Assignment Diploma of Finance and Mortgage Broking Management (DIPMB_AS_v1A3) Student identification (student to complete) Please complete the fields shaded grey. Student number 10326305 Assignment result (assessor to complete) Result — first submission (Details for each activity are shown in the table below) Not yet competent Parts that must be resubmitted: 1, 2, 3, 4, 5, 6, 7 Result — resubmission (if applicable) Not yet competent Parts that must be resubmitted 1,2 3,
Transcript
Assignment
Diploma of Finance and Mortgage Broking Management (DIPMB_AS_v1A3)
Student identification (student to complete)
Please complete the fields shaded grey.
Student number 10326305
Assignment result (assessor to complete)
Result — first submission (Details for each activity are shown in the table below)
Not yet competent
Parts that must be resubmitted:
1, 2, 3, 4, 5, 6, 7
Result — resubmission (if applicable)
Not yet competent
Parts that must be resubmitted
Parts that must be resubmitted 1,2 3,
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Result summary(assessor to complete)
First submission Resubmission (if required) Se
ctio
n 1
Task 1 Not yet demonstrated Not yet demonstrated
Task 2 Not yet demonstrated Not yet demonstrated
Task 3 Not yet demonstrated Not yet demonstrated
Sect
ion
2
Task 4 Not yet demonstrated Demonstrated
Task 5 Not yet demonstrated Demonstrated
Task 6 Not yet demonstrated Demonstrated
Task 7 Not yet demonstrated Demonstrated
Task 8 Demonstrated Demonstrated
Task 9 Demonstrated Demonstrated
Feedback (assessor to complete) A reasonable first attempt at assignment. There are a few questions that require further work. Please be guided by my comments at each task and refer to the self study material for reference.
This is a Diploma level course and expectation is that you are able to follow the instructions to complete each Task. There were occasions where you did not follow all the points and these have been highlighted in my comments. Overall length o your responses was too long and could have been better completed in parts with dot points or tables (e.g. debt serviceability in Task 3 needs to be in table as could the detail of the security that is to be taken and resultant LVR.
Your additional efforts in task 4, 5, 6 and 7 provided sufficient to demonstrate competency. However inn Tasks 1, 2 and 3 your responses do not demonstrate competency in being able to analyse a loan proposal and put together a succinct report to clients with recommendation nor provide appropriate analysis to present a proposal to a lender.
Before attempting again I suggest you review the material more thoroughly, along with any other training materials you have on the subject and draw on knowledge of some experienced brokers/lenders you may work with.
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Before you begin Read everything in this document before you start your assignment forDiploma of Finance and Mortgage Broking Management (DIPMB_AS_v1A3).
About this document
This document includes the following parts:
• Instructions for completing and submitting this assignment
• Results and feedback
• Section 1: Complex lending and broking
• Section 2: Business management skills
Instructions for completing and submitting this assignment
How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete the assignment within your enrolment period. Your study plan is in the KapLearn Diploma of Finance and Mortgage Broking Management (DIPMB_AS_v1A3) subject room.
Completing the assignment
The assignment
This assignment is split over 2sections. The information and data you need to complete Sections 1 & 2 is presented in case studies at the beginning ofthose sections and each task.
Section 1: Complex Lending and Broking
The first section on complex lending and broking, requires you to answer the questions for one (1) of the three (3)available case studies. Each case study focuses on different lending scenario, (see diagram below).
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Section 2: Business management skills
Section 2 requires you to complete the six (6) tasks as listed in this template.
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.
Additional research
When completing this assignment, assumptions are permitted although they must not be in conflict with the information provided in the Case Studies.
You may also be required to source additional information from other organisations in the finance industry to find the right products or services to meet your client’s requirements, or to calculate any service fees that may be applicable.
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work regularly.
• Use the template provided, as other formats will not be accepted for these assignments.
• Name your file as follows: Studentnumber_SubjectCode_Submissionnumber (e.g. 12345678_DFP1B_Submission1).
• Include your student ID on the first page of the assignment.
Before you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.
SECTION 1 SECTION 2
3 questions 6 questions
Chooseone path
PLUS
Case Study A
Case Study B
Case Study C
Investment Property Finance
Commercial Equipment Finance
Commercial Premises Finance
OR
OR
Task 4–9Business
ManagementSkills
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Submitting the assignment
You must submit your completed assignment in acompatible Microsoft Word document. You need to save and submit this entire document.
Do not delete/remove any sections of the document template.
Do not save your completed assignment as a PDF.
The assignment must be completed before submitting it to Kaplan Professional Education. Incomplete assignments will be returned to you unmarked.
The maximum file size is 5MB. Once you submit your assignment for marking you will be unable to make any further changes to it.
You are able to submit your assignment earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.
The assignment marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
Should your assignment be deemed ‘not yet competent’ you will be give an additional four (4) weeks to resubmit your assignment.
Your assessor will mark your assignment and return it to you in the Diploma of Finance and Mortgage Broking Management (DIPMB_AS_v1A3)subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in your assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed assignment.
How your assignment is graded
Assignment tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or skills for each subject. As a result, you will be graded as either competent or not yet competent.
Your assessor will follow the below process when marking your assignment:
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.
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‘Not yet competent’ and resubmissions
Should sections of your assignment be marked as ‘not yet competent’ you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘not yet competent’.
Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.
We are here to help
If you have any questions about this assignment you can post your query at the ‘Ask your Tutor’ forum in your subject room. You can expect an answer within 24 hours of your posting from one of our technical advisers or student support staff.
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Capital City Finance and Mortgage Brokers (CCF & MB) George and Mildred are very happy with the way you service your clients and are sure that you are a good fit for the team. They now want you to turn your focus to your primary task which is to assist in expanding the business by building relationships with selected real estate agents, accountants and legal firms through strategic alliances. They also want you to consider how CCF & MB can consolidate its relationships with its existing strategic partners.
