Discuss about the Client Engagement Strategies and Procedure.
Three regulatory guides as relevant to the procedure
There are three important regulatory guides in response to current procedures. This includes:
1. Best interest’s duty- It is an advice provider in acting for best interests of client as provided by each client.
2. Safe harbor in complying with best interests of duty- From the Section 96 1B (2), it suggests safe harbor in advising providers for relying ways in compiling with best interests of clients[1].
3. Prioritizing interests of clients- At the time of providing clients with appropriate advice, it is necessary in placing best interests of the clients in selection of related parries as far as possible.
The document procedures have to be identified as per the financial planning needs of the organization . In this regard , it can be said it is necessary that the relevant procedures have to be met as per the guidelines established pre-determined at the outset. Financial transparency is one of the essential attributes that have to be achieved on a regular basis . The documenting procedures start at when the organization is established. Therefore, it is necessary that the procedures adhere to the guidelines relating to the formation of a business entity. Thus detailed information is to be provided to the concerned authority relating to the names of the partners, and the nature of the product or service line the company is operating.
The risk management procedures have to compliant as per the legislation and t he regulations as per the guidelines for recording of financial transactions and the planning of finance in the statement of accounts. However, the risk management procedures have to be modified as per the nature of the product and the service line the organization is operating . In this regard , it can be said that the risk management procedures have to be classified per the scale of operations the firm . The risk management procedures primarily deals in the reducing financial risk of the business enterprise In addition, it relates to reducing the wastage of both financial and non-financial resources of the firm . In Australia, the legislations and the regulations have been strictly established to create fair and transparent policies in the context of financial planning[2]. Thus, both business organizations and individuals have been beneficiary of the effective financial policies established for the firm.
The appropriate resources that has been required in adhering to the financial and the non-financial resources . The legislative and the e regulations have to be strictly followed in establishing effective financial policies for the business entity[3]. As such , it is necessary that the operational policies of the business entity have to be framed in order to develop the inherent financial strength of the business entity as well as meeting the short-term needs of the organization . As such, it can be said that the financial planning shall be done in order to ensure smoother business operations. Thus, allocating of suitable resources for the firm becomes essential so that every department like finance , Human resources and marketing have the appropriate financial resources to execute daily business functionalities in an appropriate manner. To reduce the operational expenses of the business enterprise , it is necessary that the financial planning has to be done in an effective manner.
The legislations, regulations and codes of practice that are relevant to the professional financial planning practice include few standards. These are – establishment and defining the relationship of the professional financial planner with the client, collecting various data and information regarding the client. It also includes the analysis and evaluation of the financial status of the client, development and presentation of the financial planning recommendation. Additionally, this includes the implementation of the financial planning recommendations and monitoring them. As per the FOFA reforms, the Code of Professional Practice is the essential element of the Professional Framework which promotes high professional standards and also the consumer protection. The financial planning association of Australia intends to help the members of FPA in understanding the code and the association also guides its members whenever serious situations take place due to breaching of code[4]. The FPA practitioner members are guided by the FPA Code of Professional Practice that brings a comprehensive set of ethical principles together and also brings the conduct rules and practice standards together. The code is composed of three components, these are – the Principles of Conduct, the Standards of Conduct and the Financial Planning Practice Standards. The Principles of Conduct serves in order to describe the particular qualities that are generally aspires by the professional members in the practicing of their professions. The Standards of Conduct are set out regarding the methods by which the professional members should guide their conduct in the process of practicing their profession. It also helps in the adherence of the Principles of Conduct and to apply and implement them in the Financial Planning Practice Standards. These financial standards are generally set out in the procedure as per which the professional members usually practice their profession. Therefore, it can be said that for the professional financial planning practice, all these three components of the Code are interdependent on each other and it has also been found that none of the components take precedence over other in the interpretation of the Code. The Principles and Standards of Conduct are regulated as per the Financial Services Board (FSB) model[5]. The FPI needs professional members in order to get attached with the 8 principles. These include – client first, integrity, objectivity, fairness, professionalism, competence, confidentiality and diligence. The standards of conduct are composed of ten elements of the Code. These include – the relationships with the prospects and clients, promotion of the services, remuneration, disclosures, professional conduct, duty to the employers, fiduciary responsibilities, conflict of the interest, continuous professional development and responsibilities to the FPI.
