one of these options and explain your choice. Are there any disadvantages that need to be considered?

Task 6: Promoting the Effective Use of Credit Continued

Task 6.2.

Write a letter to Roslyn letting her know about your preferred, explain how she will make payments and giving your reasons for choosing it as the option more clearly meeting her needs. You should take care to proofread your letter.

Task 6.3.

Roslyn is concerned that the lender will apply for a credit report. Explain:

(i) The procedure and cost involved in obtaining a copy of her credit file.

(ii) The right of a lender to access credit report information.

Further information

Roslyn mentions that her mother’s washing machine has broken, and she urgently needs a replacement washing machine. The cost is less than a thousand dollars and she plans to use her credit card for the purchase. She tells you that she will make the minimum required repayment per month until she pays the machine off.

Read less
QUALITY: 100% ORIGINAL PAPER – NO PLAGIARISM – CUSTOM PAPER

Leave a Reply

Your email address will not be published. Required fields are marked *