Let’s recap on what you already know about Capital City Finance and Mortgage Brokers (CCF & MB).
It’s a family owned business providing a range of mortgage and finance broking services to the business and private sectors, with experience in all facets of finance and insurance providing expert advice covering a multitude of products and options existing within the market.
CCF & MB specialises in home loans, commercial lending, business lending, personal and motor vehicle finance and insurance (life and general), and focuses on helping clients find the finance service suited to their individual circumstances.
It provides its services through its association with the following partners:
• Australian Aggregators, a rising business in the aggregation business with an extensive panel of residential and commercial lenders, and asset finance.
• ABC General Insurance, a boutique insurance company specialising in a full range of general insurances.
• XYZ Life a small family-owned insurance brokerage specialising in the full range of life insurance products.
Based in the city, CCF & MB has the capacity to service clients from their office or anywhere at their clients’ convenience through its team of mobile brokers.
CCF & MB does not hold a credit license but operates as a credit representative of Australian Aggregators.
Since its inception 13 years ago CCF & MB has built a loan book of almost $1.2 billion and averages over $120 million in new loans annually.
CCF & MB’s vision is to be the mortgage and finance broker of choice in the greater metropolitan area
CCF & MB’s mission statement is to operate professionally in accordance with legislation, our licence and professional standards
CCF & MB’s values are as follows:
• to act with honesty and integrity at all times
• to provide unbiased advice and conduct business, free from any conflict of interest
• to maintain confidentiality in all dealings
• to meet all NCCP regulatory requirements
• to comply with all mortgage industry laws and regulations
• ensure quality and efficiency in its loan processes.
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CCF & MB’s people
CCF & MB is owned by husband and wife, George and Mildred Spencer.
With over 35 years’ experience in finance and business ownership, George established and built a successful business dedicated to assisting clients with managing their finances effectively. Starting the business with his wife Mildred 13 years ago, George gained immense satisfaction in seeing it expand to service more and more clients across the city and greater metropolitan area. Although in recent years he has stepped back from dealing directly with clients, he still maintains a small select clientele. He also takes great pride in training and mentoring his team to enhance their performance.
Mildred has over 22 years of lending experience and is qualified not only to assist her clients with their mortgage requirements but also to assist them with their commercial finance requirements. She also holds financial planning qualifications. She specialises in asset finance.
The company has a small team of five additional consultants and two administration staff members. Profiles for the team is as follows:
• Jennifer Dee is recognised as one of the top female brokers in Australia. She has been in the broking industry for over 10 years and has a passion and dedication to assist and accommodate all of her clients’ needs with their financial dreams. Jennifer is an Accredited Mortgage Consultant with the Mortgage and Finance Association of Australia (MFAA).
• Louise Spencer (George and Mildred’s eldest daughter) is an Accredited Mortgage Consultant with the Mortgage and Finance Association of Australia (MFAA) and has been working as a loan consultant for almost two years. Louise started off in the lending industry in the office as an administrator to gain as much experience and knowledge as possible before taking a broking role. Her passion for helping her clients ensures that she is always available to her clients at a time and place convenient for them.
• Michael Spencer is George’s younger brother and is CCF & MB’s equipment finance specialist. He has over 25 years working in the equipment finance industry. He has developed an in depth understanding of the transport and agricultural industries, and also provides finance for general equipment, motor vehicles and computer equipment.
• Martin Longhas specialised in equipment finance for the last three years, but prior to this he spent five years operating his own retail food business. This practical experience allows him to see things from his client’s point of view, including experience with equipment finance. He specialises in plant and equipment in the machinery, woodworking and packaging industries. Examples of some of the equipment he has financed are farm machinery, extrusion lines, plastic injection moulders, commercial catering equipment, woodworking plant, packaging lines, forklifts, office fit-outs and many different motor vehicles.
• Luis Ramirez migrated to Australia in 25 years ago as a young boy with his family. After completing high school he graduated from university with an accounting degree and worked in ANZ in commercial lending. He joined CCF & MB 4 years ago and specialises in vehicle and capital equipment financing. He provides ITC and general equipment lease funding options for clients. By providing better outcomes, both during and at the end of their equipment leases, Luis’ many clients have been able to reduce costs and maximise the value of their available budgets.
CCF & MB is a member of the MFAA as a broking business dealing directly with the public. Both George and Mildred are fellows of the MFAA. CCF & MB is also a corporate member of the FBAA.
All staff members, including consultants, are paid an annual salary plus superannuation. Consultants also receive a car allowance plus a percentage of trail commissions that are paid quarterly based on their performance targets.
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CCF & MB’s panelled lenders
With access to an extensive panel of lenders, CCF & MB can meet most clients’ expectations. Residential lenders are listed in the following table.
Adelaide Bank Homeloans Limited Pepper Home Loans
AMP Homeside Phoenix-Circle Credit Union
ANZ ING Direct PLAN Lending
Australian Financial Keystart PN Bank
Australian First Mortgage La Trobe Resi
Bank of Melbourne Liberty Financial St George Bank
BankSA Macquarie Suncorp
Bankwest ME Bank The Rock Building Society
Bluestone Mortgage Mart Westpac
Citibank NAB Wide Bay Australia Ltd
Commonwealth Bank Newcastle Permanent
Heritage Bank Peoples Choice Credit Union
Commercial lenders and asset finance providers are listed in the following table.
Adelaide Bank Commercial Bibby Financial Services Pty Ltd Liberty Financial Commercial
ANZ Commercial Commonwealth Bank Commercial NAB Commercial
Australian First Mortgage Commercial IMB Commercial St George Commercial
Bank SA Commercial ING Direct Commercial Suncorp Commercial
Bankwest Business Banking LaTrobe Commercial Westpac Commercial
Adelaide Bank Commercial Macquarie Leasing Westpac Equipment Finance
ANZ Asset Finance Commonwealth Bank Asset Finance Liberty Asset Finance
Future developments
George and Mildred are very keen to expand and grow their business and are in the process of speaking with a number of real estate agents, accountants and legal firms with a view to forming strategic alliances.
