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Mortgage Broking Assignment Discussing Australian Laws & Regulations


The mortgage broking assignment consists of the following tasks:

Written Activity

  1. Relevant Legislation, Regulations and Codes of Practice.
  2. In a manner that would be appropriate to include in the induction package of a new employee, identify and outline the legislation, regulations and codes of practice that affect the broking industry.

  3. Key Products Available In the Broking Industry.
  4. Develop an information flier explaining at least 3 of the key products available in the broking industry.

  5. Organisational Guidelines and Procedures on Assessing Impact of Risks and Documenting Broking Recommendations.
  6. Conduct some research and detail the common organisational guidelines and procedures that are to be applied for assessing the impact of risks and for documenting broking recommendations.

    This task must be completed within 30 minutes.

  7. Relevant Risk Issues.

In a manner that would be appropriate to include in the induction package of a new employee, explain the risk issues that relate to each of the following:

  1. Borrowing risk and gearing.
  2. Economic risk.
  3. Specific product risk.
  4. Institutional risk.
  5. Risk factors and return expectations of the client.
  6. Volatility of income and capital.

Research Task Questions:

Short Answers are required which is approximately 4 typed lines = 50 words

  1. Identity and briefly explain the following types of complex features that you will need to discuss, review and clarify if they relate to a client situation and needs:
    1. Commercial loans.
    2. Chattel leases.
    3. Native title rights.
    4. Heritage issues.
    5. Contaminated sites or properties near noxious industries.
  2. What information do you need to identify when you are exploring and discussing with client’s risk issues and tolerance?
  3. Why is it important to ensure that discussions with clients are conducted comprehensively and ethically?
  4. Briefly explain how to use a risk profile to assess the impact of risks to the client or organisation.
  5. What methods could you use to engage in further questioning and information gathering if you have not gathered sufficient information to complete an adequate risk profile? Discuss at least 2.
  6. What are the areas of the client situation that you may need to analyse to determine their opportunities and constraints?
  7. Discuss 3 of the research methods you could use to research loan structures or options.
  8. What are the 4 areas that you need to analyse complex financial issues in terms of? Briefly describe each.
  9. Identify and define the information you will need to include and compare in your model to analyse and prioritise the available options.
  10. What will you need to do with the available options once you have the outcomes of your modelling?
  11. What are the requirements that you will need to check to ensure the preliminary options comply with?
  12. How can you assess the ability of the preliminary options to successfully meet client needs?
  13. What types of explanatory material could you develop or obtain to help clients review the selected broking options?
  14. Briefly discuss why you might consider a referral to each of the following in a broking situation:
    1. Accountant.
    2. Financial advisor.
    3. Lawyer.
  15. List 3 examples of risk management strategy recommendations you may incorporate into your materials for the client.
  16. Why is it important to include a brief description of the anticipated fees and charges in your client materials?
  17. Briefly discuss the types of information that you would include on complaints resolution, both internal and external, in the client materials.
  18. What information should you include in your documented broking information and loan structures, to be presented to clients?


Mortgage Broking Assignment Written Activity 1:
Relevant Legislation, Regulations and Codes of Practice:
The Consumer Affairs Act:

The Australian Competition and Consumer Commission (ACCC), in cooperation with the Minister for consumer affairs controls this legislation. In this regard, the following acts are also covered-

  • The Credit Act 1984.
  • The Credit (Administration) Act 1984.
  • The Consumer Credit (Victoria) Act 1995.

The Australian Consumer Law is applicable for the purpose of providing fair trading and consumer protection in Australia. The Australian Competition and Consumer Commission (ACCC), also controls the Australian Consumer Law. The Australian Competition and Consumer Commission (ACCC) has been defining the conflict of interests of all the clients to whom a licensee and its agents by providing financial services which are incompatible with or are divergent from some or all of the clients of the agents and their representatives.

