Application
This unit describes the skills and knowledge required to identify the capacity of a client to meet the terms and conditions of suitable loan products and services available.
It applies to individuals who work with clients with special financial needs and consider complicated issues such as client financial structures and legislative requirements. Individuals apply research and analytical skills to complex and multifaceted scenarios to develop customised solutions for clients.
Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Refer to the relevant regulator for specific guidance on requirements.
Elements and Performance Criteria
1. Identify client borrowing needs | 1.1 Identify client needs and any special or complex features 1.2 Evaluate special or complex features of a client’s situation against organisational guidelines and procedures 1.3 Assess ability to successfully meet client needs according to applicable legislation, regulation and organisational guidelines and procedures |
2. Collate financial documents required to assess client’s borrowing needs | 2.1 Identify the financial documents required by the credit provider to progress the loan application progress 2.2 Review documents to ensure compliance with organisational guidelines and procedures, and legislative and regulatory requirements 2.3 Engage in further consultation with the client as required |
3. Analyse financial documents and assess risks of the borrowing needs | 3.1 Analyse credit information to establish that sufficient evidence of accurate information has been provided 3.2 Identify and evaluate possible risks to determine overall level of risk associated with application 3.3 Identify issues that may require further consideration or consultation with other financial services professionals 3.4 Document risk assessment in accordance with organisational procedures |
4. Finalise loan | 4.1 Evaluate borrowing request based on assessed information in accordance with organisational risk management policy 4.2 Determine credit terms and limits within organisational credit policy guidelines and advise customers of credit decisions 4.3 Complete credit account administration according to organisational credit policy and timelines, and legislative requirements |
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:
assess complex loans for at least three clients.
In the course of the above, the candidate must:
assess the impact of each option on the client’s financial circumstances
comply with relevant legislative, regulatory and organisational requirements pertaining to dealing with clients in difficult circumstances.
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:
features and benefits of credit products and their application requirements
complex features of a client’s financial situation including:
high assets
income
expenditure requirements
complex taxation
nature and forms of securities to be taken
legal issues
organisational risk management policy
different structures available to clients to meet their financial goals including:
sole trader
partnership
company
trust – family, unit and hybrid
partnership, company and trust in relation to:
financial statements and tax returns
income, expenditure and accounting treatments
communication methods between clients, accountants and real estate agents in relation to financial statements and business structure
financial data including add backs to calculate loan serviceability
sources of income where multiple entities or structures are included in the client relationship
financial information needed for data entry into loan calculators to confirm loan serviceability
risk issues relating to:
borrowing risk and gearing
specific product risk
institutional risk
risk factors and return expectations of the client
volatility of income and capital
types of security to be taken for complex loan structures:
joint and several personal or related company guarantees
multiple mortgages
registered company charges
second mortgages
the involvement of unit or family trusts as either borrowers or guarantors
relevant legislation including state and territory legislation, charges and taxes.
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:
legislation, regulation, and organisational policy and procedures relevant to credit risk
common office equipment, technology and consumables
client financial profiles
credit product information
software systems and data.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.
Foundation Skills
Reading | Analyses and interprets textual information from internal and external sources to determine content relevant to individual client needs and to inform compliant actions |
Writing | Processes records and documents strategies using clear, concise and industry specific language for others to interpret and follow |
Numeracy | Uses mathematical skills to perform calculations and interpret a range of statistical information and financial data related to credit management activity |
Self-management | Takes full responsibility for following policies, procedures and legislative requirements and identifies organisational implications of new legislation or regulation Works independently or with others in making decisions to achieve organisational outcomes and strategies |
Planning and organising | Applies systematic and analytical decision-making processes for complex and non-routine situations Accepts responsibility for planning and sequencing complex tasks and workload, negotiating key aspects with others and taking into account capabilities, efficiencies and effectiveness |
Problem solving | Applies judgement skills for making credit risk determinations |
Technology | Uses the main features and functions of digital tools to complete work tasks |
Sectors
Credit management