Due to the expected increase in business George and Mildred are seeking to employ another consultant to take on the extra work. This person will be required to:
• build strategic relationships with a number of real estate agents, accountants and legal firmsalready identified
• identify and foster relationships with other real estate agents, accountants and legal firms
• provide finance and mortgage broking services to new clients identified through these strategic alliances.
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Section 1: Complex lending and broking
Only complete Tasks 1–3 for one (1) of the case studies in Section 1
Case study A— Tom and Steve Broad
Background
Congratulations, you have just been appointed by George and Mildred as the new consultant to handle the extra work. Whilst your major focus is to build the strategic relationships you are also expected to build your own client base using your own connections and networks.
Two brothers, Tom and Steve Broad have approached you with their desire to jointly purchase two apartments in the same building. They want to purchase them as rental properties. The building has 12 apartments. The units have 80% permanent tenants in place and the remaining 20% are used for holiday rentals. The location is a highly sought after area and all holiday periods are fully booked.
The brothers have invested together before and have experience in buying and selling property. They have sold all their other investment properties and the units will be their only investment until they can identify another opportunity. The cash at bank is mostly from the sales of other investments.
The property
Address: Unit 1, 92 Seaside Lane, Coastville, <Your State> Unit 9, 92 Seaside Lane, Coastville, <Your State>
Purchase price: $350,000 $385,000
Description: 2 bedroom strata title unit on the ground floor 2 bedroom strata title unit on the ground floor
Body corporate fee $2,500 per annum $2,500 per annum
Proposed income Permanent rental at $450 per week Holiday rental at $45,000 per annum
Agent details: Steven Allstone Steven Allstone
Phone: 8282 1113 8282 1113
Mobile: 0412 880 088 0412 880 088
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The clients
Client Tom Broad Steve Broad
Current address: Unit 12, 22 Wentworth Lane, Highville, and has lived there for eight years
23 Dury Lane Pennant Tops and has lived there with Marie for six years. Property owned in joint names.
Value $650,000 $450,000
Home phone: 9001 2121 9002 1212
Status Tom is single, no dependents Steve is married to Marie with no children
Employment PAYG and has been with the same employer for 10 years
Self-employed tradesman operating as a sole trader for 12 years
Income $85,000 per annum $65,000 per annum for Steve
Motor vehicle $60,000 $30,000 (Steve), $15,000 (Marie)
Liabilities — home loan $300,000 @ 7.2 % P & I, term 25 years $100,000 @ 7.2 % P & I, term 25 years
Liabilities — credit cards $5,000 limit cleared monthly 3% min payment $15,000 limit, $5,000 debt 3% min payment
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Assignment tasks (student to complete)
Task 1a — Identify the clients’ complex broking needs
Prepare a list of questions that you would need to ask Tom and Steve about their history and experience, and the unit purchase.
In preparing your list of questions you should ensure that you cover the following:
• The complex features of Tom’s and Steve’s situation and objectives.
• Potential risks and Tom’s and Steve’s tolerance of risk. In considering risk you should consider:
– how you would identify the risks and the criteria you used to evaluate these risks
– how you would assess their current exposure, the tools you would use in terms of probability, impact and the consequences.
(800 words)
Student response to Task 1a
Tom and Steve Broad are two brothers who want to buy two apartments jointly in a single building.
Their motive is to buy it for renting purposes. Being the financial consultant or adviser for the
brothers on the case, it is my responsibility to know everything about the brothers in a detailed
manner. It include their personal details, financial obligations and position. Also, I would be
required to gain information about their past experiences related to the procurement of the
properties, their loan obligations and all the information related to the property that they propose to
acquire.
I will not be at a position to offer any advice or opinion if it is not known if their proposition is
feasible or not, from a financial standpoint. I need to understand if they would be able to meet the
loan obligations in a timely manner or not. All this information can only be obtained by asking
suitable questions from the two brothers. It will also impart understanding on the degree of risk that
can be endured by them that is their risk tolerance.
The following is the list of questions that would I would ask the clients in regards to the proposed
investment:
I have done basic research on you and I think I have some idea about your background but I’d
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like get more understanding on your past investment experiences. Could both of you tell about
the nature of investments you were involved in the past?
What is your experience in the real estate field?
What are your expertise and skills?
What has been the status of your debt obligations and your strategies to meet them in time?
What are the areas of your working and the types of properties you usually work with, cities you
had been employed in and the number of homes that you have bought and sold in the past two
years?
It is important ask background questions first. This way they do not take a defensive positon and
prepares them for upcoming invasive questions. While searching for a new real estate property,
a well-experienced person in this field can help a lot with the help of their experience to search
for real estate. All these questions will also help in assessing their current exposure in the
business. The question about debt obligations would enquire if they are debt-free or not.
Next set of questions would aim to determine their risk-appetite?
Could you please divulge into details about your income and all the income sources?
It is an important determinant to measure the client’s risk tolerance. If the income is high, it is
more likely that the client’s risk tolerance is also high and vice versa. This is due to the fact that
small setbacks would not affect their capability and ability to invest.
What all information can you offer about your expenses and outgoings?
This question aims to determine their expenses that can highly influence their risk appetite. If
their income is high but outgoings are higher relatively, then they would not able to take high
risks. It is important to manage unnecessary expenses.
What can you tell me about financial responsibilities?
This question aims to enquire about all the individual who are financially dependent on them.
The question would probe into their marital status, their children or any other person on entity
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that are dependent on the clients.
What amount of liquid cash you have handy at present?
There must always be cash saved as savings in bank for sustaining the lifestyle and for future
financial emergencies. The clients must have sufficient liquidity so that in order to cover any
expenses in future, they don’t have to liquidate their investments.