Identify one current code of conduct/code of practice which relates to this compliance procedure and the date it was last revised
It is mandatory in understanding the fact relating providing safe advice to the clients at the time of making financial planning. ASIC monitoring of the provision of advice includes reviewing the provision at the same time. It reveals determining of objectives for promotion of ASIC guidance. It especially relies on vital information like:
Monitoring certain investor complaints
It requires further consultation in accordance with industry as well as retail investor representatives
It requires further consumer research as well as projects in and from industry or retail investor representatives at the sa
Identify at least one legislative act introduced after November 2008 that is relevant to the provision of financial advic
The Corporations Amendment (Further Future of Financial Advice Measures) Act 2012 has stated the structured guideline relating to the buying and the selling of financial products in the Australian market. After November 2008, legislative act was introduced in way of influencing certain circumstances for future analysis purpose. It is a recommendation or a statement of opinion in case for satisfying attributes in constitutes of financial product advice in an overall manner[7]. Under the Corporations Act, it includes all financial products in gaining personal advice at the same time. The conduct as well as disclosure obligations reveal the fact relating providing entities in the most appropriate way. It aims at providing entities in AFS licenses or authorized representatives in an effective way. On critical analysis, it is noticed that licensee provides financial product advice in and through employee for future analysis purpose
Identify any changes that should be made to the procedure as a result of any new legislation or updated codes of conduct or regulatory guide
There is relevant change in procedures for gaining personal advice for potential client base. Advice should be given on face-to-face meeting with the help of telephone, writing as well as other electronic means. It requires in understanding the illustration between personal advice as well as general advice[8]. Corporations Act mainly requires in providing entities in using exact wordings as far as possible. In the case of minors, the guardians would be held accountable to the buying and the selling of financial products made on the person’s behalf. In addition, any profits shall only benefit the person after completing the age of eighteen. The new changes made would promote transparency at all levels in the buying and the selling of shares, bonds debentures and other financial products. Thus, the Corporations Amendment Act 2012 shall empower regulatory bodies to oversee all trading of the financial products, to prevent any financial discrepancy.
In the case of a client, who does not agree with the advice of the financial adviser, the person can adhere to the amended recommendation of the client. In addition, the deal can be financed due to the separate instructions from the clients. In this context, it can be said that when there is no alterations in the recommendations, a very little amount is there to be invested. In this case, the disclosures of the commissions shall not change in a very little amount. Under the sections “Authority to proceed”, it is essential that the reasons for the changes have been clearly stated. As such, it is necessary that when the commissions vary, the in-depth details of such financial transactions have to be stated to the client. The following procedures shall be adopted when the amended recommendations vary significantly from those of the clien
A new analysis and SoA would be required to be prepared which shall consist of the amended data that is provided to the client. Thus all, the intrinsic details shall be expressly stated without hiding any facts
1. If the alterations have been made due to the preferences of the client, it is necessary that ascertain the reasons behind such changes and its implications on the investments made.
2. The client proceeds as per the chosen investments, the person shall have to sign a “No Advice” statement. This shall consist of the necessary facts that the investment deal has been executed as per the direction of the client. Besides this, the necessary warnings shall have to be stated , in order to give legal protection to the adviser in the case of any losses incurred by the clien
3. If the client does not agree in signing the “No advice form” that consists of the reasons in not adhering to such variations, the financial adviser shall not be legally permitted to execute the investment deal for the client.
4. It aims at providing entities in meeting obligations in conveying substances in client progression in the most appropriate way. The changes that should be made to the procedure as a result of the new legislation or the updated codes of conduct or the regulatory guides (up to February, 2014) include – firstly, the use of the title “Financial Planner” that should be protected in the regulation or law, secondly, the financial planners should be kept to a fiduciary standard of care as per the regulation and law. Thirdly, the use of the related titles should be cover up under the regulation and law. Fourthly, the lapse of the financial planner should be considered by a professional financial planning body.
There are certain risk involves while making the business planning for the client base. It includes business risk whether ascertainment towards loss incurred by the client in the near future. It is of good practice of providing entities in developing own wording for making general advice for warnings for potential clients. It incorporates warning messages into substances in providing general advice at the end of document. It considers ways for special communication needs of client base as far as possible[9]. Business product advertisements aim at identifying issuer for product as well as refer potential buyer in case of PDS or disclosure document in an overall manner. This particular document applies towards advertisement in intended offers as contain in s989A warning as far as possible. Corporations Act provides restriction of words in and by using of business products. AFS licensees as well as representatives provide personal advice to major retail clients. They take ongoing fee arrangement for potential client base in the best possible ways.
