Answer the following questions using the above scenario:
Please note: The answers provided should relate directly to the scenario and be in your own words to demonstrate your understanding (do not copy directly from the notes). The case study in the learners guide is there to assist in your completion of the assessment.
External Stakeholders |
Internal Stakeholders |
· Suppliers · Customers · Local council · Society · competitors |
· Employees · Owners |
External |
Internal |
|
|
|
· Staff · Money · Company culture |
· The economy · Competition · Technology · Politics · Customers and suppliers |
|
Strengths |
Weaknesses |
· Good working environment · Competent staff · High levels of referrals · Stable economy
|
· Limited office space · Limited staff · Non structured staff training · |
Opportunities |
Threats |
· More referrals / new customers · Operating another business · ·
|
· Ageing debtors · Audits that have not been completed · competition |
Define the
this is an organization that deals in mortgage broking business and has been in operation for the last five years.
mortgage loan prequalification-application of loan-processing and verification.
Criteria |
Objectives |
Financial |
To improve the company’s bottom line. |
Operational |
To be the most efficient company in terms of service delivery. |
Health and safety |
To protect the both the staff and society from health risks. |
Compliance/Legal |
To comply with the government laws. |
Technological |
To be most advanced in terms of technology. |
Reputation |
To be a reputed company in terms of delivering services. |
Routine and operational decisions- This are the decisions that have to be made in regard to the operations of the business.
The company has been in operation for over five years and the project has come a long way to be fully established in this location.
Question 2 – Identify risks
Tool |
Reasons |
|
1 |
Risk probability and assessment of impact |
It investigates the likelihood of the specific risks, cost , quality and performance. |
2 |
Risk categorization |
It is to determine the effects of uncertainty and common risk causes |
3 |
Expert judgement |
This is to ensure that risk facilitation workshops, with individual with experience in the project |
4 |
Data gathering |
Risk management plan is used in data collection and identification |
5 |
interviewing |
Interviewing economists on the way forward to determine the economic well-being of CFF |
6 |
Risk categorization |
It is categorizing risks so as to ensure that all risks are classified into their own way |
7 |
Risk urgency assessment |
Assessment of risk will be an essential tool in risk assessment of CFF |
Example of what is required
A financial risk in the scenario could be that the increase in loans (due to the new development) does not continue because the other mortgage broker in the town attracts more clients.
Risk |
Description |
Impact of risk |
Financial/economic |
Expected increase in loans does not continue 2.expected increase in loans will not continue 3.Loan defaulting is minimized 4.Increased loan facilitation |
Risk – CFF could have cash flow shortages because they have put on extra staff and the work is no longer there. Opportunity – CFF could utilise these extra staff to implement a new marketing campaign, carry out client retention or to develop new strategies to bring in more business and increase their sales again. |
Operational |
1.consulting and outsourcing services are important to CFF 2.Disruptive events in CFF 3.Operationalization of 4. |
Risk – – CFF could have cash flow shortages because they have put on extra staff and the work is no longer there |
Compliance/legal |
1. consulting and outsourcing services are important to CFF 2.Disruptive events in CFF 3.Operationalization of legal issues in legal rights of the company |
Risk- CFF could have cash flow shortages because they have put on extra staff and the work is no longer there. Opportunity – CFF could utilise these extra staff to implement a new marketing campaign, carry out client retention or to develop new strategies to bring in more business and increase their sales again. |
Human |
1.Expected increase in in human resource management 2. |
Risk- human resource management, and risk of labour turnover. |
Health & Safety |
1.increased health and safety 2 |
Risk- CFF could have cash flow shortages because they have put on extra staff and the work is no longer there. |
Reputation |
1.expected risk of reputational damage 2 |
Risk- CFF could have cash flow shortages because they have put on extra staff and the work is no longer there. |
What can happen? – again relate it to the scenario
Look at what may or may not happen in the business
Eg loans decrease
How can it happen
List how it might happen – eg the competitor may attract more loans from the new development to his business
Identify existing controls
What has CFF done to identify this risk? Nothing/something?
Adequacy of existing controls?