Are you or your dependents covered under some insurance policy such as Life Insurance Cover
and Health Insurance?
The client’s risk tolerance is highly dependent on the clients’ health and all those dependent on
them. If they do not have any policy that would insure them in illness or accident, they are prone
to have a lower risk appetite.
What amount of loss (in percent) in your investment portfolio would cause personal discomfort
to you such as deprived sleep, despair or anxiety?
In order to know about the probable risks that they may face, I would ask following questions:
What were the challenges that you faced in past or predict facing in future?
What do you deem most difficult while dealing with those challenges?
What strategies you adopt to mitigate the effects of the investment risks?
If you have an investment portfolio of $100,000, and falls down to $80,000 within a month,
what would you do: Sell all the investments, Sell a part of the financial portfolio, sell nothing or
invest larger funds?
How you assume the probability of the risk and what are the impacts of those risks and how you
manage with its consequences?
The company can utilize the technique that Tom and Steve use to tolerate the risks and thus can
work on it to improve it further.
Do you develop an exit strategy for your investments?
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Assessor feedback: Resubmission required?
Competency not yet demonstrated. You appear to have misread
part of the case study or perhaps confused it with one of the
others. These are two brothers looking to purchase two residential
investment properties. They don’t need educational qualifications
in this field – they work in different professions. Please re-read
case and amend response.
Competency not yet demonstrated. You have not made sufficient
amendment to the response to demonstrate you have knowledge of
the correct questions to be asked.
No
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Task 2a —Develop complex broking options
You are required to prepare a full report for Tom and Steve by outlining the process and the risks (potential and real) of which Tom and Steve should be aware.
In a suitable format, document the process that is required for them to purchase the two units as their investment properties, establishing a joint loan in the brother’s names. You should also include a selection of lenders that will consider this style of borrowing.
In developing your report you should cover the following:
1. The parties to the loan including any opportunities or constraints that could impact on their application
2. The different options available and your recommendation of the best loan structure with the lender — are they using their own property as cross security or the cash at bank as deposit?
3. What various forms of titles could an apartment be registered in
4. A list of the lenders that are able to lend
5. The procedure to commence a loan for a property like this
6. The steps that will need to be in place
7. The client responsibilities, so Tom and Steve fully understand the loan
8. An outline as to the process and what the client needs to arrange
9. The documentation needed to commence the borrowing
10. The name in which the client will sign the contract/purchase/offer and acceptance. If a Family trust is involved what name would the title of the property be registered in, and advise what state you are using to base your answer on
11. The state revenue requirements
12. Which lenders may also require a personal guarantee from Steve’s spouse
13. The maximum LVR to the consumer
14. A summary of all fees and charges — including those for setup and those of the lender.
(800 words)
Student response to Task 2a
With the help of your previous experience, both of you would be able to purchase the two
apartments in the same building while selling off all their investments. You want only these two
apartments as a final investment as these apartments are your only investment. The opportunities
that you have is that both of you already have experience in buying and selling of property and Tom
is with a company from 10 years, whereas Steve is working as a businessman from past 12 years.
Another opportunity for you is that these apartments are in demand.
While I was looking for the ways to increase my client base, I managed to meet you two brothers,
Tom and Steve Broad as you were trying to purchase two apartments in the same building.
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However, since the building is in the most sought after area, so you will face trouble acquiring the
proposed two apartments. Another factor that would be an obstruction is the fact that there are only
12 apartments and out of them, 80 percent has permanent tenants and the rest 20 percent are booked
for a holiday rental purposes only. You would be required to send an application to the property
owner who would see that the best application gets the apartments, which is doneby references,
background verification, etc.
In order to make the process easier to understand, let me break it down into parts:
The first step would be to calculate your borrowing capability, i.e. how much can you borrow?
In the next step, all the additional charges will be determined such as deposits, legal costs,
stamp duty and insurance costs.
The best type of loan needs to be determined for your investment.
Getting pre-approval: It means that you get approved and that you fulfil all the lending criteria.
Then the buying process would start that would include making an offer, Contract of Sale,
finalising of loan and settlement. Making an offer includes exchanging contracts, paying
deposits and property valuation. Finalising the loan getting loan approval through Loan
Contracts. The day the ownership of the investment property will be taken by you is the date of
settlement. All the balance payments are required to be done on the day of settlement.
You would be required to apply for loan for the investment in the property wherein you both will be
the borrower party and there will be another lender party. The different forms of titles in which the
apartments can be registered in are freehold, Group title, Company title and Leasehold. It is
recommended that you use the investment property as the security as it is not advised to use your
existing property because the risk involved is higher. If you are not able to meet the debt obligations
or repayments, you may lose your home too. Also in the case of residential loans, you will not be
able to use you contents and motor vehicles as security. The contact/purchase/offer/acceptance will
be signed in the name of Tom and Steve Broad. If there’s a Family Trust involved then the title will
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be registered in the name of the Trust. This will protect you and your family if the trust holder dies
and the family would still be able to use the investment property. The risk of high debts would be
reduced. You are advised to open and manage a trust based on proper tax advice. It is also known as
deed of trust. It is just a way of securing the debts and it just imposes lien on a title. This
information is based on the regulations in New South Wales. You need to consider loan fees and
features such as ongoing fees, mortgage offset and home loan rates and decide which type of loan
will be suitable for you. I can help by offering all the important details about the loans so that you
make a wise decision. The process of getting investment loan starts with pre-approval. You will be
required to get a pre-approval from the lender directly. It can be also done through a mortgage
broker. There are several options available for you to take loans and some of the companies that can
provide best suitable loans are ING Direct, NAB, NAB Commercial and IMB Commercial. It
would be better for you to use cash at bank, but since it is not enough to clear your way, so you
have to take a loan from the lenders as mentioned above. Any of these lenders can borrow money
easily and they have very minimum resistance in their procedure to offer the loan. You can easily
take loan following easy steps. The steps that the receiver need to follow are only limited to take
loans following the lender’s terms and conditions and the same goes for apartments.
