Unit Title :- V3.1 Complex Lending
Assignment Type :- Assessment
Assessment cover sheet:
In order for your assessment to be marked you must complete and upload all tasks and this cover sheet via the AAMC Training Group portal. Your assessment tasks must be uploaded in an electronic format i.e. Word Excel PDF or Scan. A maximum of five (5) attachments (maximum 20MB each) can be uploaded for this assessment. Please see the step-by-step instructions in your Member Area on how to upload assessments. When you upload your assessment you will be asked to confirm that your assessment submission to AAMC Training is your own work and NOT the result of plagiarism or excessive collaboration, and that all material used from any third party has been identified and referenced appropriately. AAMC Training may conduct independent evaluation checks and contact your supervisor to discuss your assessment.
V3.1 Complex Lending Assessment
COMPLEX LENDING ASSESSMENT
You may be able to claim credit transfer for a unit/s of competency that you have previously completed with AAMC Training or another RTO. If you have been awarded a record of result or statement of attainment for any of the units detailed below then please go to the Credit Transfer tab in your Learning Centre and follow the prompts.
This assessment relates to the following units of competency:
FNSFMB502 Identify and develop complex broking options for client
FNSFMB503 Present broking options to client with complex needs
FNSFMB504 Implement complex loan structures
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Please note articles and resources used in questions below are for the purpose of training only and may be outdated but still acceptable to meet the requirements of the tasks.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 may also need to access some of the forms and templates in the Useful Resources section of your Members Area.
1. Your answers to the task questions are to be typed into this document and uploaded.
2. No assessment word count has been specified, although you are expected to provide good quality answers to each of the questions.
3. At the time of going to print the web links in this document were current. If you find a broken link please research yourself and advise AAMC Training of the issue.
4. Although some general discussion between students covering the assessment is allowed your responses to each of the questions must be an individual effort.
5. 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.
As you are aware our learning centre allows for 5 uploads per assessment (max 20MB per file). There are many attachments required for this assessment you may wish to embed documents as a way of minimising document uploads. Please see instructions on how to do this if you are not familiar with this practice.
Case Study Overview:
In order to achieve competence, you will need to demonstrate a clear understanding of complex loan scenarios, proving you are competent at Diploma level. This case study will determine your understanding of the complexities of various loan scenarios and the outcome for your clients.
The requirements for this case study is to prepare a submission for assessment in two parts.
Submission Part 1 – Fully completed set of NCCP Act Compliance documents including related interview and diary notes.
Submission Part 2 – Fully completed loan submission to the lender/s of your clients’choice. Please also note at this stage we have options for you to choose given the industry area you are currently servicing e.g. Investment property loan,Commercial/Business Loan, Self-Managed Superfund Loan or a Plant and Equipment loan.You make the choice but all required documents (no matter what industry you select) must be enclosed.
Please ensure the following documents and processes are included in your client and loan submissions in the following order:
Submission Part 1
1.A completed Client Needs Review/Fact Find form which has allowed you to review and research your client’s information.
2.A client signed Privacy Consent form to exchange personal information with other third parties. Because of the variances in the make-up of a number of the compliance forms used by the industry, this authority may already be included in the Credit Guide or other such compliance documents. At the end of the day, they all have the same meaning and intent.
A completed Statement of Credit Advice or a Credit Quote or a Credit Proposal Disclosure Document which you have presented to your clients’ with the recommendation of a lender. Your recommendation will in all probability provide the solution the clients are seeking. It should be in the appropriate format that the clients will easily understand. This document also serves as your authority to proceed with the lodgement of the loan application.
Complete Preliminary Assessment Checklist
Completed Credit Quote
Provide a completed Compliance Checklist
You must be satisfied that you have outlined the process that is required for the client to obtain appropriate finance and the risks (potential and real) of which your client should be aware.
Submission Part 2:
A completed AAMC Training Assessment Cover Sheet in which you acknowledge the submission is all your own work.
