Section 1: Instructions for completing and submitting this assignment
Completing the written assignment
Complete Section 2 (the written assignment). Section 2 has three (3) parts and many activities listed below:
Part A (relates to Topics 1 and 2)
- Activity 1: Client service charter and relationship building
- Activity 2: Nurturing relationships
Part B (relates to Topics 3 and 4)
- Activity 3: Providing technical guidance
- Activity 4: Compliance systems
- Activity 5: Meeting compliance obligations
- Activity 6: Managing risk
Part C (Topic 5 but draws from all topics)
- Activity 7: Action plan.
The information and resources that can assist you in answering the questions in this written assignment can be primarily sourced from your topic notes. Some data may have to be externally sourced. You are required to show competence in each Activity in order to be competent overall.
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.
Section 2: The written assignment (student to complete)
Part A
Topic 1: Fundamentals for engaging your clients
Activity 1: Client service charter and relationship building
This question shows evidence of your ability to develop and maintain positive relationships using your organisation's social, business and ethical standards, including the need for confidentiality.
You will use the following Client Service Charter for this question:
Activity 1
You work for Caring Financial Planners Pty Ltd.
Assume you are meeting with a new referral partner and you want to develop a positive relationship with that person by showing them how you maintain good relationships in line with your organisation's social, business and ethical standards.
To achieve this, you will explain to the referral partner how you maintain these relationships by specifically adhering to the client service charter provided here (at the beginning of the question) and how you will apply these principles when dealing with referrals.
In your answer you should:
- Identify one (1) of the ethical, social or business principles that are contained in the client service charter for Caring Financial Advisers that you believe are key to showing your relationship skills.
- Provide an example of a client interaction that shows how you act in line with this principle to maintain a positive relationship with the client (this may be real or invented). Describe exactly what you did for the client as if you are talking to the referral partner and explaining how you acted in line with this principle. For example, "I have a client who comes in every six months for a review. He has been a client of mine for about 5 years. Last time we met, he brought in a bottle of Penfolds Grange Hermitage which he had won at a charity event. He doesn't like red wine, so he wanted me to have it. And as much as I would have loved to have it, I had to remind him that our principles don't allow us to take benefits from clients, so I would have to pass on the offer. He was a little surprised, so I got out a copy of the charter and pointed it out. I explained that it is important for me that all clients are treated the same, and I wouldn't want anything to potentially harm that with other clients. I showed him the price for a similar bottle and suggested he might want to sell it, or give it to someone for Xmas instead. He thought that selling it wasn't a bad idea".
- Demonstrate that you can provide a description of your interactions with a client, without giving away any confidential information about the client.
- Explain why this behaviour will be of benefit to the referral partner. For example, "So, I hope that this example shows you that I won't treat any of your clients differently to any of your other clients, and that it is important to me to maintain high standards when dealing with clients".
Topic 2: Improving your skills
Activity 2: Nurturing relationships
This question allows you to demonstrate skills in nurturing relationships.
Activity 2
Explain why skills in:
- self-awareness,
- reflective practice,
- emotional intelligence,
- negotiation, and
- conflict resolution
are important for YOU to demonstrate in your role as a professional adviser. Consider how they relate to you and use this question as an opportunity to demonstrate your ability to apply the material to your current role.
Part B
Topic 3: Developing your professional practice
Activity 3: Providing technical guidance
This question enables you to show how you build and maintain business relationships and how you provide technical guidance to other staff in the practice.
Activity scenario
Consider the following scenario:
- You are a senior financial adviser who is an expert on Aged Care and Retirement planning.
- A new, assistant adviser Mike, who has less experience than you, comes to you seeking advice about a new client.
- Mike thinks that he can handle the meeting on his own but due to company policy, Mike includes you in the meeting and you will oversee the statement of advice.
- At one point during the interview, Mike makes a statement that you know is incorrect about current rules regarding Aged Care fees and the principal residence. Mike claimed that a former principal residence and any net rent is always exempt from the Centrelink income and assets tests and for the calculation of the means tested fee. You are aware that this rule changed in 2016.
- During the meeting, you do not correct Mike, but tell the clients that the rules are complex and that you will provide details of their specific situation in the plan.
- After the meeting, you realise that Mike needs some coaching around improving his technical skills
- Use the SBIA technique to address this knowledge gap with Mike and to explain how you can help Mike handle these sorts of situations better in the future.
Activity 3: Part 1
Applying the SBIA feedback technique and taking note of the guidance provided in the course notes for you as the coach, prepare a scripted conversation of the feedback that you would give to Mike in each of the four areas:
- Situation: Explain to the individual the specific example of the situation in which the lack of technical expertise was observed.