When you apply for pre-approval, lender makes a check of your credit record. After you get pre-
approval, the buying process will start. Making the offer is the next step. You will be required to
offer the holding deposit. Then the contract of sale will be created by an agent or the lender’s
lawyer. The offer will be outlined, date of settlement and all the conditions before the buying is
settled. At last, the offer will be finalized.
The responsibility of the client is to maintain the privacy and confidentiality. The lender will
mention this before offering the loan to you. The customer has to apply for the loan and then they
have to submit their cash details which include the bank details, details of their property’s value,
etc. After verifying all these necessary details, the lender will then offer the loan. You would be
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required to submit your bank details with another source of income and you also need to provide a
document that provides the knowledge about the people dependent on both of you. In the case of
Tom, he is single, so he is independent but in the case of Steve, he is married, but his wife is not
dependent on Steve as she has her income source. The lender has to consider all these elements
before offering the loan.
Almost every lender these days require a guarantor for the person they are offering the loan
so, in the case of Steve, the lender will need his wife who is also an independent woman to make as
a guarantor for Steve to confirm the payback of their loan.Among the earlier mentioned lenders,
NAB can ask for the guarantor. The fees are as:
Application fee of $600, facility fee is $250 pa, loan service fee is $8 pm and application Fee for
existing customers with the newloan is $300. The total cash at bank for both of you is $400,000.
The total worth of the property is $735,000. Therefore, the amount of the loan would be around
$335,000. This way your LVR would be around 45.58%. As your LVR would be less than 60%,
you will be at the minimum risk and you would not be required to pay the Lenders Mortgage
Insurance. The state revenue requirements would include stamp duty and land tax. It is also known
as land transfer duty. The office would require the proof that you are the new owners.
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Assessor feedback: Resubmission required?
Competency not fully demonstrated. As per first line of question, this is supposed to be a report from you to Tom and Steve, therefore language has to be in the first party. Please restructure your response and ensure the content covers in detail all the points covered in the question.
Competency not yet demonstrated. You have not fully addressed
the points in the Task as requested.
The report makes no mention of what amount they should borrow,
the deposit they should contribute nor the actual security required
– except a guarantor from Marie which will not be required if
loans are structured correctly.
Why would have superannuation be a constraint to the
application?
No
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Task 3a — Implement complex loan structures
Tom and Steve have accepted your recommendations and have given you authority to proceed with their application.
As part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval. Your loan submission must include the following:
• serviceability calculations
• the proposed structure of the loan given there are two brothers and there is a variance in income
• the loan amount
• the property style, size, use
• any other information that is relevant to the lenders requirements.
In additional to these requirements you should also include:
• your obligations under the NCCP (if any)
• maximum loan amount
• maximum loan terms
• any ATO consideration to be made
• your state legislation and OSR requirements
• your general advice restrictions
• property purchase requirements.
(800 words)
Note: Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
Student response to Task 3a
The objective of this application is to request for a loan for pre-approval. I would request you to
provide a loan amount of $335,000 to purchase two apartments. As this area is in demand and the
apartments are costly, we would require the loan amount. We already have experience in buying
and selling of property, so we had already sold out our all other properties and these apartments are
our only investment as of now. We require this loan under the name of Tom and Steve Broad. The
reason we would like to purchase this property is that it can be used either for permanent residential
purpose or holiday’s purpose. The building policies do not allow any other use of these apartments.
This letter provides the information of the client applying for the loan. The name of the client is
Tom Broad, who with his co-borrower Steve Broad are applying for a loan. Their income source
differs from each other as Tom is with his employer for almost ten years. He is single at present and
has no dependents. His details are as follows:
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Income is $85,000 per annum
Cash at the bank is $250,000
Superannuation of $150,000
Contents of $100,000
Motor vehicle $60,000
Liabilities — home loan $300,000 @ 7.2 % P & I, term 25 years
Competency not yet demonstrated. This is supposed to be a full
submission to lender recommending approval. The work
completed covers part of requirement but does not:
- cover serviceability fully
- set out what funds to be utilised by clients and how loan amount
was derived
- set out what security is to be taken and how it will be structured
Additionally please explain why you are joining Marie in loan.
Competency not demonstrated. Your response here suggests you
do not have the knowledge to present a proposal to a lender.
While you detailed information you have not –
- completed any analysis of serviceability
- demonstrated any knowledge of what the appropriate security is
– lenders do not take security over contents and motor vehicle to
secure residential loans
No
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Case study B— Ray Murdoch and Steve Brown
Only complete Tasks 1–3 for one (1) of the case studies in Section 1
Background
You have just met with Ray Murdoch and Steve Brown, referred to you by another commercial client.
Ray Murdoch and Steve Brown jointly own a successful and growing business that manufactures metal pallets. They trade under the name Pallets-R-Us Pty Ltd. The pallets are manufactured using material that is lightweight and durable. There has also been a very structured approach to the research and development for the engineering and design of the pallets. The pallets are used in all industry sectors. Part of the process involves powder coating the finished product, which is currently outsourced to a local well-established contractor.
It is critical that Ray and Steve’s product meets market needs. They need to maintain sustainable production and operating costs if they are to forecast their sales and cost of sales.
They have a well-established client database that provides them with repeat ‘business to business’ dealings. Whilst they have only been trading for 26 months they have a solid business plan with written supply contracts with three major business clients and several smaller business clients.
Ray and Steve now require a loan to assist them with the purchase of a sophisticated machine, using the technical platform system CNC. This machine can be programmed to rapidly fabricate multiple components. The machine has an expected commercial lifespan of at least 15 years with operating software to be updated every three years. This software and upgrades is included in the purchase price of $800,000.They need to import the machine from the US. Initial enquiries with the US supplier have indicated that they will require a letter of credit for the import of the machine.