A fully completed loan application which will contain all documentary financial evidence to support the application such as:
- Financial Statements, Tax Returns, Trust deeds etc.
- Cash Flow Forecasts
- Offer and Acceptance or Contract of Sale for any purchase of real estate/ Invoice or Offer to Purchase from a supplier for Plant and Equipment
- Evidence of any other debt your clients may have which allows a serviceability to be completed with all available facts.
- A Serviceability Assessment to show clients can afford the loan requested.
- Notes to the lender addressing the points as listed in line with the course notes titled lenders submission lender notes, for example:
o Applicants’ details including history and needs
o Purpose of loan
o Brief details and value of security
o Brief details of loan make-up
o Loan amount requirement
- A SWOT analysis – refer to appendices for template of this document, you should also refer the results of your analysis in your notes to the lender.
- A Financial Ratio Analysis – A minimum of one or more if appropriate to be completed and the results mitigated/supported in your notes to the lender
- Reasons for major variations in the 2 years financial statements included in this assessment.
PLEASE NOTE: The SWOT and Financial Ratio analyses along with the reasons for variances will have to be submitted to AAMC Training as attachments that would normally be provided in the Notes to the Lender.
V3.1 Complex Lending Assessment – AAMC Training Group Australia.
What we are asking for here is an application that you would send to the lender. Whilst you would not normally include in your submitted lenders file the Clients Needs Review/Fact Find,Statement of Credit Advice/Client credit quote you need to maintain them on the clients file for audit purposes and we need to verify them for assessment purpose.
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 taking care not to provide financial advice unless licensed to do so
- Interpret and comply with industry regulations and codes of practice
- Identify the roles of associated financial advisers and work effectively with them
- Identify and document the situations where the client/s should be referred to an associated financial advisor for professional advice
- 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, diary notes and data
- Demonstrate that effective and appropriate follow up and feedback systems are in place to track progress of the loan application and to keep client/s informed
V3.1 Complex Lending Assessment – AAMC Training Group Australia.
To be deemed competent you must be able to demonstrate a comprehensive knowledge of:
- Acts and regulations affecting the financial industry
- Legislation impacting on financial services, including environmental, corporations and consumer legislation and State and Territory legislation, charges and taxes
- Relevant codes of practice
- NCCP Act disclosure requirements
- The role of mortgage/finance brokers
- Products available in the financial services industry
- Sources of information on financing such as lenders, government departments,accountants, solicitors and financial planners
- Methods of presenting financial data
- Credit assessment
- Risk Assessment
- Valuation practices and methodology.
V3.1 Complex Lending Assessment
The task is presented in the form of a case study around a complex Residential, Commercial, SMSF or Plant and Equipment lending scenario. It is your choice as to which loan option you select as a case study, provided however your submission meets the structured process we are seeking from you.
Whilst the traditional finance broker will look at the options via the traditional pathways of commercial and or investment property, please understand that (given Australia now ranks second in litigious actions) it would be wise to fully understand the client’s overall personal situation before making recommendations. It may even be more beneficial for the clients to place this transaction via their Self Managed Superannuation fund as that may produce a more tax effective solution for the client. Remember if you are not authorised to give advice in this area refer the client to one of your strategic advisors who is. AAMC Training provides qualification courses in this area.
Please ensure that you assess applicable fees and charges in line with requirements of the State/Territory in which you operate
The majority information to complete the case study is included in the scenarios provided or within the Learning Guide
Some information has been deliberately excluded and you will be required to identify and document these items. This Case Study has been designed so that it can be written as a complex property investment loan, a self-managed superannuation loan, a business loan or plant and equipment loan. It is up to the individual to determine which type is best for the client.
It is recommended that you use your own NCCP Act document templates to complete Submission Part 1
If you do not have access to these documents you can login to download sample templates from the AAMC Members’ area under the Useful Resources – Forms, Documents & Templates tab. There are a number of other forms available.