- Behaviour: Describe the specific behaviour to the individual.
- Impact: Explain the specific impact of their behaviour.
- Alternative: Give a specific example of a different type of behaviour that could have been used in the same situation, or an alternative approach that the individual could have used in the situation.
This script should be a dialogue with the person which brings them to a realisation of the behaviour and to take self-responsibility for the behaviour rather than a script simply telling them the issues. If someone realises the consequences of their behaviour for themselves, they will also own the correction for themselves.
Ensure you prepare your answer as a script which incorporates both your side of the conversation, and the individual's responses.
Activity 3: Part 2
Answer the following two (2) questions (a)-(b):
(a) Identify at least one (1) source of information on Aged Care that you could distribute to the assistant adviser, and other staff in the practice who would benefit from this information.
(b) Explain what you can do, as the expert, to build the knowledge of other staff in the practice (para planners, client advisers) using this information.
You should provide examples of actions that you will take, not how you would organise someone else to do this for you (i.e. ‘Inviting an expert to speak' would not be a suitable response).
Topic 4: Protecting your practice
Activity 4: Compliance systems
Establish and document procedures for compliance of the practice with relevant legislation, regulations and codes of practice.
These questions allow you to demonstrate that you can:
- assess risks and benefits associated with using legislation and regulation databases and systems against practice requirements to make recommendations
- describe the key features of:
- financial practice administrative processes and systems
- human resources procedures and training options
- office information technology systems and software.
Activity scenario
You have been hired as the new practice manager for a medium-sized financial planning business (four senior planners, 10 support staff, and 650 retail clients).
You have been asked to undertake an internal review of the current compliance systems used by the business. They are looking for solutions to better manage their client data, their adviser training and their data back-up options. They are also concerned about keeping up to date with legislative changes.
Currently:
- No-one in the practice is responsible for monitoring legislative data bases but they sometimes check them. In general, they rely on information from their industry association about any relevant compliance issues that may be arising, or have arisen.
- Client data is kept in the financial planning software system but the SOAs are saved by each planner for their own clients on a local hard drive, and backed up when the advisers remember to do so, ideally about once a week.
- The admin staff have access to adviser calendars for booking appointments but don't have access to the financial planning software and related database. The admin staff set reminders in the adviser's calendars to call clients for reviews once they see that the client has signed on for ongoing service.
- Advisers get together once a month for a discussion session at which one adviser presents a recent news article, legislative update bulletin, or magazine article about a technical topic and they all discuss it. Tracking of the CPD activity is done by completion of a spreadsheet by each adviser each month and checked by their manager at the end of the year to make sure they are meeting targets
Activity 4
Answer the following two (2) questions (a)-(b).
(a) What would be the benefit of assigning someone to monitor legislative or regulatory databases check for relevant changes to legislation? Why is it also important to have industry association updates and not to just rely on the legislative database?
(b) Provide the business with a description of an alternative to their current method for each of the following:
- a processes or system they could use to better manage client SOAs
- an alternative way for the admin staff to track clients' progress through the business
- a way they can meet their CPD obligations and track them more efficiently.
Activity 5: Meeting compliance obligations
This question allows you to demonstrate that you can identify and establish appropriate resources, processes and procedures for ensuring the practice can meet its legislative and regulatory requirements.
These questions allow you to demonstrate that you can:
- identify legislation, regulations and codes of practice relevant to the practice
- establish and document procedures for compliance of the practice with relevant legislation, regulations and codes of practice
- ensure measures are consistent with Australian state and federal regulations for licensees and authorised representatives
- establish and document procedures for ensuring currency of information within practice
- develop strategies to obtain a wide range of relevant information and assess its accuracy and relevance
- identify key stakeholders and consult regarding issues and proposed procedures and guidelines
- establish clear decision-making procedures on legislative and regulatory issues.
Activity summary
Answer the following three (3) questions (a)-(c).
At the end of this activity is a compliance procedure ‘Compliance procedure: Variations from your advice' which was written for a financial planning business prior to the implementation of the FOFA reforms. You are required to:
(a) Identify relevant legislation, codes of conduct and regulatory guides.
(b) Identify the key stakeholders who should be consulted or informed about a change to this compliance procedure and the steps you would take to ensure that they are consulted.
(c) Rewrite the procedures in the case study to include the changes you believe would ensure the above practice could meet its legislative and regulatory requirements and act in line with the relevant code of conduct and ethics.
