Finance and Mortgage Broking Management Assignments -
ASSIGNMENT 1 - LOAN SUBMISSION
Overview - The purpose of this task is to allow you to demonstrate that you can complete the major steps required in broking or writing a moderately complex loan for a customer - through identification, development and implementation of loan options while assessing and managing risks. The samples in Appendix a) and b) will prove helpful. Remember that what you prepare will need to be presented to the client orally and thus must be understood by them.
INSTRUCTIONS - Read the scenario (attached) provided and using the information and data supplied, prepare a formal loan submission for a lender using the following headings. Use subheadings where appropriate to ensure your submission will be easily read and understood by the lender. The client file should contain the standard client information and data that would be included in a typical submission for a loan of this complexity. Your lender submission should include as a minimum the following headings:
1. Borrower's Details
2. Background
3. Loan Purpose
4. Facility Details
5. Funds Position
6. Servicing Capacity
7. Security
8. Risk Assessment and Management (according to lender policy, guidelines and relevant legislation). Consideration must be given to any environmental, heritage or native title implications
9. Recommendations
10. Attachments
ASSIGNMENT 2 - LOAN SUBMISSION for EQUIPMENT FINANCE
INSTRUCTIONS - The assessment for this module is to prepare TWO submissions (see A and B below):
Part A: This first submission is for the client so that they have the facts on all their obligations and fees and the structure of the loan. Remember that what you prepare will need to be presented to the client orally and thus must be understood by them.
Part B: This second submission is for the lender - a loan application to the lender in order to gain pre-approval.
PART A - THE CLIENT
1. Prepare a list of questions that you would need to ask your clients about the proposed transaction, that is, prepare your needs analysis (ie. Fact Find).
2. In a suitable format, prepare a submission for the clients, a Proposal Document.
What your report should include:
1. The parties to the loan
2. The security
3. The facility details
4. Lender details (options, recommendations) that are able to lend
5. Confirmation of the client's complex requirements
6. The personnel that maybe involved: eg. the client's solicitor, accountant, financial advisor
7. The client's responsibilities, so the client fully understands the loan
8. An outline as to the process timing and what the client needs to arrange
9. The documentation needed to commence the borrowing
10. The name in which the client will sign the contract to purchase
11. A summary of all fees and charges
12. Your notes detailing how you have provided appropriate contact with the client throughout the complex broking process
PART B - THE LENDER
Prepare a loan submission to the lender for pre-approval.
Your submission should include as a minimum the following headings:
1. Borrower's Details
2. Background
3. Loan Purpose
4. Facility Details
5. Funds Position
6. Servicing Capacity
7. Security
8. Risk Assessment and Management (according to lender policy, guidelines and relevant legislation). Consideration must be given to any environmental, heritage or native title implications
9. Recommendations
10. Attachments
EVIDENCE REQUIREMENTS - In order to be deemed competent, you will need to evidence the ability to:
- Develop detailed broking options designed to maximise the client's outcomes and reach client objectives which incorporate elements from research and which address complex needs and issues
- Identify and describe key assumptions upon which the plan is based
- Provide a detailed analysis of research strategies and findings
- Test and make appropriate checks on a proposed plan for its integrity and compliance
- Assess the impacts of taxation, social security, economic and other government policies on client investment and financial requirements
- Interpret and comply with industry regulations and codes of practice
- Identify the roles of associated financial advisers and work effectively with them
- Assess broking options, financial markets and investment characteristics
- Use appropriate sales and marketing methodologies and provide justification and research evidence
- Gain client feedback on and/or agreement to the plan
- Prepare materials and personnel to effectively implement complex loan structures
- Establish appropriate audit trails and effectively document records and data.
ASSIGNMENT 3 - THEORY ASSESSMENT
When responding to the following questions you are to describe the processes and resources used in each situation. Please provide evidence of any templates, organisational material or technology used and/or provided to the client in each situation. All references to written material or websites used must be provided (simple format).