Their business employs five people and, with the expected increase in business through the automation of production, they have forecast that they will need to recruit an additional two staff members in the next 3–6 months to meet sales/production demands.
Steve has been in the metal fabrication field all his working life. He has an MBA and understands financial management. He also has solid engineering skills and developed the majority of the design works for the business. He is married and has no dependants. His wife is a school teacher and she will be retiring at the end of the year.
Ray worked with Steve at ‘Protech’ as a foreman. His skills are in production and managing project/job flow. He has high level technical skills and can complete works to specification at a high standard. Ray is divorced.
Steve and Ray have provided the last two year’s financial accounts for the trading business, as well as interim accounts for the current financial year.
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Applicant information
Client Ray Murdoch Steve Brown
Current address: Unit 43, 25 High St Northville, <Your State>and has lived there for six years
23 Desmond Lane Northville, <Your State> and has lived there with Kate for seven years. They own property jointly.
Value $750,000 $900,000
Home phone: 9001 2121 9002 1212
Status Ray is divorced with no dependent age children Steve is married with no dependents
Employment Self-employed business owner Self-employed business owner
Income $100,000 per annum $100,000
Property $750,000 $900,000
Cash at bank $12,500 $9,600
Contents $100,000 $85,000
Superannuation $250,000 Steve $350,000, Kate $60,000
Motor vehicle $40,000 $55,000
Home loan $250,000 @7.2% P & I Term 18 years $350,000 @7.2% P & I Term 22 years
Credit card $25,000 limit with debt of $15,000 payment @3% $10,000 limit with debt of $3,000 payment @3%
Car loan $0 $15,000 payment @ 9% payable 4 years
The business
Year 1 net profit after tax $200,000
Year 2 net profit after tax $220,000
Current year interim profit (10 months trading) $200,000
Wages to partner 1 – years 1 and 2 $100,000
Wages to partner 2 – years 1 and 2 $100,000
Dividend to private investor (flat profit fee) – years 1 and 2 $45,000
Key balance sheet items
Cash $25,000
Debtors $220,000
Creditors $100,000
Notes The business currently meets all creditor payments at 30-day terms.
Debtor collection has been solid. They invoice an upfront payment of 50% of the sale price, which assists in funding their production.
They have orders of $1m over the next 3 months and have made an increase in their gross profit margin.
The orders are from several clients, so their debtors will be well spread.
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Task 1b — Identify the clients’ complex broking needs
Prepare a list of questions that you would need to ask Ray and Steve about the proposed transaction.
Calculate the required servicing for the new debt, and the lender comfort surplus.
Outline the process and the risks (potential and real) of which Steve and Ray should be aware.
(800 words)
Student response to Task 1b
Answer here
Assessor feedback: Resubmission required?
No
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Task 2b —Develop complex broking options
You are required to prepare a full report for Ray and Steve by outlining the process and the risks (potential and real) of which Ray and Steve should be aware.
In a suitable format, document the process that is required for Steve and Ray to obtain appropriate finance for their equipment and set up the loan.
In developing your report you should cover the following:
1. The parties to the loan
2. The product type you would recommend, including an appropriate term, interest rate and residual (if any)
3. The framework and contents of the letter of credit requirements
4. A list of the lenders that are able to lend
5. The procedure to commence a loan
6. The steps that will need to be in place
7. The client responsibilities, so Steve and Ray fully understand the loan
8. An outline as to the process and what the client needs to arrange
9. The documentation needed to commence the borrowing
10. The name in which the client will sign the contract to purchase
11. A statement of those lenders who may also require a personal guarantee from the borrower’s spouse
12. A summary of all fees and charges — including those for setup and those of the lender.
(800 words)
Student response to Task 2b
Answer here
Assessor feedback: Resubmission required?
No
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Task 3b — Implement complex loan structures
Ray and Steve have accepted your recommendations and have given you authority to proceed with their application.
As part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-approval. Your loan submission must include the following:
• serviceability calculations, including all borrowing facilities of Directors
• the proposed structure of the loan
• the loan amount
• the property style, size, use
• any other information that is relevant to the lenders requirements.
In additional to these requirements you should also include:
• your obligations under the NCCP (if any)
• maximum loan amount
• maximum loan terms
• any ATO consideration to be made
• your state legislation and OSR requirements
• your general advice restrictions
(800 words)
Note:Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
Student response to Task 3b
Answer here
Assessor feedback: Resubmission required?
No
Page 32 of 71
Case Study C — Bill Smith and John Jones
Only complete Tasks 1–3 for one (1) of the case studies in Section 1
Background
You are meeting with prospective clients, Bill Smith and John Jones. They have been referred to you by their accounting firm, Buckland Accountants.
The prospective clients need assistance with the acquisition of owner-occupied premises to replace their current business premises which is rented and becoming too small for their growing business.
True Blue Pty Ltd trades as True Blue Real Estate and was purchased as an existing real estate business three years ago. Bill Smith and John Jones are the directors.
The shareholders of True Blue Pty Ltd are Bill Smith, John Jones and a private investor, Amanda Williams, who does not work in the business and has no involvement in its day-to-day operation. Each holds an equal one-third share in the company.
Bill and John have each been in real estate for approximately 15 years, focusing on residential sales and leasing. They have gained their work experience in the local area. A wealth of knowledge of the area, coupled with an ever-expanding client base, has resulted in sustained and solid growth for the business.
Details of the property
Sale price of the property is $950,000. (There is no GST requirement as it is being purchased as a going concern.)
A deposit of $95,000 has been paid and is being held in the trust account of the settlement agent/solicitor.
A cash contribution of $233,240 will be made from the general working account of the business.
Property purchase and loan to be in the name of a new entity — True Blue Pty Ltd as trustees for the Smith Jones Unit Trust. There are a total of 99 units in the trust and the unit holdings mirror the shareholding of the trading entity, True Blue Pty Ltd.