The following are the risks that the business entity can face if the organization follows the existing procedure .
Financial risk – The financial risk is one of the primary attributes in operating in an intensively competitive market environment. There are certain financial risks in executing the daily operational policies of the business entity as per the pre-determined objectives of the business entity without assessing the actual business realities in the domestic market. The market risks have been a major threat to the business sustainability of an entity .The business planning guideline established at the outset shall assist the business entity in having a strong business position and retaining a large fund for enhancing the existing operational strategies for the business entity[10].
Legal Action – This is another risk that financial institutions have to face when conducting daily transactions , in the context of any financial discrepancy. It is necessary that the financial institutions adhere to the specific legal guidelines when executing financial market transactions in the Australian domestic market. As such, this would bring a level of transparency and credibility to the market transactions in the organization.
Non- financial constituents – The operational risk mainly relates to wastage of the non-financial resources of the entity. This also considers the factors that can hamper the daily business functionalities of the entity . These include, the shortage of manpower and the lack of adequate technology as well failure in accurate assessment of the existing market conditions.
Consumer issues – It is necessary that consumer issues are adequately dealt with to prevent any negative perception on the part of the buyers. It is the primary responsibility of the ASIC to ensure that the operational processes of the entity shall be consistent with the pre-determined measures established at the beginning of the year.
Reference
Albrecht W, Stice E and Stice J, Financial Accounting (Thomson/South-Western 2011)
Baltazar E, International GAAP 2012 (John Wiley & Sons 2012)
Charupat N, Huang H and Milevsky M, Strategic Financial Planning Over The Lifecycle (Cambridge University Press 2012)
Davies C, Winning Client Trust (Ecademy Press 2011)
Estate Planning, 2012 (Keir Educational Resources 2012)
Ferran E, and Look Chan H, Principles of corporate finance law (Oxford University Press 2014)
Insurance Planning 2012 (Keir Educational Resources 2012)
Investment Planning 2012 (Keir Educational Resources 2012)
Newton R, The Management Consultant (Financial Times/Prentice Hall 2010)
Whittington R and Delaney P, Outlines And Study Guides (Wiley 2011)
Discuss about the Client Engagement Strategies and Procedure.
Three regulatory guides as relevant to the procedure
There are three important regulatory guides in response to current procedures. This includes:
1. Best interest’s duty- It is an advice provider in acting for best interests of client as provided by each client.
2. Safe harbor in complying with best interests of duty- From the Section 96 1B (2), it suggests safe harbor in advising providers for relying ways in compiling with best interests of clients[1].
3. Prioritizing interests of clients- At the time of providing clients with appropriate advice, it is necessary in placing best interests of the clients in selection of related parries as far as possible.
The document procedures have to be identified as per the financial planning needs of the organization . In this regard , it can be said it is necessary that the relevant procedures have to be met as per the guidelines established pre-determined at the outset. Financial transparency is one of the essential attributes that have to be achieved on a regular basis . The documenting procedures start at when the organization is established. Therefore, it is necessary that the procedures adhere to the guidelines relating to the formation of a business entity. Thus detailed information is to be provided to the concerned authority relating to the names of the partners, and the nature of the product or service line the company is operating.
The risk management procedures have to compliant as per the legislation and t he regulations as per the guidelines for recording of financial transactions and the planning of finance in the statement of accounts. However, the risk management procedures have to be modified as per the nature of the product and the service line the organization is operating . In this regard , it can be said that the risk management procedures have to be classified per the scale of operations the firm . The risk management procedures primarily deals in the reducing financial risk of the business enterprise In addition, it relates to reducing the wastage of both financial and non-financial resources of the firm . In Australia, the legislations and the regulations have been strictly established to create fair and transparent policies in the context of financial planning[2]. Thus, both business organizations and individuals have been beneficiary of the effective financial policies established for the firm.
The appropriate resources that has been required in adhering to the financial and the non-financial resources . The legislative and the e regulations have to be strictly followed in establishing effective financial policies for the business entity[3]. As such , it is necessary that the operational policies of the business entity have to be framed in order to develop the inherent financial strength of the business entity as well as meeting the short-term needs of the organization . As such, it can be said that the financial planning shall be done in order to ensure smoother business operations. Thus, allocating of suitable resources for the firm becomes essential so that every department like finance , Human resources and marketing have the appropriate financial resources to execute daily business functionalities in an appropriate manner. To reduce the operational expenses of the business enterprise , it is necessary that the financial planning has to be done in an effective manner.
