Google Links

Follow the links below to find material targeted to the unit's elements, performance criteria, required skills and knowledge

Elements and Performance Criteria

1. Establish plan objectives and scope
   • Review and compare research results with client requirements and expectations, and analyse current client situation to determine opportunities and constraints
   • Review special features of client situation such as high asset, income or expenditure requirements, complex taxation and/or legal issues, or complex estate planning issues
   • Identify desired financial resource and market parameters and develop plan objectives for asset growth, income, risk, estate planning and any other objectives developed in consultation with client
   • Identify taxation or estate objectives and discuss with client
2. Develop strategic assumptions
   • Develop and test client related and economic key assumptions
   • Develop and test legislative, regulatory and taxation assumptions
   • Seek clarification from client or other financial services professionals as required and document strategic assumptions for client review
3. Develop innovative or complex financial strategy
   • Develop initial options based on strategic assumptions and client specifications
   • Analyse, model and prioritise strategic options and reject inappropriate strategic options
   • Develop supporting arguments for each strategic option and include in draft overall strategy
   • Integrate strategy, where required, into taxation, legal, estate or insurance and asset strategies being developed for client by other professional advisers for financial plan to achieve maximum synergy and benefit for client
   • Review strategy for best practice compliance and risk management
   • Include fee and charge analysis for strategy options
   • Maintain best practice ethical behaviour, including full disclosure of any potential conflicts of interest and areas where advice should be sought from other professionals
4. Review and settle draft strategy and options with client
   • Select strategic options for review with client and suitable mode of presentation
   • Fully review each strategic option with client, including positives, negatives and risks for each option
   • Ensure that implication of each option, including regulatory and legal implications for client’s situation, needs and goals, is explained to client and understood
   • Ensure that client understands where additional professional advice is needed
   • Establish broad agreement on strategies with client and resolve any concerns and issues raised by client
5. Develop preliminary financial plan for client
   • Conduct full investigation of products and options, including non-standard and/or innovative products, and select products and options to meet agreed strategy
   • Identify complex or innovative products and develop or obtain explanatory material
   • Incorporate requirements for cash flow, liquidity, capital preservation or estate planning
   • Develop recommendations for financial asset allocation structure including, where required, provision for equities, trusts, partnerships, allocated pensions and superannuation
   • Develop recommendations for changes to income and taxation arrangements, taxation consequences and estate planning issues relating to client strategy, and provide referral advice to accountants or lawyers as appropriate
   • Develop recommendations on risk management strategies and products, and incorporate into plan
   • Incorporate description of anticipated fees and charges into plan
   • Incorporate information on internal and external complaints resolution procedures into preliminary plan
   • Document preliminary financial plan according to organisational guidelines and procedures
6. Ensure compliance of financial plan with regulatory and organisational requirements
   • Check preliminary financial plan to ensure that role of representative or adviser is properly documented
   • Check preliminary financial plan to ensure compliance with relevant Acts, legislation and regulatory guidelines
   • Assess preliminary financial plan for its ability to successfully achieve stated objectives
   • Check preliminary financial plan to ensure that it complies with ethical and regulatory requirements
7. Produce client financial plan
   • Produce financial plan in accordance with organisational presentation requirements
   • Attach supporting organisation and product explanatory documentation, and regulatory and complaints information where required

Performance Evidence

Evidence of the ability to:

develop detailed financial plans that:

maximise the client’s outcomes and reach client objectives

incorporate elements that have arisen from research

address complex needs and issues

describe the key assumptions on which the plan is based

assess the impacts of taxation, social security, economic and other government policy on client investment and financial requirements

analyse strategic options and make justified recommendations.

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

---

Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

describe the key features and characteristics of:

the financial planning industry, investment and savings vehicles, financial markets, asset classes and investment characteristics

legislation, regulations and codes of practice affecting the industry

products available in the financial services industry

relevant industry codes of practice

analyse the role of the financial planning adviser and the financial planning practice

explain investment risk factors and relationship to return expectations

describe requirements related to the disclosure of capacity

outline the impact of the following on the client's financial planning needs:

relevant economic, taxation and social security policy

relevant estate planning considerations

describe the key features of effective communication processes, including principles of effective negotiation.

---