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Evidence Guide: FNSFMK503 - Advise clients on financial risk

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

FNSFMK503 - Advise clients on financial risk

What evidence can you provide to prove your understanding of each of the following citeria?

Determine client risk profile

  1. Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements
  2. Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework
  3. Assess risk based on understanding of client’s personal situation, operating environment or core business
  4. Establish client’s risk tolerance level and discuss with client to confirm risk profile
Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assess risk based on understanding of client’s personal situation, operating environment or core business

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Establish client’s risk tolerance level and discuss with client to confirm risk profile

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assess product risk relative to client risk profile

  1. Identify a range of products that meet client objectives
  2. Access information on risk associated with these products using appropriate analytical techniques
  3. Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures
  4. Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements
  5. Assess alternative products and estimate long-term and short-term effects
  6. Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client
  7. Confirm that client understands the risk in any potential strategy recommendation
Identify a range of products that meet client objectives

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Access information on risk associated with these products using appropriate analytical techniques

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assess alternative products and estimate long-term and short-term effects

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Confirm that client understands the risk in any potential strategy recommendation

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Report findings

  1. Document risk management alternatives in accordance with organisational requirements and relevant legislation
  2. Prepare and explain retail client disclosure documents, outlining client responsibilities to client
  3. Update, modify and accurately maintain client information in accordance with organisational and legislative requirements
  4. Prepare and file risk analysis documentation in accordance with organisational and legislative requirements
Document risk management alternatives in accordance with organisational requirements and relevant legislation

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Prepare and explain retail client disclosure documents, outlining client responsibilities to client

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Update, modify and accurately maintain client information in accordance with organisational and legislative requirements

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Prepare and file risk analysis documentation in accordance with organisational and legislative requirements

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Determine client risk profile

1.1 Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements

1.2 Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework

1.3 Assess risk based on understanding of client’s personal situation, operating environment or core business

1.4 Establish client’s risk tolerance level and discuss with client to confirm risk profile

2. Assess product risk relative to client risk profile

2.1 Identify a range of products that meet client objectives

2.2 Access information on risk associated with these products using appropriate analytical techniques

2.3 Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures

2.4 Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements

2.5 Assess alternative products and estimate long-term and short-term effects

2.6 Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client

2.7 Confirm that client understands the risk in any potential strategy recommendation

3. Report findings

3.1 Document risk management alternatives in accordance with organisational requirements and relevant legislation

3.2 Prepare and explain retail client disclosure documents, outlining client responsibilities to client

3.3 Update, modify and accurately maintain client information in accordance with organisational and legislative requirements

3.4 Prepare and file risk analysis documentation in accordance with organisational and legislative requirements

Required Skills and Knowledge

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Determine client risk profile

1.1 Use effective communication skills to confirm client’s financial needs, expectations and objectives in accordance with organisational requirements

1.2 Obtain valid and relevant information to determine complexity of client needs and analyse their asset and liability management framework

1.3 Assess risk based on understanding of client’s personal situation, operating environment or core business

1.4 Establish client’s risk tolerance level and discuss with client to confirm risk profile

2. Assess product risk relative to client risk profile

2.1 Identify a range of products that meet client objectives

2.2 Access information on risk associated with these products using appropriate analytical techniques

2.3 Develop assessment criteria for measuring level of potential or existing risk, together with assessment of consequences in accordance with organisational procedures

2.4 Compare risk for a range of financial products to client’s risk profile and stated objectives in accordance with client and organisational requirements

2.5 Assess alternative products and estimate long-term and short-term effects

2.6 Identify, analyse and discuss incidents and factors increasing or diminishing financial performance with client

2.7 Confirm that client understands the risk in any potential strategy recommendation

3. Report findings

3.1 Document risk management alternatives in accordance with organisational requirements and relevant legislation

3.2 Prepare and explain retail client disclosure documents, outlining client responsibilities to client

3.3 Update, modify and accurately maintain client information in accordance with organisational and legislative requirements

3.4 Prepare and file risk analysis documentation in accordance with organisational and legislative requirements

Evidence of the ability to:

determine the risk profile of the 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 information and advice on the risks and benefits of financial products and services.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

To complete the unit requirements safely and effectively, the individual must describe key features of client and organisational confidentiality requirements including:

compare and contrast financial information sources and products

outline key information to be obtained from clients

discuss the key risk characteristics

describe the key features of organisational policy and procedures for establishing client risk profiles and reporting

discuss the relationship between ethics and regulatory requirements including the key features of relevant legal principles, and disclosure and compliance requirements

compare and contrast risk assessment criteria and techniques

analyse key economic environment incidents and factors that can impact on financial performance including:

characteristics and impacts of economic and business cycles

government monetary and fiscal policies

interest rates, exchange rates and inflation

discuss product and strategy sensitivity to conditions including:

economic cycle

supply and demand

economic data

exchange rates

interest rates

government or regulatory policy

correlation risk with other markets or asset classes

outline the key theories of the management of investment and risk.