The Consumer Credit Code:
The Australian Securities and Investment Commission (ASIC) has been controlling the National Consumer Credit Protection Act 2009 (NCCP).

Contract Law:
The Contract law in Australia has been commissioned to provide-

  • Information related to the Contract.
  • Remedies for breach of contract.
  • Avoiding contractual obligations.
  • Performing and terminating contracts.

The Corporations Act 2001 is a legislation in Australia that has been controlling businesses in Australia in regard to development, takeover of businesses and the roles and responsibilities of administrative higher authorities (Huynh Nguyen and Dao 2021)

Financial business structures usually consider the following codes of conduct-

  • The General Insurance Code of Conduct.
  • The Insurance Broker’s Code of Conduct.
  • The Codes of Banking Practice.

From the very beginning the Insurance Act of 1973 and the Insurance Contracts Act 1984 has been monitoring the activities of the insurance companies in Australia. The Insurance act 1973 covers the safety and the capital requirements of the clients (Wong et al., 2020). The Insurance Act of 1984 provides assurance to the interests and capitals of both the insurance providers and the customers for the purpose of fair preservation of their interests.

The Competition and Consumer Act 2010 has come into being by replacing the Trade Practices Act 1974. The purpose of the Competition and Consumer Act 2010 is to restore the rights of the citizens of Australia by keeping in consideration the practices of fair trading and competition for the purpose of ensuring consumer safety.

The Trust Act of 1973 has been outlining the rights and responsibilities of the beneficiaries and trustees (Wong et al., 2020). The nature of the Act is such that it helps in maintaining a relationship between the holder of the property and the beneficiaries.

Written Activity 2:
The availability of key products in the Broking Industry:

The key products available in the Broking Industry can be categorized into-

  • Direct Investments: In accordance to the International Monetary Fund, the concept of direct investment can be defined as the investment that has been settled for the purpose of gaining permanent interest in the industry which operates within the economy other than that of the investor.
  • Insurance: Insurance can be defined as the contract under which the insurer by considering the receipt of the premium undertakes to pay an amount to the insured on the occurring of specified events for instance death or damage of properties. In Australia, the laws pertaining to insurance are covered by the Insurance Act 1973 and the Insurance Contracts Act 1984. In this regard, the two key regulators that has been identified are the Australian Securities and Investments commission and the Australian Prudential regulation Authority.
  • Loan: in Australia, the National Consumer Credit Protection Act 2009 has been setting out the guidelines in which the lenders must act while assessing loan applications. The Act emphasizes on the part that how a lender may provide loan to the borrower.

Written Activity 3:
The organizational guidelines and procedures on evaluating the impact of risks and documenting Broking Documentations:

Each and every client is required to undertake the preparation of different levels of risk. In this regard, it is worthwhile to mention here that by way of active conversation with the client the determination of the best possible level of investment risk of the client shall be undertaken by the broker (Wong et al., 2020). In order to assess the impact of the risks the following factors shall be taken into account-

  • The level of risk requirement: The gain on investment can be calculated by considering this factor.
  • The tolerance of risk: The level of risk is such that it can be identified by the client and overcome.
  • The capacity of risk: This factor is concerned with the level of financial risk that can be undertaken by the client.

In order to pave the way for organizational guide in the documentation of broking recommendation, the following factors must be considered-

  • The details of the client.
  • The aims and objectives of the client.
  • The recommendation of outlines along with a valid explanation.
  • The assessment of risk with recommendations.
  • The processes of internal and external complaints if any.
  • The applicable charges and fees.