The legislations, regulations and codes of practice that are relevant to the professional financial planning practice include few standards. These are – establishment and defining the relationship of the professional financial planner with the client, collecting various data and information regarding the client. It also includes the analysis and evaluation of the financial status of the client, development and presentation of the financial planning recommendation. Additionally, this includes the implementation of the financial planning recommendations and monitoring them. As per the FOFA reforms, the Code of Professional Practice is the essential element of the Professional Framework which promotes high professional standards and also the consumer protection. The financial planning association of Australia intends to help the members of FPA in understanding the code and the association also guides its members whenever serious situations take place due to breaching of code[4]. The FPA practitioner members are guided by the FPA Code of Professional Practice that brings a comprehensive set of ethical principles together and also brings the conduct rules and practice standards together. The code is composed of three components, these are – the Principles of Conduct, the Standards of Conduct and the Financial Planning Practice Standards. The Principles of Conduct serves in order to describe the particular qualities that are generally aspires by the professional members in the practicing of their professions. The Standards of Conduct are set out regarding the methods by which the professional members should guide their conduct in the process of practicing their profession. It also helps in the adherence of the Principles of Conduct and to apply and implement them in the Financial Planning Practice Standards. These financial standards are generally set out in the procedure as per which the professional members usually practice their profession. Therefore, it can be said that for the professional financial planning practice, all these three components of the Code are interdependent on each other and it has also been found that none of the components take precedence over other in the interpretation of the Code. The Principles and Standards of Conduct are regulated as per the Financial Services Board (FSB) model[5]. The FPI needs professional members in order to get attached with the 8 principles. These include – client first, integrity, objectivity, fairness, professionalism, competence, confidentiality and diligence. The standards of conduct are composed of ten elements of the Code. These include – the relationships with the prospects and clients, promotion of the services, remuneration, disclosures, professional conduct, duty to the employers, fiduciary responsibilities, conflict of the interest, continuous professional development and responsibilities to the FPI.
Identify one current code of conduct/code of practice which relates to this compliance procedure and the date it was last revised
It is mandatory in understanding the fact relating providing safe advice to the clients at the time of making financial planning. ASIC monitoring of the provision of advice includes reviewing the provision at the same time. It reveals determining of objectives for promotion of ASIC guidance. It especially relies on vital information like:
Monitoring certain investor complaints
It requires further consultation in accordance with industry as well as retail investor representatives
It requires further consumer research as well as projects in and from industry or retail investor representatives at the sa
Identify at least one legislative act introduced after November 2008 that is relevant to the provision of financial advic
The Corporations Amendment (Further Future of Financial Advice Measures) Act 2012 has stated the structured guideline relating to the buying and the selling of financial products in the Australian market. After November 2008, legislative act was introduced in way of influencing certain circumstances for future analysis purpose. It is a recommendation or a statement of opinion in case for satisfying attributes in constitutes of financial product advice in an overall manner[7]. Under the Corporations Act, it includes all financial products in gaining personal advice at the same time. The conduct as well as disclosure obligations reveal the fact relating providing entities in the most appropriate way. It aims at providing entities in AFS licenses or authorized representatives in an effective way. On critical analysis, it is noticed that licensee provides financial product advice in and through employee for future analysis purpose
Identify any changes that should be made to the procedure as a result of any new legislation or updated codes of conduct or regulatory guide
There is relevant change in procedures for gaining personal advice for potential client base. Advice should be given on face-to-face meeting with the help of telephone, writing as well as other electronic means. It requires in understanding the illustration between personal advice as well as general advice[8]. Corporations Act mainly requires in providing entities in using exact wordings as far as possible. In the case of minors, the guardians would be held accountable to the buying and the selling of financial products made on the person’s behalf. In addition, any profits shall only benefit the person after completing the age of eighteen. The new changes made would promote transparency at all levels in the buying and the selling of shares, bonds debentures and other financial products. Thus, the Corporations Amendment Act 2012 shall empower regulatory bodies to oversee all trading of the financial products, to prevent any financial discrepancy.
