This unit may be applied within a financial counselling role or within lending roles within various financial institutions. It is particularly aimed at addressing the need for financial literacy among those with a limited understanding of the financial system who are possibly at a disadvantage when making decisions about the use and management of money.

ELEMENT

PERFORMANCE CRITERIA

1. Identify extent of customer's financial awareness

1.1. Customer's understanding of the financial system, the role of financial institutions in the modern economy and awareness of what money is and how it is exchanged is identified and clarified with the customer where necessary

1.2. Relevant aspects of the customer's own financial situation are clarified and areas of concern are discussed

2. Discuss methods available for spending and saving money

2.1. Options available for the purchase of goods and services are identified and discussed with the customer to determine advantages and disadvantages

2.2. The necessity and means of opening and operating a bank account and the range of accounts available for holding and saving money are identified and advantages and disadvantages of each are discussed with the customer

2.3. Range of methods to access funds is discussed and queries addressed with the customer

2.4. The importance of record keeping for tax purposes and individual money management is discussed with the customer

3. Discuss basic money management principles

3.1. The benefits and means of developing a savings plan and strategy and the role of budgeting is explained and the customer is shown how to compile and implement a budget

3.2. Relationship between risk and return is explained to the customer in a plain language

3.3. Techniques for evaluating alternative financial products and the risks associated with some forms of financial products are discussed with the customer in relation to their situation

4. Discuss the role of other forms of savings and investment options

4.1. The role and benefits of insurance as a means of protecting against events of risk are discussed with the customer

4.2. The role of superannuation and retirement planning including superannuation contributions covering life and permanent disability insurance are explained to the customer

4.3. Ways in which the customer can provide for own future requirements are discussed with the customer

Required skills

communication skills to:

clearly explain financial literacy needs and skills tocustomers and customers, using questioning and active listening as required and respondingwith empathy in sensitive cases

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

IT skills to use internet information

literacy skills for:

analysing information to ensure appropriateness to customer or customer needs, currency and accuracy

drafting documents for customers and customers

problem solving skills to identify any issues that have the potential to impact on the customer's understanding and develop options

organisational skills, including the ability to plan and sequence work

Required knowledge

relevant industry codes of practice including:

Consumer Credit Code

Privacy Act

Credit Act

relevant State and Territory legislation regarding consumer credit issues

roles and relationships between participants within the Australian financial services industry, including banks and other financial intermediaries

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:

empathise and build rapport with customers

assess customer's existing level of financial literacy

impart basic financial literacy principles to customers in meaningful ways using plain language.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services 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 financial services product information.

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 or role plays

verbal or written questioning on underpinning knowledge and skills

setting and reviewing workplace projects and business simulations or scenarios.

Guidance information for assessment

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.

Financial institutions include:

banks:

domestic

foreign

building societies

credit unions

Relevant aspects of the customer's own financial situation may include:

age and number of years until retirement

assets and liquidity of assets

earnings per annum

employment status

financial dependence or independence

liabilities

sources of income.

Options to purchase goods and services include:

lay-by

mortgages for housing purchase

paying part cash, part credit

paying total amount in cash

purchasing total amount on credit.

Accounts available for holding and saving money may include:

cash management accounts

cheque accounts

First Home Saver accounts

fixed term deposits

online savings accounts

statement savings accounts.

Advantages and disadvantages of different types of accounts may refer to:

account keeping fees

penalties and other non-government fees and charges

ease of access to funds

minimum opening balance required

rate of interest earned.

Methods to access funds may include:

Internet or online banking

withdrawal at branch

withdrawal via Automatic Teller Machine (ATM).

Techniques may include

asking the financial institution for a detailed list of all establishment, legal, valuation and ongoing fees charged

using the comparison rate to evaluate home loan products.

Insurance may include:

health

home and contents

income protection

motor vehicle

travel.

Unit sector

Financial literacy

This unit contains employability skills.