List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.
The candidate must demonstrate the ability to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including evidence of the ability to:
assess complex loans for at least three clients.
In the course of the above, the candidate must:
assess the impact of each option on the client’s financial circumstances
comply with relevant legislative, regulatory and organisational requirements pertaining to dealing with clients in difficult circumstances.
The candidate must be able to demonstrate knowledge to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including knowledge of:
features and benefits of credit products and their application requirements
complex features of a client’s financial situation including:
high assets
income
expenditure requirements
complex taxation
nature and forms of securities to be taken
legal issues
organisational risk management policy
different structures available to clients to meet their financial goals including:
sole trader
partnership
company
trust – family, unit and hybrid
partnership, company and trust in relation to:
financial statements and tax returns
income, expenditure and accounting treatments
communication methods between clients, accountants and real estate agents in relation to financial statements and business structure
financial data including add backs to calculate loan serviceability
sources of income where multiple entities or structures are included in the client relationship
financial information needed for data entry into loan calculators to confirm loan serviceability
risk issues relating to:
borrowing risk and gearing
specific product risk
institutional risk
risk factors and return expectations of the client
volatility of income and capital
types of security to be taken for complex loan structures:
joint and several personal or related company guarantees
multiple mortgages
registered company charges
second mortgages
the involvement of unit or family trusts as either borrowers or guarantors
relevant legislation including state and territory legislation, charges and taxes.
Skills in this unit must be demonstrated in a workplace or simulated environment where the conditions are typical of those in a working environment in this industry.
This includes access to:
legislation, regulation, and organisational policy and procedures relevant to credit risk
common office equipment, technology and consumables
client financial profiles
credit product information
software systems and data.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.