Application
This unit describes the skills and knowledge required to analyse client financial needs and objectives and provide wholesale advice ethically and professionally in derivatives, in compliance with industry regulations, codes of practice and current Australian Securities and Investments Commission (ASIC) and Australian financial services (AFS) licensing.
The unit applies to those who apply specialist knowledge and well-developed interpersonal, communication and self-management skills to perform a wholesale advisory role in derivatives.
Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Users are advised to check with the relevant regulatory authorities to confirm those 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 needs and financial situation | 1.1 Establish knowledge level, objectives, risk profile and goals of client 1.2 Explain range of products and services available to client according to client objectives and goals and respond to enquiries where required 1.3 Inform client about role of adviser and licensee or principal responsible for adviser’s conduct 1.4 Analyse client’s financial and business details and assess client’s financial needs 1.5 Establish product risk profile of client |
2. Develop strategies and solutions according to clients objectives, needs, financial situation and risk profile | 2.1 Assess client needs using information gathered, taking into consideration client’s product expectations and specific needs 2.2 Consult and clarify with client throughout analysis where required 2.3 Analyse need for specialist advice and ensure client is referred to appropriate adviser for higher level or specialist advice where required 2.4 Assess and confirm product risk profile of client 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 strategies and solutions to client and determine financial plan, policy or transaction | 3.1 Explain proposed strategy and/or solution to client according to organisational policies and procedures, legislative and regulatory requirements 3.2 Reinforce all relevant details, terms and conditions of product and/or service 3.3 Disclose impacts and possible risks of product or service 3.4 Provide supporting written documentation according to legislative requirements and organisational policies and procedures 3.5 Discuss and clarify any concerns or issues client has regarding proposed plan, policy or transaction 3.6 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 Explain and confirm that client understands all associated fees, cost structures and timeframes for execution and processing 4.3 Confirm 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 required documentation |
5. Provide arrangements for ongoing service, where requested by client | 5.1 Confirm that type and form of ongoing service, including review of products or services, is agreed with client 5.2 Explain and confirm fees and costs for ongoing and specifically defined service, and confirm client understands all details 5.3 Implement procedures for agreed ongoing service according to organisational policies and procedures |
Evidence of Performance
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:
provide wholesale advice in derivatives for at least two different clients.
In the course of the above, the candidate must:
comply with organisational policies and procedures, industry regulations and legislative requirements for derivatives
implement the plan, policy or transaction once agreed by each client.
Evidence of Knowledge
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:
Generic knowledge
organisational policies and procedures relating to providing wholesale advice in derivatives
characteristics of the economic environment, including:
impact of economic and business cycles
interest rates and exchange rates
inflation
government monetary and fiscal policy
operation of financial markets, including:
roles played by intermediaries and issuers
structure and interrelationships within the financial markets
interrelationship between industry sectors
key aspects of financial products, including:
types of financial investment products
specific inclusions and exclusions
types of financial risk products
fee structures and charging methodologies
Specialist knowledge
key characteristics of derivatives markets, including:
market participants
roles played by intermediaries
structure and interrelationships between the securities and derivatives sectors
key characteristics of derivatives products, including:
fee structures and charging methodologies
associated risks
investment options using derivatives products
key theories of investment, portfolio management and management of investment and risk, including:
investment concepts
investment strategies
identification of types of risk
client risk profile
taxation issues in relation to derivatives, financial products and markets in which they operate
legal environment, including disclosure and compliance covering:
role of representative and adviser
legal principles relating to key Acts relevant to performance evidence
relationship between ethics and regulatory requirements, including good faith, utmost good faith, full disclosure of remuneration and fees, and any other conflicts of interest that may influence adviser’s recommendation
relevant industry standards and codes of conduct
regulators’ guidelines relevant to the provision of general or wholesale advice in derivatives
resolution procedures for internal and external complaints
Australian Securities and Investments Commission (ASIC) market integrity rules
Australian Securities Exchange (ASX) 24 Operating Rules
elements of the Registered Representative Course and Examination program.
Assessment Conditions
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:
office equipment, technology, software and consumables used to provide wholesale advice in derivatives
clients requiring wholesale advice in derivatives
derivatives product information.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.
Foundation Skills
This section describes those language, literacy, numeracy and employment skills that are essential to performance but not explicit in the performance criteria.
SKILL | DESCRIPTION |
Numeracy | Interprets financial product information and completes calculations where required |
Reading | Identifies and interprets textual information from relevant sources |
Writing | Records and consolidates workplace documentation using clear, specific and industry-related terminology documentation |
Oral communication | Articulates requirements using industry-specific language appropriate to audience and environment Selects and uses appropriate conventions and protocols when communicating with clients to build rapport, seek and share information, establish clear agreement and maintain an ethical service relationship |
Initiative and enterprise | Uses research and analysis to extend knowledge of derivatives product features and applications relevant to current role |
Technology | Completes work tasks and provides information using the main features and functions of organisation-supported digital tools |
Sectors
ASIC