FNSIBK504B - Provide personal advice in life insurance broking products and services
Assessor Resource
FNSIBK504B Provide personal advice in life insurance broking products and services
Assessment tool
Version 1.0 Issue Date: May 2024
For those brokers seeking to meet ASIC training standards:
Personal advice is defined by ASIC in its regulatory guide relating to the conduct and training of financial service product advisers. This unit requires the application of skills and knowledge to identify where the consumer is seeking advice based on their personal needs rather than general product advice and to follow the appropriate steps to provide this level of tailored advice. It also requires clarification of the broker’s role in providing this service
Life insurance products are defined by ASIC as complex and the choices a client makes may have an increased potential to impact significantly the client’s financial situation. Consumers place a greater reliance on the broker’s competency for advice on these products and adviser training at the Tier 1 level is required
Apart from the advisory skills, there is a substantial generic, insurance core and specialist life insurance and insurance broking product knowledge component that must be developed by the adviser as part of the requirements to meet ASIC training standards for Tier 1 personal advice by an insurance broker.
This unit applies to insurance broking roles and may be applied within organisations of various sizes and across a range of customer bases.
This unit describes the performance outcomes, skills and knowledge required to advise retail and/or wholesale clients in life insurance broking products and services. It encompasses preparation of an insurance program for a prospective new broking client or remarketing to an existing client.
This unit is applicable to individuals working within an insurance broking or other financial services enterprise and in broking adviser roles subject to licensing regulation by the Australian Securities and Investments Commission (ASIC). It covers the functions undertaken by an insurance broker providing personal advice in life insurance.
Conditions relating to ASIC training requirements and accreditation should be obtained from ASIC.
You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)
Prerequisites
Not applicable.
Employability Skills
This unit contains employability skills.
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.
The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.
Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
maintain and apply knowledge of products and specialist knowledge of general insurance products, practices, global markets and exposures
apply knowledge in practical situations to tailor specific advice to the client
comply with industry and of organisation obligations and objectives
interpret available information about the client’s risk needs and products
apply discretion and judgement in developing an appropriate solution.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables
access to organisation records
access to organisational policies and procedures.
Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity, which combines the elements of competency for the unit, or a cluster of related units of competency
observing processes and procedures in workplaces
verbal or written questioning on underpinning knowledge and skills
evaluating samples of work
accessing and validating third party reports
setting and reviewing workplace projects and business simulations or scenarios.
Guidance information for assessment
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.
Required skills
well-developed communication skills to:
negotiate with clients and others
determine and confirm information, using questioning and active listening techniques
gather information and negotiate to obtain agreed outcomes
liaise with others, share information, listen and understand
use language and concepts appropriate to cultural differences
numeracy and IT skills to:
perform calculations related to achieving required outcomes
collect and analyse data to identify client needs
use appropriate calculators or statistics to determine insurance cover requirements
identify product information and access appropriate databases and spreadsheets
use computer applications (word processing, spreadsheet, database, specific purpose computer systems) to assist in achieving required outcomes
access and update records electronically
access web-based information services
well-developed literacy skills to read and interpret documentation from a variety of sources and record and consolidate relevant related information and prepare submissions
research and analysis skills for accessing and interpreting relevant information and product research and analysis to formulate recommendations
organisational skills, including the ability to plan and sequence work
presentation skills for information to clients and insurers
needs analysis skills
data analysis and interpretation skills.
Required knowledge
core insurance knowledge:
operation of life insurance markets: definition of a life insurance product, characteristics and participants of the Australian insurance market, the roles played by intermediaries
Types of insurance life insurance products, conditions, inclusions and exclusions, levels of coverage of risk transfer products, pricing, investment strategy for those products with an investment component
taxation: awareness of taxation issues in relation to the products
the relationship between ethics and regulatory requirements (e.g. good faith, utmost good faith)
full disclosure of remuneration/fees and any other conflicts of interest which may influence the adviser’s recommendation
Insurance Brokers Code of Practice and organisational codes of conduct
internal and external (FOS) complaints resolution procedures
ASIC guidelines on adviser conduct and training
specialist life insurance knowledge:
types of life insurance products/policies
standard cover (and deviations)
policy wordings
taxes and charges
insurance claims
premium rating/risk selection
reporting
product development
underwriting
specialist knowledge on insurance broking products and services used by the life broker
legislative and organisational compliance requirements in relation to advice:
relevant legislation and ASIC regulatory guides affecting the provision of general and personal advice the role of different advisers within the organisation
brokerage policy and guidelines related to the provision of personal advice
details of relevant marketing and disclosure documents, including product disclosure statements and marketing brochures on the relevant products.