1. Describe how you gather the information required when establishing the client's complex lending requirements?
In answering this question you should refer to:
- Explanation of the services provided to the client
- Listening and questioning techniques you employ
- Your use of language appropriate to any cultural differences
- Your interpersonal skills and how you would deal with any emotive issues sensitively
- Your ability to build/establish rapport
- Your professionalism
- Your communication skills
- Your provision of appropriate contact with client throughout the complex broking process
2. Describe how you record and document your interaction with clients?
In answering this question you must refer to:
- Templates used to gather information in initial interview
- Diarising or recording telephone conversations
- Procedures that are established for critical implementation, timing and priorities
- The documentation gathered
- Any technology used to record or gather information.
- How you access and use appropriate specialist software, organisational templates, spreadsheets and databases
- How your recommendations and loan structures, as presented to clients, are documented according to organisation guidelines and procedures
3. Describe how you research and consider complex broking solutions based on the clients' needs?
In answering this question you must refer to:
- How special or complex features of a client's situation and objectives are discussed, reviewed and clarified
- The analysis of the client situation to determine opportunities and constraints
- Research into loan structures or options including those which are new or non standard
- Consideration of financial issues in terms of economic, legislation, taxation, legal, insurance
- In what conditions would the broker need to refer clients to a Tier One advisor (eg. financial advisor or accountant)
- How possible loan structure or options are analysed, modeled, prioritised, and measured
- The process used to reject inappropriate options including checks to ensure compliance with relevant acts
- Assessment of options to successfully achieve the client's objectives
- How you liaise with others, share information, listen and understand
4. Describe and/or provide evidence of how you identify and manage risk when dealing with clients with complex loan requirements?
In answering this question you must consider:
Risk evaluation criteria eg undertaking risk categorisation and determining the level of risk
Risk assessment tools (eg. valuation practices)
Communication of the aspects of the valuation result/s to clients
Discussion on the issues around an adverse valuation
Establishment of the probability of risk including the severity and/or impact
Identification of stakeholders and how throughout the loan process
- you seek their views
- provide pertinent risk information - clearly describe risks
- recommend amendments to existing controls and report any need for new controls
How would you as a professional in the industry ensure that you comply with industry and government requirements and professional codes of practice?
How would you read and interpret organisational and industry information?
5. Provide an example of how you present the loan options to the client, including an explanation of why you chose that option or options. This also must state the name of the lender and an explanation of why you chose that lender.
In answering this question you must consider: how you guide the client through options including:
- Discussion of impact - advantages, disadvantages, risks and financial implications
- Fees charges and commissions inclusive of any fees paid by the lender directly to the broker
- How would you explain to the client the lender conditions as they comply with relevant legislation, regulatory guidelines, industry sector compliance requirements and the lenders policy
- Research and documentation provided to the client
- Consultation required with other financial services professionals (eg. accountants, lawyers, financial planners, valuers, etc.)
- Confirmation that the client understands the options presented and any concerns are addressed
- Providing information on complaints resolution procedures (internal and external) as included in the information provided to the client.
6. Prior to presenting the loan options to the client did you identify any concerns that the client may raise? What preparation was completed to respond to these concerns?
Consider:
- Research/documentation materials
- Alternative recommendations
- Regulatory limits and financier guidelines
In your answer you should also refer to your ability to:
- Identify and respond appropriately to client concerns
- Exercise restraint when dealing with clients in conflict situations
- The process used to gain agreement to proceed from the client.
ASSIGNMENT 4 - SERVICING AND RESEARCH ASSESSMENT
Question 1 - In this exercise we are analysing some financial statements in preparation for completing a submission to a financier. The scenario is provided below and an income statement and balance sheet is then provided for Wholesale Butchers.
You will then have 3 tasks to do:
A. Using the 2 financial statements provided for Wholesale Butchers Pty Ltd, calculate the ratios in the table provided and comment as to the risk using Low/Medium/High rating:
B. Complete the manual Serviceability Analysis for Wholesale Butchers Pty Ltd by inserting the figures into the table provided.
C. List your comments on the outcome from your completed Serviceability Analysis as you would if presenting this in a submission to a lender.
Part A - Using the financial statements provided - Wholesale Butchers Pty Ltd - you should fill in the table below by calculating the ratios in the 2016 and 2017 columns and in the Risk Grade column comment as to the risk using the grading of LOW, MODERATE or HIGH.
You should also make comments/notes on your analysis.
Part B. Using the financial statements provided - Wholesale Butchers Pty Ltd - complete the serviceability analysis below.
Part C. Complete comments on the outcome from the Serviceability Analysis, as you would if presenting this in a submission to the financier.
Question 2 - Please research the Internet (eg. Google) on the subjects below and review the course material, then provide comprehensive answers to the following:
A. TRUSTS
- What is a Unit Trust?
- What is a Discretionary Trust?
- What is a Hybrid Trust?
- What is a Discretionary Family Trust?
- What is a Trustee?
- Define the differences of each type of Trust, including the obligation/s of the Trustee
- Provide an example of when each type of Trust would be used.
B. COMPANY
- What are the legal requirements of a company?
- What are the personal obligations of directors by law (please summarise)?
- Can anyone be a director of a company?
- What is the minimum number of directors required?
Question 3: From your research activities please provide answers to the following (from a Financial Accounting perspective):
- What is a Balance sheet?
- What is a Profit and Loss statement?
- What is Depreciation?
- What is Liquidity Ratio?
- What is Current Ratio?
- What is Debt to Equity Ratio?
- What is a Cashflow Statement?
- What is an Asset?
- What is Liability?
- How is a Net Profit determined?
- How would you define Equity?
- Under Australian taxation conditions, what are allowable expenses (provide 3 acceptable examples)?
Question 4 - From your research activities please provide a definition of the following products and give examples:
- Commercial Bank Bill
- Invoice or Factoring Finance
- Chattel Mortgage
- Asset Finance product or Equipment Finance
Question 5 - In the Australian Standard AS/NZS ISO 31000:2009 there are 11 Principles of Risk Management. List 6 of them and briefly state what each one is about.
Question 6 - There are many ways that an Industry Analysis can be completed. We have provided a sample below of a simple process to categorise the overall risk of any business/industry that you may choose to analyse. Please review the entries on the table below. To simplify the process some factors have been grouped together to alleviate any overlap of impact.
Task: In approximately 200 words, explain why you believe it is necessary to categorise risks.
ASSIGNMENT 5 - SUSTAINABILITY PLANNING ASSESSMENT
Task: Please construct a written plan for sustainability for your business (or proposed business). Your plan should be for a business which is finance in nature eg. Mortgage broking. Please incorporate all the points below into your plan. Length should be more than 1000 words ie. two typed pages. Note, if you are in, or propose to be in, a sole trader business or working within a structure that has their own business plan, then not all of the points may be applicable to you however they should be covered in your assignment. Simply say after the point "may not be applicable to my business" however most points should be. Also please note that profitability is crucial to sustainability and should be considered in any plan.
Points to cover in your plan:
- Define scope of sustainability policy - what do you want to achieve.
- Gather information from a range of sources to plan and develop policy.
- Identify and consult stakeholders as a key component of the policy development process.
- Include appropriate strategies in policy at all stages of work for minimising resource use, reducing toxic material and hazardous chemical use and employing life cycle management approaches.
- Make recommendations for policy options based on likely effectiveness, timeframes and cost.
- Develop policy that reflects the organisation's commitment to sustainability as an integral part of business planning and as a business opportunity.
- Agree to appropriate methods of implementation, outcomes and performance indicators.
- Promote workplace sustainability policy, including its expected outcome, to key stakeholders.
- Inform those involved in implementing the policy about expected outcomes, activities to be undertaken and assigned responsibilities.
- Develop and communicate procedures to help implement workplace sustainability policy.
- Implement strategies for continuous improvement in resource efficiency.
- Establish and assign responsibility for recording systems to track continuous improvements in sustainability approaches.
- Document outcomes and provide feedback to key personnel and stakeholders.
- Investigate successes or otherwise of policy.
- Monitor records to identify trends that may require remedial action and use to promote continuous improvement of performance.
- Modify policy and or procedures as required to ensure improvements are made.
Attachment:- Assignment File.rar