Written Activity 4:
The relevant risk issues:

  1. Borrowing risk and gearing: This factor is concerned with the borrowing of funds for the purpose of making investments in a particular stock. This kind of activity is associated with certain risks as a result of high returns in rising market value. In case of borrowing risk and gearing of loses can prove to be of serious consequence in case the market value drops.
  2. Economic risk: The nature of the risk is such that it is applicable in case of both domestic and international investment (Dean and Marshall, 2020). In case of domestic investment, the return on certain investments namely shares gets affected by the economic factors.
  3. Specific product risk: It is noteworthy to mention here that there is always a degree of risk associated with each and every product.
  4. Institutional risk: The risk is associated with the postulation of vague institutional performances. For instance, during the time of institutional and market failure nobody can expect the consequences it is likely to impact. However, in case of such failure, the client must be aware about the possible risks linked with such non-performance of markets.
  5. Risk factors and return expectations of the client: the current industry practices consider three major steps in identifying the risk factors and measuring the return expectations of the client-
  • By constructing a wide variety of portfolios with differences in risk and returns based on the availability of financial instruments.
  • Obtaining the understanding of the particular risk preferences of the investor.
  • Identifying the preferences of the investors regarding the tolerance of the risk.

Volatility of income and capital: The nature of the risk concerned with the uncertain changes in the security value can be defined as volatility. In this regard higher volatility can be referred to the security values (Alpert, 2018). On the other hand, lower volatility is referred to as the security values that do not change drastically with the change in security values.

Written Oral Questions:
Answer 1:

  1. Commercial loans: The rates of commercial interests’ rates may vary in accordance to the fact whether they are fixed or variable or whether they are secured by way of residential and commercial property or not.
  2. Chattel leases: the contracts governing the leasing of Chattels are governed by the consumer Transaction Act 1972. The purpose of this Act is to evaluate the chattel leasing agreement with reference to the provisions and regulations of a standard form of contract.
  3. Native title rights: The native title right is the right provided to the people of Aboriginal and Torres Strait Islander for the purpose of reserving their rights and interests to land in accordance to the provisions of the Native Title Act 1993 (Cth).
  4. Heritage Issues: The World Heritage Convention 1972 is an international legal instrument that has been addressing and preserving the global heritage of Australia since ages Kannan, Shanmugam and Bhaduri, 2019). Acts seeks to protect the heritage from physical decay for the purpose of retaining both cultural and natural heritage of Australia.
  5. Contaminated sites or properties near noxious industries: The Contaminated Land Management Act 1997 has been regulating the contaminated sites in cases where the level of contamination is significant enough to warrant regulation.

Answer 2:
During the first meeting with a client it is important to clear the reasons for discussions. The client must be encouraged to share information pertaining to their objectives and requirements (Cardak, Martin and McAllister 2019). This will help the broker in evaluating and profiling the risks of the client.

Answer 3:
The discussions with the clients should be done ethically and comprehensively for the purpose of maintaining transparency. It is important to inform the client regard the inclusion of any hidden costs beforehand.

Answer 4:
The practice of risk profiling helps in the identifying and addressing the attitude of the customers towards the risk. The suitability certain products depend upon the successful risk assessment of a client which remains incomplete without risk profiling.

Answer 5:
The methods are-

  • Risk tolerance method: This method involves a scale for the purpose of measuring the risk tolerance in clients. The scale is usually constructed in six-twelve points (Cope, Bauder and Cope, 2018).
  • Risk Profiling: This method contains a series of questionnaire for the purpose of judging the attitude of the clients towards financial outcomes.

Answer 6:
In order to determine the opportunities and the constraints of the project, it is determining to identify the budget and timeline of the client (Jreisat, 2018). The time and cost constraints of the clients are such that it helps in self-explanatory and easily measured. The project should be completed within stipulated timeline.

Answer 7:
The three research methods are-

  • Surveys: Online surveys saves a lot of time and is inexpensive. Such online surveys provide reliable information about the client.
  • Personal Interviews: The interview shall consist of interviews with the clients in order to collect subjective data.
  • Field trials: The placement of a new product in stores in concerned with testing of the client’s responses towards it.

Answer 8:
The four areas of financial analysis are-

  • Vertical: This financial analysis is concerned with the various components of income statements.
  • Horizontal: This financial analysis is concerned with the collection of financial data and comparing them with each other.
  • Leverage: The leverage ratio method is used in evaluating the performance of the companies
  • Growth: The historical growth rates are required for future projections.