The property is situated at 100 Smith St, Yourtown, with contracts exchanged at today’s date and an anticipated settlement date of 90 days.
General observations about the property
The property is in good condition and is well located in the same street as the current rental premises. It is anticipated that the premises will meet the needs of the business for the next 10 years.
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Summary of initial client fact find
Bill and John have provided the last two years’ financial accounts for the trading business, as well as interim accounts for 10 months of the current financial year.
True Blue Real Estate’s financial accounts
Year 1 Year 2
Net profit after tax $92,000 $140,060
Current year projected- $175,000
Add back (rent) $47,000 $49,142
Additional superannuation to director $31,400 $34,539
Wages to partner one $70,640 $70,640
Wages to partner two $70,640 $70,640
Payment to private investor (fixed flat profit fee) $45,000 $45,000
Applicant information — Bill Smith
Personal details
Address 26 Nowry Road, Yourtown, 1234
Date of birth 17 February 1958
Phone 7890 1234
Financial details
Gross income $70,640
Owner occupied property valued at $550,000
Outstanding debt on owner-occupied property $210,000 @ 6.2% p.a. on a principal and interest basis
Credit card with limit $15,000 Outstanding debt — $5,000
Superannuation $250,000
Motor vehicle valued at $30,000 (nil debt)
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Applicant information — John Jones
Personal details
Address 14 Mary Street, Yourtown, 1234
Date of birth 14 October 1970
Phone 0146234577
Financial details
Gross income $70,640
Owner occupied property valued at $750,000
Outstanding debt on owner occupied property $300,000 @ 7.2% p.a. on a principal and interest basis
Outstanding debt on motor vehicle $15,000 (Assume five year term at 9%p.a. interest)
Business details
Cash in business account $400,000
Other information
Applicants’ solicitor Moffat and Co (contact is Maree Moffat)
16 Tatlor Street, Yourtown, 1234
Phone 7890 5678
Applicants’ accountant and registered office Buckland Accountants (contact is Simon Williams)
28 Mary Street, Yourtown, 1234
Phone 2982 0987
Applicants’ banker Westcoal Building Society, Yourtown, 1234
Notes:
• Assumefor credit card debts, the minimum monthly commitment should be calculated at 3% of the credit limit.
• Each of the working directors has appropriate death, income and disability insurance in place.
• A sensitisation factor of 2% should be used when calculating financial commitments.
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Assignment tasks (student to complete)
Task 1c — Identify the clients’ complex broking needs
Prepare a list of questions that you would need to ask Bill and John about their history, experience, business performance and the property purchase.
In preparing your list of questions you should ensure that you cover the following:
• The complex features of Bill’s and John’s situation and objectives.
• Potential risks and Bill’s and John’s tolerance of risk. In considering risk you should consider:
– How you would identify the risks and the criteria you used to evaluate these risks
– How you would assess their current exposure, the tools you would use in terms of probability, impact and the consequences.
(800 words)
Student response to Task 1c
Assessor feedback: Resubmission required?
Yes
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Task 2c — Prepare complex broking options
You are required to prepare a full report for Bill and John by outlining the process and the risks (potential and real) of which Bill and John should be aware.
In a suitable format, document the process that is required for them purchase the new property and establishing the loan.
In developing your report you should cover the following:
1. The parties to the loan
2. The best physical set up with the lender — are they using their own property as cross security or the investment property?
3. What name should the title be registered in given there is a Trust involved and advise what state you are basing your answer in
4. The procedure to commence a loan for a property like this
5. The steps that will need to be in place
6. The client responsibilities (Bill and John should fully understand the loan that is proposed)
7. An outline as to the lending process and what the client needs to arrange
8. The documentation needed to commence the borrowing
9. The name in which the client will sign the contract to purchase
10. The state revenue requirements
11. A statement as to whether guarantees from spouse’s or any other security will be required and why this is/is not the case
12. The maximum LVR
13. Suggest three (3) lenders to client’s that would be likely to consider this request
14. A summary of fees and charges — including those for setup and those of the lender.
Note: You may make any reasonable assumptions necessary in order to complete the proposal.
(800 words)
Student response to Task 2c
Assessor feedback: Resubmission required?
Yes
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Task 3c — Implement complex loan structures
Bill and John have accepted your recommendations and have given you authority to proceed with their application.
As part of implementing their loan application you are required to prepare a formal written loan submission to the lender for pre-
• the proposed structure of the loan given the purchases is in the name of a new Unit Trust entity
• the loan amount
• the property style, size, use
• proposed security
• any other information that is relevant to the lenders requirements.
In additional to these requirements you should also include:
• your obligations under the NCCP (if any)
• maximum loan amount
• maximum loan terms
• any ATO consideration to be made
• your state legislation and OSR requirements
• restrictions on overseas purchase, if any
• your general advice restrictions
• property purchase requirements.
Notes:
• Any assumptions you make should be listed, and not be in conflict with the case study information already provided.
• You will need to calculate and include your workings of the required servicing and debt service cover ratio for the new debt and existing borrowings of Directors. Comment on the DSCR comfort level for lender.
• You may make any reasonable assumptions necessary in order to complete the proposal.
Student response to Task 3c
Assessor feedback: Resubmission required?
Yes
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Section 2: Business management skills
Task4 — Developing and nurturing relationships with clients, other professionals and third party referrers
George and Mildred now require you to write a plan to assist in developing and nurturing relationships with clients, other professionals and third party referrers.
