Assessor Resource

FNSFMK503
Advise clients on financial risk

Assessment tool

Version 1.0
Issue Date: May 2024


This unit describes the skills and knowledge required to determine a client’s financial risk profile, assess risk management options and produce detailed reports to present findings to clients and other relevant people.

It applies to individuals with specialised knowledge who use analytical skills and systematic approaches to advise and make recommendations in their area of responsibility.

Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Refer to the FNS Implementation Guide Companion Volume or the relevant regulator for specific guidance on requirements.

You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)


Evidence Required

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.

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Determine client risk profile

1.1 Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements

1.2 Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework

1.3 Assess risk based on understanding of client’s personal situation, operating environment or core business

1.4 Establish client’s risk tolerance level and discuss with client to confirm risk profile

2. Assess product risk relative to client risk profile

2.1 Identify a range of products that meet client objectives

2.2 Access information on risk associated with these products using appropriate analytical techniques

2.3 Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures

2.4 Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements

2.5 Assess alternative products and estimate long-term and short-term effects

2.6 Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client

2.7 Confirm that client understands the risk in any potential strategy recommendation

3. Report findings

3.1 Document risk management alternatives in accordance with organisational requirements and relevant legislation

3.2 Prepare and explain retail client disclosure documents, outlining client responsibilities to client

3.3 Update, modify and accurately maintain client information in accordance with organisational and legislative requirements

3.4 Prepare and file risk analysis documentation in accordance with organisational and legislative requirements

Evidence of the ability to:

determine the risk profile of the client

interpret and comply with relevant legislation

assess the impact of financial risks to the client and the organisation, and recommend strategies to control risk

accurately review and prepare risk assessment findings in a format suitable for presentation, including client disclosure documents

provide up-to-date information and advice on the risks and benefits of financial products and services.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

To complete the unit requirements safely and effectively, the individual must describe key features of client and organisational confidentiality requirements including:

compare and contrast financial information sources and products

outline key information to be obtained from clients

discuss the key risk characteristics

describe the key features of organisational policy and procedures for establishing client risk profiles and reporting

discuss the relationship between ethics and regulatory requirements including the key features of relevant legal principles, and disclosure and compliance requirements

compare and contrast risk assessment criteria and techniques

analyse key economic environment incidents and factors that can impact on financial performance including:

characteristics and impacts of economic and business cycles

government monetary and fiscal policies

interest rates, exchange rates and inflation

discuss product and strategy sensitivity to conditions including:

economic cycle

supply and demand

economic data

exchange rates

interest rates

government or regulatory policy

correlation risk with other markets or asset classes

outline the key theories of the management of investment and risk.

Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial markets field of work and include access to:

office equipment, technology, software and consumables

financial services product information.

Assessors must satisfy NVR/AQTF assessor requirements.

Submission Requirements

List each assessment task's title, type (eg project, observation/demonstration, essay, assingnment, checklist) and due date here

Assessment task 1: [title]      Due date:

(add new lines for each of the assessment tasks)

Assessment Tasks

Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Determine client risk profile

1.1 Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements

1.2 Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework

1.3 Assess risk based on understanding of client’s personal situation, operating environment or core business

1.4 Establish client’s risk tolerance level and discuss with client to confirm risk profile

2. Assess product risk relative to client risk profile

2.1 Identify a range of products that meet client objectives

2.2 Access information on risk associated with these products using appropriate analytical techniques

2.3 Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures

2.4 Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements

2.5 Assess alternative products and estimate long-term and short-term effects

2.6 Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client

2.7 Confirm that client understands the risk in any potential strategy recommendation

3. Report findings

3.1 Document risk management alternatives in accordance with organisational requirements and relevant legislation

3.2 Prepare and explain retail client disclosure documents, outlining client responsibilities to client

3.3 Update, modify and accurately maintain client information in accordance with organisational and legislative requirements

3.4 Prepare and file risk analysis documentation in accordance with organisational and legislative requirements

Evidence of the ability to:

determine the risk profile of the client

interpret and comply with relevant legislation

assess the impact of financial risks to the client and the organisation, and recommend strategies to control risk

accurately review and prepare risk assessment findings in a format suitable for presentation, including client disclosure documents

provide up-to-date information and advice on the risks and benefits of financial products and services.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

To complete the unit requirements safely and effectively, the individual must describe key features of client and organisational confidentiality requirements including:

compare and contrast financial information sources and products

outline key information to be obtained from clients

discuss the key risk characteristics

describe the key features of organisational policy and procedures for establishing client risk profiles and reporting

discuss the relationship between ethics and regulatory requirements including the key features of relevant legal principles, and disclosure and compliance requirements

compare and contrast risk assessment criteria and techniques

analyse key economic environment incidents and factors that can impact on financial performance including:

characteristics and impacts of economic and business cycles

government monetary and fiscal policies

interest rates, exchange rates and inflation

discuss product and strategy sensitivity to conditions including:

economic cycle

supply and demand

economic data

exchange rates

interest rates

government or regulatory policy

correlation risk with other markets or asset classes

outline the key theories of the management of investment and risk.

Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial markets field of work and include access to:

office equipment, technology, software and consumables

financial services product information.

Assessors must satisfy NVR/AQTF assessor requirements.

Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.

Observation Checklist

Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice Yes No Comments/feedback
Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements 
Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework 
Assess risk based on understanding of client’s personal situation, operating environment or core business 
Establish client’s risk tolerance level and discuss with client to confirm risk profile 
Identify a range of products that meet client objectives 
Access information on risk associated with these products using appropriate analytical techniques 
Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures 
Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements 
Assess alternative products and estimate long-term and short-term effects 
Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client 
Confirm that client understands the risk in any potential strategy recommendation 
Document risk management alternatives in accordance with organisational requirements and relevant legislation 
Prepare and explain retail client disclosure documents, outlining client responsibilities to client 
Update, modify and accurately maintain client information in accordance with organisational and legislative requirements 
Prepare and file risk analysis documentation in accordance with organisational and legislative requirements 

Forms

Assessment Cover Sheet

FNSFMK503 - Advise clients on financial risk
Assessment task 1: [title]

Student name:

Student ID:

I declare that the assessment tasks submitted for this unit are my own work.

Student signature:

Result: Competent Not yet competent

Feedback to student

 

 

 

 

 

 

 

 

Assessor name:

Signature:

Date:

Assessment Record Sheet

FNSFMK503 - Advise clients on financial risk

Student name:

Student ID:

Assessment task 1: [title] Result: Competent Not yet competent

(add lines for each task)

Feedback to student:

 

 

 

 

 

 

 

 

Overall assessment result: Competent Not yet competent

Assessor name:

Signature:

Date:

Student signature:

Date: