REAA FNS40815 Fnsasic 302 Assessment 1 Knowledge.pdf PDF

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FNS40815 Certificate IV in FINANCE & MORTGAGE BROKING FNSASIC302 Develop, present and negotiate client solutions Assessment 1 - Knowledge

FNS40815_ FNSASIC30 2 Assessment 1 Knowledge

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Released November 2018 Page 1 of 11

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Activity 1 Identify and explain key elements of RG245 that AFS licencees and representatives must consider when entering into ongoing fee arrangements. (Explain the legal environment including disclosure and compliance covering the role of the representative or adviser).

Activity 1 Answer RG 245.41 If the ongoing fee arrangement has been assigned during the 12-month period covered by the FDS, the FDS must include information about the fees paid to the assignor and the services received (or entitled to be received) from the assignor, as well as the fees paid to the current fee recipient (i.e. the assignee) and the services received and entitled to be received from the current fee recipient during that 12-month period: s962H.

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Released November 2018 Page 3 of 11

Activity 2 Explain the legal basis and purpose of providing a statement of advice to a client. (Explain the legal environment including disclosure and compliance covering relevant legal principles).

Activity 2 Answer Purpose of providing a statement of advice to a client: A Statement of Advice (SOA) is a document that sets out your situation and goals, and our corresponding financial advice. You will receive an SOA when we provide you with personal financial advice that takes into consideration your personal objectives, financial situation and needs. The purpose of an SOA is to communicate to the client important and relevant information about the advice so they can make an informed decision

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Activity 3 Explain the legal and ethical issues surrounding the payment of trailing commissions to finance and mortgage brokers and advisers. (Explain the legal environment including disclosure and compliance covering the relationship between ethics and regulatory requirements).

Activity 3 Answer legal and ethical issues: 1. Makes possible for the professionals to make it a career 2. Makes the product reach deeper 3. Ensures Investors invested in quality products. 4. Ensures investors gets best service from the advisor.

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Activity 4 Identify and explain the regulatory basis for risk disclosure in the Australian financial planning industry. (Name relevant industry codes of practice and conduct).

Activity 4 Answer RG 175.1 Part 7.7 and Div 2 of Pt 7.7A of the Corporations Act 2001 (Corporations Act)

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Released November 2018 Page 6 of 11

Activity 5 Explain what a client should do if they have a complaint about a statement of advice. (Identify complaints resolution procedures (internal and external).

Activity 5 Answer Client can tell advisor about their complaint and ask advisor to review their statement of advice as they are not happy with one provided and can resolve the issue with their advisor.

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Activity 6 RG245 requires Financial Service Providers to issue Fee Disclosure Statements (FDS) to clients who enter into ongoing fee arrangements. How must a FSP provide FDSs to clients? (Outline relevant ASIC regulatory guidelines).

Activity 6 Answer If the ongoing fee arrangement has been assigned during the 12-month period covered by the FDS, the FDS must include information about the fees paid to the assignor and the services received (or entitled to be received) from the assignor, as well as the fees paid to the current fee recipient (i.e. the assignee) and the services received and entitled to be received from the current fee recipient during that 12-month period: s962H.

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Released November 2018 Page 8 of 11

Activity 7 Are insurance brokers required to issue a statement of advice to their clients? Explain your answer. (Summarise the characteristics and participants of Australian insurance markets and the roles played by intermediaries).

Activity 7 Answer Yes insurance brokers required to issue a statement of advice to their clients. Insurance Brokers can prepare a customised insurance and risk management program for the business, where they design the policies, negotiate the terms with insurance companies and place the cover with the insurer. Insurance broker can help purchasing Personal Accident or Sickness insurance and obtain Personal Advice, that is, advice that takes into account of particular circumstances and can give statement of advice.

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Released November 2018 Page 9 of 11

Activity 8 What regulatory code must a business involved in EFT consider? (The types of deposit products products).

Activity 8 Answer The ePayments Code plays an important role in the regulation of electronic payment facilities in Australia.

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Released November 2018 Page 10 of 11

Activity 9 Explain the legal basis of the term ‘non-cash payments”. (The types of non-cash payment products).

Activity 9 Answer An NCP is a payment not made through the physical delivery of Australian or foreign currency. Examples of NCP facilities include stored value cards, electronic cash and direct debit services. NCP facilities were expressly included as financial products in the Financial Services Reform Act 2001 (FSR Act) because they were clearly intended to be regulated as part of the financial services regulatory regime. For example, we consider that the financial services regulatory regime was clearly intended to regulate most debit cards and online payment arrangements. Such facilities generally allow for transfer of a client’s money to a third party and raise both consumer protection and market integrity issues.

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Released November 2018 Page 11 of 11...