This unit applies to a range of job roles in the financial markets sector.

ELEMENT

PERFORMANCE CRITERIA

1. Determine risk profile

1.1. Interpersonal skills are applied to confirm client's financial needs, expectations and objectives in accordance with organisational requirements

1.2. Valid and relevant information is obtained to determine the complexity of client's needs and their asset and liability management framework is analysed to ensure it matches their broader strategic direction and risk profile

1.3. The context for assessing risk is based on an understanding of the client's personal situation, operating environment or core business

2. Assess financial risk

2.1. Assessment criteria for measuring the level of potential or existing risk, together with an assessment of consequences are developed in accordance with organisational requirements

2.2. Information collected is assessed using the assessment criteria and appropriate analytical techniques

2.3. Threat, consequences and vulnerability for a range of financial products is compared, in accordance with client and organisational requirements

2.4. Risk management alternatives are developed to include assessment of alternatives and estimation of long and short term effects

2.5. Incidents and factors increasing or diminishing financial performance are identified, analysed and discussed with the client

3. Report findings

3.1. Risk management alternatives are documented in accordance with organisational requirements and relevant legislation

3.2. Retail client disclosure documents outlining client responsibilities are prepared and explained to the client

3.3. Client information is updated, modified and accurately maintained in accordance with organisational requirements

3.4. Risk analysis documentation is prepared and filed in accordance with organisational and legislative requirements

3.5. All information is handed safely and securely with due regard to client confidentiality and legislative and organisational requirements

Required skills

well-developed communication skills to:

determine and confirm client risk profile, using questioning and active listening as required

liaise with team members and peers, share information, listen and understand

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

use comparative analysis techniques

use spreadsheets and databases

access internet information

highly developed research and analysis skills for:

accessing, interpreting and managing complex information and evaluating and disseminating information to clients

accurately identify existing or potential risks

evaluating client information against risk assessment strategies

identifying gaps in information and gathering necessary information from alternative sources

well-developed literacy skills to:

read and interpret marketand product information

identify economic environmental factors which affect financial services and markets

produce reports

judgement skills for forming recommendations in complex situations

organisational skills, including the ability to:

estimate, plan and prioritise client requirements

plan and sequence own work

work effectively in a constantly changing environment

self-management skills for complying with ethical, legal and procedural requirements and model a professional and ethical approach to clients

Required knowledge

client and organisational confidentiality requirements

financial information sources and products

financial markets risk characteristics

organisational policies and procedures

relationship between ethics and regulatory requirements

relevant legal principles and disclosure and compliance requirements

risk standards, assessment techniques and processes

roles and operations of financial markets

taxation issues in relation to the products and markets in which they operate

the economic environment, including:

characteristics and impacts of economic and business cycles

government monetary and fiscal policies

interest rates, exchange rates and inflation

theories of management of investment and risk

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:

determine the risk profile of client

interpret and comply with relevant legislation

assess the impact of financial risks to the client and the organisation and recommend strategies to control risk

accurately review and prepare risk assessment findings in a format suitable for presentation including client disclosure documents

provide up to date advice on the risks and benefits of financial products and services.

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

verbal or written questioning on underpinning knowledge and skills

setting and reviewing workplace projects and business simulations or scenarios

evaluating samples of work

accessing and validating third party reports.

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.

Interpersonal skills may include:

establishing knowledge level of the client

explaining the adviser's role

explaining the services offered

listening actively to what the client is saying and requesting

questioning to clarify and confirm the client's needs

seeking feedback from the client to confirm understanding of needs.

Clients may include:

borrowers

exporters

importers

investors

traders.

Financial needs may include:

acquisition and disposal of financial assets

cash flow management

foreign currency receipts and payments

foreign currency risk management

funding

interest rate risk management

trading profits.

Organisational requirements may be outlined and reflected in:

assessment and equity principles and practice guidelines

business and performance plans

complaints and dispute resolution procedures

ethical standards, codes of practice

goals, objectives, plans, systems and processes

legal and organisational policies and guidelines

mission statements, strategic plans

policies and procedures in relation to client services

product or service development

quality and continuous improvement processes and standards

quality assurance and procedure manuals.

Valid and relevant information may include:

cash flows:

required

projected

client activities and functions

client current and proposed operating environment, assets and systems

details of clients needs and objectives for:

income

security

liquidity

time period

existing client risk management strategies

individual investment preferences and a version or tolerance to risk

other client details such as:

employment security

likely events and their impact on the client

age

other products they have

relevant personal, financial and business details

taxation obligations.

Risk to be identified may include:

credit risk

funding risk

legal risk

market risk

operational risk

reputation risk

settlement risk

delivery risk.

Assessment criteria may be based on:

prioritised G30 recommendations for managing derivatives risk

AS/NZS 4360: Risk Management

qualitative factors

quantitative factors

semi-quantitative factors

Supply Chain Operations Reference (SCOR).

Vulnerability for a range of financial products may relate to:

access restrictions on product

borrowing risk or gearing

economic impact

liquidity risk

market and sector risks:

economic cycle

fixed interest

risk factors and return expectations

specific product risk

volatility of income and capital.

Risk management alternatives may include:

comparative analysis

forecasting

periodic reporting

quantification of risks

referral to decision making authorities.

Relevant legislation may include:

applicable State and Territory legislation and regulations

Australian Securities and Investments Commission (ASIC) Act, policy guidelines

Banking Act

Commonwealth Criminal Code

contract law

Corporations Act

Financial Corporations Act

Financial Services Reform Act (FSRA)

Financial Transaction Reports Act

industry codes of practice

legislation and regulations administered by Australian Prudential Regulation Authority (APRA)

Privacy Amendment Act (Private Sector)

Reserve Bank Act

Superannuation Acts and regulations

Taxation Acts and regulations

Trade Practices Act.

Retail client disclosure documents may include:

financial services guide

product disclosure statement

statement of advice.

Documentation may include:

advice

general correspondence

legal, government and professional documents

meeting notes

recommendations

records of telephone conversations

references to all evidence/information considered

reports.

Filing of information may include:

electronic

manual.

Unit sector

Financial markets

This unit contains employability skills.