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Level of insurance broking advice may include:
extent of the client’s enquiry, the complexity of the advice requested and the financial literacy of the client.
Disclosure documents and information may include:
financial services guide
product disclosure statement
statement of advice.
Short, medium and long term goals may include:
beliefs about performance and risk
business needs
expectations of access to the product
expectations of lifecycle and length of the product
expectations of product coverage
family income
insurer security.
Risk assessment processes may include:
amendments
broker slips
legal cases
pre-underwriting report
previous insurers
proposals
surveys.
Significant changes may involve:
complex technical determinations
high monetary impact
important client base.
Scaled and suitable:
advice has a specific definition in the ASIC guidelines on disclosure and conduct of advisers in its regulatory guides.
Restricted words may include:
impartial
independent
unbiased.
Terms of cover may include:
deductibles/excesses required
limit of liability/sub-limits
price
scope of cover
security of carrier.
Submission may include:
conceptual quotation
firm quotation
to prospective clients.
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
A range of communication and interpersonal skills are used to establish the knowledge level of client and clarify the level of insurance broking advice to be provided
Broker authorisation to deal with the client’s needs is established and referral to appropriate adviser for higher level/specialist advice made, if required
Enquiries are responded to by explaining the range of life insurance products and broking services available and their relevant fee and charging methodology
Role of the broker and the licensee/principal responsible for the adviser’s conduct is advised to the client
Regulations, codes and procedures set out in organisation compliance manuals for the personal advice process are complied with including delivery of appropriate disclosure documents and information about complaints handling processes
A range of communication and interpersonal skills are used to encourage the consumer to express their short-, medium- and long-term goals relevant to the product
Where relevant, a product risk profile of the client is identified, assessed and agreed
Nature of submission required by prospective client is determined
Skill requirements to prepare submission are identified
The need for specialist advice or client industry information is sought if required to address issues that professional judgement indicates may require further consideration
Consultants with required skills are identified and retained as required
Team is established with team leader identified as required
Appropriate risk assessment processes and tools are used to collect relevant personal, financial and business details
Risk assessment is completed in compliance with guidelines
Comprehensive records are maintained of risk assessment and actions taken
All information from the client risk assessment and profiling process is analysed
Comprehensive records of risks assessed and actions taken are checked to ensure information is current and comprehensive
Required insurance program and/or products are fully identified using an appropriate checklist
Clients are consulted throughout the analysis for further clarification where necessary
Follow-up questioning to ensure that the client understood earlier questions and that information received by them is relevant and complete is undertaken
Appropriate insurance/risk management program based on risk assessment and client profile and needs is determined
Proposed program is compared with appropriate checklist and other similar clients and significant changes identified
Available options are identified and assessed using information from risk analysis
Relevant product research is conducted
Advice for presentation to the client is prepared in accordance with organisational policy
Checks to ensure the advice has been scaled and suitable to the requirements of the advice situation are made
Checks that restricted words are used appropriately in the delivery of advice are made
Checks are made that the reasoning behind the advice and any conflicts of interest that affect the advice have been disclosed are made
Where applicable, availability of a market with suitable terms for the client requirements is identified
Where applicable, indicative terms of cover are sourced with insurers to provide the most beneficial outcome for the prospective client
Required written submission is provided to client in format required by the organisation
Options that specify benefits and advantages are identified for the prospective client
Features of the advice are explained to the client in a clear and unambiguous way
Relevant details, terms and conditions of the underlying products/services are explained to the client
Requirements to put the recommended program into effect are explained to the client
Client is provided with written supporting documentation and guided through the key aspects of the documentation
Distribution of relevant disclosure documents is established
Forms
Assessment Cover Sheet
FNSIBK504B - Provide personal advice in life insurance broking products and services
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
FNSIBK504B - Provide personal advice in life insurance broking products and services
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