In the case of a client, who does not agree with the advice of the financial adviser, the person can adhere to the amended recommendation of the client. In addition, the deal can be financed due to the separate instructions from the clients. In this context, it can be said that when there is no alterations in the recommendations, a very little amount is there to be invested. In this case, the disclosures of the commissions shall not change in a very little amount. Under the sections “Authority to proceed”, it is essential that the reasons for the changes have been clearly stated. As such, it is necessary that when the commissions vary, the in-depth details of such financial transactions have to be stated to the client. The following procedures shall be adopted when the amended recommendations vary significantly from those of the clien
A new analysis and SoA would be required to be prepared which shall consist of the amended data that is provided to the client. Thus all, the intrinsic details shall be expressly stated without hiding any facts
1. If the alterations have been made due to the preferences of the client, it is necessary that ascertain the reasons behind such changes and its implications on the investments made.
2. The client proceeds as per the chosen investments, the person shall have to sign a “No Advice” statement. This shall consist of the necessary facts that the investment deal has been executed as per the direction of the client. Besides this, the necessary warnings shall have to be stated , in order to give legal protection to the adviser in the case of any losses incurred by the clien
3. If the client does not agree in signing the “No advice form” that consists of the reasons in not adhering to such variations, the financial adviser shall not be legally permitted to execute the investment deal for the client.
4. It aims at providing entities in meeting obligations in conveying substances in client progression in the most appropriate way. The changes that should be made to the procedure as a result of the new legislation or the updated codes of conduct or the regulatory guides (up to February, 2014) include – firstly, the use of the title “Financial Planner” that should be protected in the regulation or law, secondly, the financial planners should be kept to a fiduciary standard of care as per the regulation and law. Thirdly, the use of the related titles should be cover up under the regulation and law. Fourthly, the lapse of the financial planner should be considered by a professional financial planning body.
There are certain risk involves while making the business planning for the client base. It includes business risk whether ascertainment towards loss incurred by the client in the near future. It is of good practice of providing entities in developing own wording for making general advice for warnings for potential clients. It incorporates warning messages into substances in providing general advice at the end of document. It considers ways for special communication needs of client base as far as possible[9]. Business product advertisements aim at identifying issuer for product as well as refer potential buyer in case of PDS or disclosure document in an overall manner. This particular document applies towards advertisement in intended offers as contain in s989A warning as far as possible. Corporations Act provides restriction of words in and by using of business products. AFS licensees as well as representatives provide personal advice to major retail clients. They take ongoing fee arrangement for potential client base in the best possible ways.
The following are the risks that the business entity can face if the organization follows the existing procedure .
Financial risk – The financial risk is one of the primary attributes in operating in an intensively competitive market environment. There are certain financial risks in executing the daily operational policies of the business entity as per the pre-determined objectives of the business entity without assessing the actual business realities in the domestic market. The market risks have been a major threat to the business sustainability of an entity .The business planning guideline established at the outset shall assist the business entity in having a strong business position and retaining a large fund for enhancing the existing operational strategies for the business entity[10].
Legal Action – This is another risk that financial institutions have to face when conducting daily transactions , in the context of any financial discrepancy. It is necessary that the financial institutions adhere to the specific legal guidelines when executing financial market transactions in the Australian domestic market. As such, this would bring a level of transparency and credibility to the market transactions in the organization.
Non- financial constituents – The operational risk mainly relates to wastage of the non-financial resources of the entity. This also considers the factors that can hamper the daily business functionalities of the entity . These include, the shortage of manpower and the lack of adequate technology as well failure in accurate assessment of the existing market conditions.
Consumer issues – It is necessary that consumer issues are adequately dealt with to prevent any negative perception on the part of the buyers. It is the primary responsibility of the ASIC to ensure that the operational processes of the entity shall be consistent with the pre-determined measures established at the beginning of the year.
Reference
Albrecht W, Stice E and Stice J, Financial Accounting (Thomson/South-Western 2011)
Baltazar E, International GAAP 2012 (John Wiley & Sons 2012)
Charupat N, Huang H and Milevsky M, Strategic Financial Planning Over The Lifecycle (Cambridge University Press 2012)
Davies C, Winning Client Trust (Ecademy Press 2011)
Estate Planning, 2012 (Keir Educational Resources 2012)
Ferran E, and Look Chan H, Principles of corporate finance law (Oxford University Press 2014)
Insurance Planning 2012 (Keir Educational Resources 2012)
Investment Planning 2012 (Keir Educational Resources 2012)
Newton R, The Management Consultant (Financial Times/Prentice Hall 2010)
Whittington R and Delaney P, Outlines And Study Guides (Wiley 2011)
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