This unit has application to job roles such as para-planners, financial planners and support staff.

ELEMENT

PERFORMANCE CRITERIA

1. Establish plan objectives and scope

1.1. Research results are reviewed and compared to client requirements and expectations

1.2. Current client situation is analysed to determine opportunities and constraints

1.3. Desired financial resource and market parameters are identified and assessed

1.4. Plan objectives are developed for asset growth, income, risk, taxation and any other objectives developed in consultation with the client

2. Develop strategic assumptions

2.1. Client related and economic key assumptions are developed and tested

2.2. Legislative and regulatory requirements, including taxation assumptions, are identified and tested

2.3. Clarifications are sought from client or other professionals as required and strategic assumptions documented for client review

3. Develop financial plan strategy

3.1. Initial strategic options are developed based on strategic assumptions and client specifications

3.2. Strategic options are analysed and modelled with any inappropriate options rejected

3.3. Supporting arguments for each final strategic option are developed and included in a draft overall strategy

3.4. Any necessary client checks or consultations are made to verify the plan strategy

4. Develop preliminary financial plan

4.1. Specific products and options are selected to meet agreed strategy with cash flow, liquidity and capital preservation or estate planning requirements incorporated as required

4.2. Recommendations for financial asset allocation structure are developed including where provision is required for equities, trusts, partnerships, allocated pensions, and superannuation and planned capital expenditure

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

4.4. Recommendations on risk management strategies and products are developed and incorporated in the plan

4.5. Anticipated fees and charges are incorporated into the preliminary plan with information on internal and external complaint resolution procedures available to the client

4.6. Preliminary financial plan is documented according to organisation guidelines and procedures

5. Ensure compliance of financial plan with regulatory and organisational requirements

5.1. Preliminary financial plan is checked to ensure that the role of the representative/adviser is properly documented and complies with relevant acts, regulations and regulatory guidelines

5.2. Preliminary financial plan is assessed for its ability to successfully achieve objectives

5.3. Preliminary financial plan is checked to ensure that it complies with ethical and regulatory requirements

6. Produce completed plan

6.1. Financial plan is produced in accordance with organisational quality control requirements

6.2. Supporting organisation and product explanatory information is attached

6.3. Regulatory and complaints information where required is attached

Required skills

well-developed communication skills to:

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

provide appropriate and readily understood information to clients

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

research skills such as:

accessing and managing information

interpreting complex documentation

coordinating tasks

numeracy skills to accurately analyse, record and store data in accordance with organisational requirements

literacy skills to:

analyse information to ensure appropriateness to client needs, currency and accuracy

read and interpret complex documentation from a variety of sources

IT skills for accessing and using appropriate software such as spreadsheets and databases and using internet information

self-management skills for complying with ethical, legal and procedural requirements

learning skills to maintain knowledge of changes to compliance legislation and requirements

problem solving skills to identify any issues that have the potential to impact on the financial planning process or outcome and to develop options to resolve these issues if they arise

Required knowledge

generic products available in the financial services industry

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

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

investment risk factors and relationship to return expectations

principles of effective negotiation

relevant codes of practice

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

the general impact of relevant State and Territory planning considerations on the client's financial planning needs

the role of the financial planning adviser and financial planning practice including compliance requirements and the disclosure of capacity

the terms of the Acts and regulations affecting the financial services 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 legislation and industry codes of practice and interpret and apply organisational operational requirements policies and procedures

establish plan objectives and scope, and develop strategic assumptions and a financial plan strategy ensuring compliance of the plan with regulatory and organisational requirements

develop a detailed financial plan that maximises the client's outcomes and reach client objectives and identify key assumptions on which the plan is based

analyse strategic options and make justified recommendations using use in-depth knowledge of the financial planning industry, industry regulations, codes of practice and financial products, financial markets and investment characteristics

assess impacts 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

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 and regulatory requirements may include:

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

Consumer Affairs Act

Consumer Credit Code

contract law

Corporations Act

industry codes of practice

Insurance Act

Life Insurance Act

Privacy Act

social security regulations

State and Territory legislation

Taxation Acts

Trade Practices Act

trust law.

Relevant ethical and regulatory requirements may include:

checking integrity for completeness

disclosure of any conflicts of interest

full disclosure of remuneration/fees and any other matter that may influence the representative's recommendations

guarantees of confidentiality

meeting relevant industry codes of conduct and practice

preparation in utmost good faith.

Unit sector

Financial planning

This unit contains employability skills.