Application
This unit describes the skills and knowledge required to analyse client needs and provide advice ethically and professionally on managed investments in compliance with industry regulations and codes of practice. It addresses the training requirements of current Australian Securities and Investments Commission (ASIC) and Australian financial services (AFS) licensing at Tier 1 level.
It applies to individuals who use well-developed interpersonal skills and excellent communication and self-management skills to perform an advisory role in managed investments.
Refer to the FNS Implementation Guide Companion Volume or ASIC for specific guidance on requirements.
Elements and Performance Criteria
ELEMENT | PERFORMANCE CRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Establish relationship with client and identify client’s objectives, needs and financial situation | 1.1 Establish client’s knowledge about financial products and services 1.2 Respond to enquiries about managed investment products and services by explaining range of products and services available and their relevant fee and charging methodology 1.3 Inform client about role of adviser and licensee or principal responsible for adviser's conduct, including procedures for complaints handling and circumstances in which they should be engaged 1.4 Ask about client’s objectives and goals, and obtain personal, financial and business details to identify client needs 1.5 Establish product risk profile of client, including their expectations of cash flow and relevant taxation obligations |
2. Analyse client’s objectives, needs, financial situation and risk profile to develop appropriate strategies and solutions | 2.1 Undertake assessment of client needs using all information gathered, taking into account client’s product expectations and specific needs 2.2 Consult client throughout analysis for further clarification where necessary 2.3 Analyse need for specialist advice and ensure client is referred to appropriate adviser for higher level or specialist advice if required 2.4 Assess and confirm product risk profile of client demonstrating ASIC identified generic and specialist knowledge relevant to products being offered 2.5 Determine appropriate strategy to provide for identified needs and outcomes based on analysis of products, client risk profile and assessment of client needs 2.6 Conduct relevant research, analysis and product modelling and draft appropriate solution, plan, policy or transaction for presentation to client |
3. Present appropriate strategies and solutions to client and negotiate financial plan, policy or transaction | 3.1 Apply appropriate knowledge for service or product offered when presenting product 3.2 Clearly and unambiguously explain proposed transaction to client 3.3 Reinforce all relevant details, terms and conditions of product and service 3.4 Disclose impacts and possible risks of solution in clear and concise manner 3.5 Provide supporting written documentation and guide client through key aspects of documentation 3.6 Discuss and clarify any concerns or issues client has regarding proposed plan, policy or transaction 3.7 Confirm that client understands proposed plan, policy or transaction |
4. Agree to plan, policy or transaction and complete documentation | 4.1 Obtain client’s formal agreement to proposed plan, policy or transaction 4.2 Clearly explain and confirm that client understands all associated fees, cost structures and timeframes for execution and processing 4.3 Ensure that proposal and all other statutory and transactional documents are completed and signed off by client 4.4 Exchange copies of signed agreement and other appropriate documentation |
5. Provide ongoing service where requested by client | 5.1 Ensure that type and form of ongoing service, including reporting on performance and review of plan, policy or transaction, is agreed with client 5.2 Clearly explain all fees and costs for ongoing and specifically defined services and check that client understands these details 5.3 Provide ongoing service as required |
Evidence of Performance
Evidence of the ability to:
interpret and comply with industry regulations and codes of practice
analyse client’s needs, financial situation and risk profile, and prepare appropriate strategies or solutions relating to managed investments
provide accurate and ethical advice on managed investment products and services
implement the plan, policy or transaction once agreed by the client and complete documentation accurately.
Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.
Evidence of Knowledge
To complete the unit requirements safely and effectively, the individual must satisfy generic and specialist knowledge requirements relevant to the products and activities in which advice is given.
Generic knowledge
analyse and provide an overview of the economic environment including:
characteristics and impact of economic and business cycles
interest rates and exchange rates
inflation
government monetary and fiscal policy
analyse and provide a detailed explanation of the operation of financial markets including:
roles played by intermediaries and issuers
structure and interrelationships within the financial markets
interrelationship between industry sectors
outline financial products, including:
concept of a financial product – general definition, and specific inclusions and exclusions
types of financial investment products
types of financial risk products.
Specialist advice
provide a detailed explanation of managed investment products including:
concept of managed investments
range of products offered under managed investments schemes, or a specific product offered under a scheme:
property trusts, real estate investment strategies, valuation techniques, property management
equity trusts, fixed interest trusts
serviced strata schemes
primary production schemes
film schemes
time-sharing schemes
types of risks associated with managed investment products
outline taxation issues in relation to managed investment products and markets in which they operate
discuss the legal environment including disclosure and compliance covering:
role of the representative or adviser
relevant legal principles relating to the Corporations Act, Australian Securities and Investments Commission (ASIC) Act, Privacy Amendment (Private Sector) Act, Financial Services Reform Act (FSRA) and Competition and Consumer Act
relationship between ethics and regulatory requirements including good faith, utmost good faith, full disclosure of remuneration and fees, and any other conflicts of interest which may influence the adviser's recommendation
relevant industry standards and codes of conduct
regulators’ guidelines including ASIC Regulatory Guide (RG)146 requirements
complaints resolution procedures (external and internal)
explain theories of investment, portfolio management and management of investment and risk:
investment concepts
investment strategies
identification of types of risk
client risk profile.
Assessment Conditions
Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial services and products advice field of work and include access to:
office equipment, technology, software and consumables
managed investment product information.
Assessors must satisfy NVR/AQTF assessor requirements.
Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the performance criteria that are required for competent performance.
Skill | Performance Criteria | Description |
Reading | 2.1, 2.5, 2.6 | Recognises and interprets textual information from a variety of sources |
Writing | 1.1-1.3, 1.5, 2.1, 2.2-2.6, 3.2, 3.3, 3.5, 3.7, 4.1, 5.1 | Uses clear, specific and industry related terminology to complete and consolidate workplace documentation |
Oral Communication | 1.1-1.5, 2.2, 2.4, 3.2, 3.3-3.7, 4.2, 5.1, 5.2 | Clearly articulates requirements using industry specific language appropriate to the audience and environment Uses active listening and questioning to confirm understanding and elicit information |
Numeracy | 1.5, 5.2 | Interprets financial product information and calculates client costs, risks and returns |
Navigate the world of work | 1.3, 2.4, 2.6, 3.3, 3.4, 5.1 | Takes personal responsibility for following explicit and implicit policies, procedures and protocols to provide advisory services and documentation that comply with legal and organisational requirements Extends knowledge of product features and applications of managed investment schemes relevant to current role using research and investigative analysis |
Interact with others | 1.5, 2.4, 3.5, 3.6, 4.2, 5.2 | Selects and uses the appropriate conventions and protocols when communicating with clients to build rapport, seek and share information, establish clear agreement and maintain an ethical service relationship Adapts personal communication style to show respect for the values, beliefs and cultural expectations of others |
Get the work done | 1.5, 2.1, 2.3, 2.4, 2.5, 2.6, 3.1, 4.1, 4.3, 4.4, 5.3 | Takes full responsibility for the planning, sequence and priority of tasks within own workload to achieve effective and compliant outcomes Applies systematic and analytical decision-making processes to determine and implement investment solutions that meet client needs and financial requirements Uses the main features and functions of digital tools to complete work tasks |
Sectors
ASIC units