Assess whether it is:
Use the following matrix to analyse the risks:
Likelihood |
||
Rating |
Expression |
Attributes |
A |
Extremely Likely |
The event will most probably occur under most circumstances |
B |
Likely |
The event will probably occur under most circumstances |
C |
Possible |
The event may occur under certain circumstances |
D |
Unlikely |
The event is unlikely to occur |
E |
Rare |
The event will only occur under most exceptional circumstances |
Negative Consequence |
||
Rating |
Expression |
Attributes |
1 |
Insignificant |
Very minor impact or cost to the business |
2 |
Minor |
Minor cost, up to $5,000 |
3 |
Moderate |
Moderate Impact or cost, up to $30,000 |
4 |
Major |
Significant impact on the business, over $30,000 |
5 |
Disastrous |
Possibly fatal impact to the business. |
OR |
||
Positive Consequence |
||
Rating |
Expression |
Attributes |
1 |
Insignificant |
Small benefit, low financial gain |
2 |
Minor |
Minor improvement to image, some financial gain |
3 |
Moderate |
Some enhancement to reputation, high financial gain |
4 |
Major |
Enhanced reputation, major financial gain |
5 |
Significant |
Significantly enhanced reputation, high financial gain |
L: Low Risk |
manage by routine procedures |
M: Moderate Risk |
responsibility must be specified |
S: Significant Risk |
management attention needed |
H: High Risk |
immediate action needed |
OR
L: Low Opportunity |
manage by routine procedures |
M: Moderate Opportunity |
manage by specific monitoring or response procedures |
S: Significant Opportunity |
management attention needed |
H: High Opportunity |
detailed planning required to prepare for and capture the opportunity |
Likelihood |
A |
S |
S |
H |
H |
H |
B |
M |
S |
S |
H |
H |
|
C |
L |
M |
S |
S |
H |
|
D |
L |
L |
M |
S |
H |
|
E |
L |
L |
M |
S |
S |
|
|
1 |
2 |
3 |
4 |
5 |
|
|
|
Consequence |
Function/Activity: |
|
Compiled by: |
|
Date: |
|
Date of risk review: |
|
Reviewed by: |
|
Date: |
|
Reference |
The risk:
|
Identify existing controls |
Adequacy of existing controls |
Consequence rating |
Likelihood rating |
Level of risk |
Risk Priority |
|
What can happen |
How it can happen |
|||||||
Financial /Economic |
Loans/ mortgage default |
Due to the economic condition in the country, customers may default the loans |
CFF as a lender has put in place measures to evaluate the credit worthiness of a customer |
Effective |
3Moderate |
C |
3 |
M |
Operational |
Internal fraud |
This may happen when some of the employees collude within |
The company conducts internal audits |
Ineffective |
4(MAJOR) |
B |
5 |
H |
Compliance /Legal |
Reputational risk |
This may happen when CFF operates its business in a non ethical manner. |
The company has put in place measures that ensure that the customer is served well and professionally. |
Effective |
3 Positive consequence |
D |
2 |
M |
Extract of Risk Treatment Plan
Function/activity: |
|||||||||
Risk Treatment Plan |
Monitor & Review |
||||||||
Risk reference |
Treatment strategy |
Resources required |
Responsible person |
Timing |
Monitoring requirements |
Review completion date |
Measures of success |
Results |
Options for improvement |
Financial risk |
Creating financial risk mitigation strategies |
finances |
Financial risk manager |
One year |
Financial statements |
12.12.2017 |
Profit or loss |
Profits |
Creating financial risk management strategy |
Operational risk |
Setting systems that increase efficiency |
Money , Time and a good system |
Operational manager |
One year |
Operational and control systems |
12.12.2017 |
Operational efficiency |
Increased efficiency |
Increasing the efficiency |
Compliance/ legal risk |
Creating internal controls that ensure that there is compliance |
Having a constitutional and memorandums of association for legal purposes |
Compliance manager |
One year |
The memorandums , articles and constitution |
12.12.2017 |
Compliance rate |
Reliance on good legal framework |
Creating an elaborate internal control system |
Reputation |
Creating a good name |
Money and time |
Legal officer |
One year |
Controls and operational systems |
12.12.2017 |
Profit or loss |
Increased profits |
Reputational risk and creating a brand |
Health and Safety |
Making sure that safety standards are followed and the entire system is healthy |
Money and Time |
Security officer |
One year |
Controls and operational systems |
12.12.2017 |
Safety and security standards |
Increased security |
Safety improvement |
Complied by: |
Date: |
Reviewed by: |
Date: |
COMMUNICATION PLAN
Purpose |
Who |
What |
How Communication method/s to be used. |
When Ensure timing is accurate and specific for each step in the risk management process. |
Responsibility Who has accountability and responsibility for each task?