Activity 5
(a) Identify relevant legislation, codes of conduct and regulatory guides:
(i) Identify at least three (3) regulatory guides that have been modified since this compliance procedure was written that are relevant to the provision of financial advice.
(ii) Identify one (1) current code of conduct/code of practice which relates to this compliance procedure and the date it was last revised.
(iii) Identify the legislation that is colloquially referred to as FOFA.
(b) Identify the key stakeholders who should be consulted regarding a change to this compliance procedure.
(c) Rewrite the procedures in the case study to include the changes you believe would ensure the above practice could meet its legislative and regulatory requirements in line with the legislation, regulatory guides and codes of conduct you identified in part (a).
You should consider the impact of the best interest obligations, including but not limited to section 961G and section 961E of the Corporations Act 2001 (Cth), any changes to the adviser codes of conduct, and any advice provided in the regulatory guides that relate to adviser conduct and disclosure.
Guidance: Please copy and paste the case study text into the box below and make your changes. Ensure any changes or updates you make are marked/tracked to show what you have done (or completed in a different coloured text).
Activity 6: Managing risk
These questions allow you to demonstrate that you can:
- establish risk management procedures for compliance with legislation and regulations
- develop and document compliance and risk management procedures
- apply cost-benefit analyses to ensure optimal development of systems and procedures
- comply with risk management standards
- establish appropriate resources for ensuring the practice can meet its legislative and regulatory requirements.
Activity 6
Use the risk management matrix, risk management plan template and cost/benefit analysis template provided below for your responses.
For your own financial planning practice (or if you do not work in one you may use a theoretical practice) consider the following five processes, procedures, or resources that may lead to non-compliance with financial advice regulations:
A. Client management systems to track commission payments, fees and eligibility of client to be charged commission (grandfathering provisions) based on situation or products being recommended.
B. Auditing process for checking that advice provided by advisers in the practice meets obligations.
C. The pricing model (process by which fees are determined) for advice for different clients and situations.
D. Process for identifying client review dates and opt-in requirements.
E. Procedures to meet and demonstrate that Best Interest has been considered before providing advice, including identification of the subject matter of the advice.
Answer the following three (3) questions (a)-(c) including all sub parts to each question.
(a) Refer to the Risk Assessment Matrix to consider each risk item and rate them in terms of the risk they pose to compliance based on the impact of the process or procedure not working and the probability of this occurring. Then prioritise the risks according to their overall risk rating.
(b) Develop a risk management plan using the template provided on the next page to address these risks, even those that do not require changes, making it evident that you have:
- appropriately assessed and rated risks
- communicated to key stakeholders the risks and their rating
- considered the resource implications of managing the risks to maintain compliance.
(c) For the risk you have identified as the most critical in the table above answer questions (i) to (iv).
(i) Explain how you will monitor your business to ensure your professional practice remains compliant.
(ii) Explain what you will do to manage the risk, including any changes you need to make to the process, procedure or system.
(iii) Include a summary of the resource implications (staff, budget, IT) for this process.
(iv) Use the table provided below to apply a cost/benefit analysis to managing the risk.
Make a reasonable estimate of costs and benefits in each scenario.
Part C
Topic 5: Planning for success
Activity 7: Action plan
Activity 7 allows you to consider all the information presented in this subject, and use it to develop an action plan for your business. Refer to the results of your GENOS survey completed in Topic 2.
These questions allow you to demonstrate that you can:
- build and maintain business networks and relationships
- provide technical and professional guidance
- nurture relationships and build on referral business for the long term
- provide technical and professional information to staff and peers
- act as practice reference for any special areas of expertise.
- develop and maintain positive relationships using organisation's social, business and ethical standards
- identify relevant associations, conferences and other relationship building opportunities
- identify relevant business contexts for networking and relationship development
- model and communicate ethical behaviour requirements to staff and peers.
Activity 7
This activity provides you with the opportunity to create a plan for developing your business over the next three years, and then documenting the actions you can take in the next 12 months to start realising your goals.
You will focus on where you want your professional practice to be in the next three years using the following categories to organise your plan:
- Behavioural - choose one (1) area that requires improvement, or that you would like to excel at from your GENOS survey results from Topic 2 and one goal around how you will ensure that you always act in line with the ethical obligations of the industry .
- Technical - choose two (2) areas in which you would like to improve your technical knowledge, in relation to financial planning or related advice, such as tax, etc.
- Practice - include one (1) business network or referral alliance strategy here and one other goal to improve the success of your business.
You must have at least two (2) goals for each area.
Note: Maximum word length is 500 words.
Attachment:- Client Engagement Strategies.rar