The unit has application to job functions such as para-planners, trainee financial planners, financial planners and technical staff.

ELEMENT

PERFORMANCE CRITERIA

1. Confirm plan objectives and scope

1.1. Plan strategy and key parameters are checked with a qualified financial planner and the client

1.2. Research topics are established and research results reviewed and compared to client requirements and expectations as set out in strategy and key parameters

1.3. Current client situation is analysed to determine opportunities and constraints within strategy boundaries

1.4. Plan objectives are developed for asset growth, income, risk, taxation and any other objectives set out in plan strategy

2. Test strategic assumptions

2.1. Client related key assumptions are tested against the draft strategy

2.2. Economic key assumptions in the strategy are tested and reviewed as required

2.3. Legislative and regulatory assumptions, including taxation assumptions are tested against the strategy

2.4. Clarifications are sought from the strategy author on any identified discrepancies

3. Develop financial plan to set strategy

3.1. Strategic options set by financial planner are analysed or modelled

3.2. Inconsistencies in strategic options are identified and discussed with the strategy author

3.3. Financial plan is developed according to established organisational guidelines

4. Review and settle draft strategy and options

4.1. Strategic options for review and a mode of presentation are selected according to organisational guidelines

4.2. Each strategic option is reviewed with the strategy author including positives, negatives and risks for each option

4.3. Broad agreement on strategies is established with the strategy author

5. Develop preliminary financial plan

5.1. Specific products and options are selected that meet given strategy and key parameters

5.2. Cash flow/liquidity, set capital preservation and/or estate planning requirements are incorporated consistent with given strategy and key parameters

5.3. Recommendations for financial asset allocation structure are developed according to organisational guidelines

5.4. Recommendations for changes to income and taxation arrangements are developed including referral advice to accountants/lawyers as appropriate

5.5. Recommendations on risk management strategies and products are developed and incorporated according to organisational guidelines

5.6. All recommendations are checked to ensure consistency with given strategy and key parameters, and meet specific objectives with a high dependability of outcome

5.7. Description of anticipated fees and charges and information on internal and external complaints resolution procedures is incorporated into the plan where appropriate

5.8. Preliminary financial plan is documented according to organisational guidelines and procedures

Required skills

communication skills to:

determine and confirm work requirements, using questioning and active listening as required

liaise with others, share information, listen and understand

negotiate requirements with clients

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

use comparative analysis techniques and make financial calculations

use dealing system systems, spreadsheets and databases

use internet information

learning skills to maintain and apply knowledge of ethical principles and compliance legislation and requirements

literacy skills to:

read, write, edit and proofread documents to ensure clarity of meaning, accuracy and consistency of information

record, gather and consolidate information

organisational and time management skills to sequence tasks, meet timelines and arrange meetings

analytical skills to perform a needs analysis

Required knowledge

generic products available in the financial services industry

investment and savings vehicles, financial markets, asset classes and investment characteristics

investment risk factors and relationship to return expectations

relevant industry codes of practice

requirements related to the disclosure of capacity

the general impact of relevant economic, taxation and social security policy on a client's financial planning needs

the general impact of relevant estate planning considerations on a client's financial planning needs

the role of the financial planning adviser and the financial planning practice

the terms of the Acts and regulations affecting the industry

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:

comply with relevant legislative requirements and industry codes of practice

confirm plan objectives and scope and test strategic assumptions and make appropriate checks on the proposed plan for its integrity and compliance

review and settle a draft strategy and options according to organisational guidelines and develop a preliminary financial plan

apply knowledge of financial products, financial markets and investment characteristics

work with other associated financial advisers

assess the impact of taxation, social security, economic and other government policies on client investment and financial requirements.

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.

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 which may include formal examinations

setting and reviewing workplace projects and business simulations/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.

Legislative requirements may include:

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

Australian Taxation Acts

Consumer Affairs Act

Consumer Credit Code

contract law

Corporations Act

industry codes of practice

Insurance Act

Life Act

Privacy Act

social security regulations

State and Territory legislation relevant to the financial services industry

Trade Practices Act

trust law.

Appropriate strategic options may include:

flexibility

integration of strategies and solutions

investigation and assessment of costs

liquidity

return on investment

safety

tax effectiveness and investment spread of relevant products available to the adviser

volatility of expected income and/or capital growth.

Products include but are not limited to:

cash deposits

derivatives

direct investments

equities

futures

insurance products

managed investments

superannuation.

Risk assessment can include:

asset allocation and investment spread

borrowing risk and gearing

economic situation

institutional risk

lifestyle choices

market and sector risks considering:

the economic cycle

fixed interest

property value

stock market value

risk and return expectations of the client

specific product risk

volatility of client income and capital.

Unit sector

Financial planning

This unit contains employability skills.