|
Management |
System overview,implementation scope, risk, reports, budget, rollout training, strategies and timetables |
Meetings; demos and formal paper based reports. |
As required |
Project lead;implementation team |
Staff/ employees |
Responsibilities, risks , issue resolutions, strategies |
Emails, meetings, bulletin board and work shops. |
Weekly( for status meeting) |
Implementation team leads ( internal and external) |
Customers |
Goals and objectives, business processes |
Emails, advertisements |
All stages |
Payment plans |
suppliers |
Responsibilities, risks , issue resolutions, strategies |
Meetings; demos and formal paper based reports |
All stages |
Implementation team leads ( internal and external) |
customer |
Goals and objectives, business processes |
Meetings; demos and formal paper based reports. |
All stages |
Implementation team leads ( internal and external) |
Society |
Responsibilities, risks , issue resolutions, strategies |
Meetings; demos and formal paper based reports. |
All stages |
Payment plans |
Owner |
Goals and objectives, business processes |
Payment plans |
v All stage |
Payment plans |
Society |
Responsibilities, risks , issue resolutions, strategies |
Payment plans |
All stages |
Implementation team leads |
You are a mortgage broker at Thistown Brokers, Thistown. You do not hold an Australian Financial Services (AFS) Licence. A prospective client calls into the office to discuss his financial requirements. Adam Brody (the client) is interested in purchasing a house in Thistown Heights. Adam recently sold his unit and will be living in the new property with his girlfriend Rachel and dog Penny Lane. The property will be purchased in Adam’s name only. He has $150,000 deposit towards the purchase and is seeking to borrow $400,000 to $450,000.
Adam works as a Sales Manager and earns $120,000 per annum. His fortnightly pay is deposited direct to his transaction account. Adam is seeking a flexible product that does not have a fixed interest rate. Under the FSRA a loan is not classified as a financial product.
After clarifying Adam’s situation and eligibility you have decided to recommend a standard variable loan with FEDBANK. You outline the features and benefits of the product to him, including the redraw facility. After considering these, Adam advises that he often has surplus funds in his transaction account, however would prefer not to deposit these to the loan account in case he needs the funds for other purposes. He often has a balance of $10,000 or more in the account. You consider that an offset instead of a savings account (classified as a financial product under FSRA) option would suit his needs.
Yes, I am allowed to provide the information.Because this facility comes with additional fees for deposits and withdrawals.
Yes, if he requests this information you are allowed to provide this information which is; it saves for you in thefollowing ways get up to 30% no claim bonus discount and reduce your premium by varying your excess.
In case he defaults on the mortgage , he is protected and also covers the cost of monthly mortgage repayments incase of death , job loss or when he is seriously ill.
In order to complete this question you will need to visit the website for Credit Ombudsman Services Limited (“COSL”).
Steven Shields calls Hopetown Brokers and speaks to John Grey (Complaints contact person). Steven has received a letter from Fedbank over a loan application lodged in his name via broker Pauline Peters. He advises John that he has never visited or met with Pauline, nor has he lodged a loan application with Hopetown Brokers. Steven, however, feels that John did not deal with his complaint adequately.
Hopetown Brokers is a COSL member. Steven has tried to resolve the matter with Hopetown Brokers, but is still dissatisfied to the point where he is seeking disciplinary action be taken against Pauline.
Using the COSL Rules (www.cosl.com.au), ascertain if COSL would handle Steven’s complaint and the reason(s) why or why not.
Using the COSL Rules, COSL would be able to handle Stevens complaints as they loan were done by a broker. Hopetown brokers filed and lodged a loan for him. When he talked to John Grey, the complaints contact person, he lodges the complaint. This is because Steven received a letter from Fedbank over a loan application that was lodged in his name via a broker known a Pauline. He has never met or visited the broker. COSL, should crack the whip on rogue brokers who are acting on principals without consultation. COSL will first launch investigations on the application that was lodged and if Stevens was consulted, if not then COSL should use its rules to handle Stevens complaints as a regulator. It should also punish the Pauline Peters.
References
Acharya, V. (2011). Guaranteed to fail. Princeton: Princeton University Press.
Eliot, G. (2016). The mill on the Floss. New York: Open Road Integrated Media.
Retsinas, N. and Belsky, E. (2011). Moving forward. Cambridge, Mass.: Joint Center for Housing Studies, Harvard University.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order formOnce we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignmentAs soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download