Answer 9:
In regard to the fundamental objectives, these objectives will be prioritized on identification. The metrics for these fundamental objectives shall indicate the possible levels of achieving such objectives. The range is from low risk of tolerance to high-risk tolerance. The client is instructed to tick on a particular place.

Answer 10:
The What-if analysis tool can be utilized in this regard in an excel sheet. In this regard, the specification of the result can be gained by inserting relevant formula. The responses of each client will be measured by a particular score. The score is compared in regard to other risk profiling methods.

Answer 11:
An effective audit takes place in regard to the minimal disruption of the company. The perquisites for an effective audit can be measured in regard to the understanding of the company and the team. If the day to day activities of the employees of the organization are audited on regular basis, then long term improvement can be observed.

Answer 12:
In order to meet the needs of the client one needs to consider-

  • Collection of potential information pertaining to both personal and profession life by prior approval.
  • Utilizing the gathered data by sealing the confidentiality of certain matters.
  • Gathering data from outside by including google and other reliable sources of internet.

Answer 13:
The brokerage manual providing an efficient explanatory material for reviewing client brokerage options. The explanatory material contains all relevant information related to mortgage brokerage.

Answer 14:

  • Accountant: Takes care of the financial matters of the company.
  • Financial advisor advises matters regarding finance.
  • A lawyer looks after the legal issues of the clients and the company.

Answer 15:

  • Risk transference: This is concerned with transfer of risks.
  • Risk acceptance: This is concerned with acceptance of risks.
  • Risk avoidance: This is concerned with the future avoidance of identified risks.

Answer 16:
It is important to inform the client regarding the fees beforehand in order to avoid discrepancy. Any hidden fess should be disclosed before signing the policy. In such cases, the interests of the clients will be affected and the insurance companies will face serious consequences.

Answer 17:
The contact information of the individual should be mentioned in the complaint resolution. There must be a complaint resolution form where the contact details of the individuals should be there containing all the necessary areas of complaints that needs to be addressed.

Answer 18:
The documents required are-

  • Passport.
  • Driving licence.
  • Identity card.
  • Residential card.
  • Any additional documents if any.

Alpert, K., 2018. Investing with one hand tied behind your back–An Australian perspective on United States tax rules for non-resident citizens. Available at SSRN 3097931.

Cardak, B.A., Martin, V.L. and McAllister, R., 2019. The effects of the Global Financial Crisis on the stock holding decisions of Australian households. The North American Journal of Economics and Finance, 50, p.100983.

Cope, D., Bauder, Y. and Cope, L., 2018. International competition policy and regulation of financial services–lessons for Australian fintech. Mortgage broking assignment Australian Centre for Financial Studies.

Dean, O. and Marshall, S., 2020. A race to the middle of the pack: An analysis of slavery and human trafficking statements submitted by Australian banks under the UK Modern Slavery Act. Australian Journal of Human Rights, 26(1), pp.46-73.

Huynh, N., Nguyen, D. and Dao, A., 2021. Sectoral Performance and the Government Interventions during COVID-19 Pandemic: Australian Evidence. Journal of Risk and Financial Management, 14(4), p.178.

Jreisat, A., 2018. Productivity growth of the Australian real estate investment trusts. Electronic Journal of Applied Statistical Analysis, 11(1), pp.58-73.

Kannan, R., Shanmugam, K.R. and Bhaduri, S., 2019. Non-banking financial intermediaries: International experiences. In Non-Banking Financial Companies Role in India's Development (pp. 103-124). Springer, Singapore.

Wong, S.Y., Susilawati, C., Miller, W. and Mardiasmo, D., 2020. Perspectives of Australian property practitioners on sustainability features in residential property. Journal of Housing and the Built Environment, pp.1-23.


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