Your plan should address the following:
1. How CCF & MB’s policies and procedures and legislative, regulatory and professional codes of practice impact on developing and nurturing relationships
2. How you would use CCF & MB’s social, business and ethical standards to develop and maintain positive relationships
3. The importance of confidentiality and how you would maintain it in your dealings with colleagues, clients and other parties
4. How you would adjust your Interpersonal style to the needs and situation of other parties
5. How you would go about developing and maintaining business and professional networks and other relationships to benefit the organisation, and how you would use them to identify and cultivate relationships in order to promote and market the organisation
6. How you could use and cooperate with other professionals and third parties to expand and enhance the reputation of the organisation, and to identify new and improved business practices
7. How you would build referral business through appropriate communication channels to find and secure new business relationships
8. How you would identify referral needs and provide information p about CCF & MB’s relevant products and services
9. How you would secure interviews with referral business so that then needs of clients can be met.
(1,000 words)
You may use any format for your plan but it must address each of the points above. If you are unsure as to how to write a plan, you can refer to the Business Growth and Marketing topic and use the suggested SMEAC format outlined in Part 5, Section 12.
When completing this task, assumptions are permitted although they must not be in conflict with the information provided in the background information.
Student response to Task 4
Task 4 — developing and nurturing relationships with clients, other professionals and third
party referrers
The quality of client relationship plays a major role in making any business successful. It is like the
good friendship which builds understating and rapport between parties. It takes regular and clear
communication to the clients to achieve such effective relationship. Building such clear
relationships with clients involves investing effort and time into understanding or accepting the
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client’s business and condition. However it is a time taking process. Establishing and then retaining
such client relationship is simply a cost-effective practice which contributes in improving efficiency
and productivity. A plan is required to develop and nurture relationship with clients or other
professional in order to take the business to new heights.
The plan mainly focuses on building and sustaining rewarding and effective relationship with all
the professionals related to this industry. There are certain official or legal requirements under CCF
and MB’s policies which are included in the plan of building good client relationship. The legal
procedure requires clear documentation which reduces the chance of any misunderstanding between
people of the company and clients. The documentation has significant role in building and
maintaining a healthy relationship. We, through letter of acceptance, intend to sign enforceable
contract with clients so they that they can come to know about the company’s terms and policies
and feel secure about any deception. The policies of CCF and MB help the client. We provide the
range of solutions for their queries.
We will strive for deal with our client with full of integrity, professionalism and competency.
Providing unbiased advice to the client is one of the business ethical behaviour of CCF and MB
thereby we will provide the best possible suggestions regarding the business. Focusing on meeting
the expectations of the client would be the fundamental agenda under the plan of building an
effective relationship with client. Every business dealing with the client would be free from conflict
of interest. The opinions of the clients will be listened carefully. With every new client, we will take
the session to educate them about all mortgage sector regulations. CCF and MB’s fundamental
values like honesty and integrity would surely encourage the client to engage with the company.
This is kind of business which requires confidentiality. As this industry is highly competitive,
the role of confidentiality is very essential. If, any organization is failed to properly protect and
secure business information then it can affect business and client relationship adversely.
Every business dealings require confidentiality. Here, also, there are certain information which
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are needed to keep confidential if not or in wrong hands then these information or data can be
misrepresented or misused in illegal activities such as fraud and discrimination. Lack of
confidentially in the business may lead to undesirable outcomes of the business. The disclosure of
information of company or its clients which are sensitive or should not be opened may result in loss
of client trust, loyalty and confidence. This always ended up as loss of efficiency and productivity.
Therefore, our plan fully focuses on the best practices of strengthen the confidentiality in dealing
with the clients. In the official manner, we will share the legal agreement with client in which both
will give the assurance of live up on the words that each other’s sensitive information would not be
disclosed in any circumstances. Also in other way, through casual meeting, we will share our past
experience and show our responsibility and integrity towards confidentiality. We would not talk
about the sensitive information about client and their cases in front of other people. In the same way
the company’s confidentiality can be maintained. We will keep the company’s and clients file in the
safe which could be accessible for some selected people in of the company. In the official meetings
with the clients, we will demand and share relevant files and documents only so that the risk of
disclosure of sensitive information can be minimized. The information either of company or client
would not be told to anyone has nothing to do with the business. We will avoid any risk which can
turn into loss of trust and loyalty from clients. As protecting confidential data of information of
company and their clients is core component of company’s ethical behaviour, we would keep it
confidential and maintain healthy relationship of trust and loyalty with clients.
We believe in adjusting to the needs and the situations of the clients. If the client is not
comfortable discussing deals through telephonic conversations, we would set personal meeting with
the clients. As we said our plan is totally focused on fulfilling client’s expectations and
requirements so we would not take a step back when there will need to adjust our workflow.
However, we would never hamper the company’s policies in the sake of client’s satisfactions.
Clients comes with lots of hope, so it is our responsibly to live on their expectations. For this, we
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will ask the client about him/her time and place in which he/she is comfortable to sign a deal. We
will also consider clients’ opinions and according to it will make changes in the work schedule if
needed. Our interpersonal styles and techniques involve:
Appropriate methods for communicating information and ideas to the clients.
Seeking response from the internal and external sources for developing and refining
approaches and ideas.
Treating clients’ empathy, respect and integrity.
Soft-sell methods
Hard-sell methods
Education and information
Negotiation and persuasion
Our professional and business network may connect with:
Land title offices, construction and building professionals
Planning consultants, quantity surveyors and surveyors
Our referral network can include:
Relatives and friends
Past clients
Recommendations from the clients
Franchise referrals and recommendations
Developed networks
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In order to develop and maintain business and professional networks, we would make use of
appropriate channels for communications. These channels include advertisements, community
events, seminars, face-to-face meetings, mail drops and electronic technology. Business and
professional networking is one of the effective and cost efficient marketing procedures to expand
business. Building professional networks provides the opportunities to make profits. We would go
for contacting the people through referrals and convert them into clients in order to save time and
money. We would also go for other traditional methods of approaching people such as email,
phone, email, social media and business websites. We will optimize company’s promotional
activities in order to company visible to people. We will attend various business events in order to
get noticed by people in the industry which helps the company in building professional network and
increasing opportunities.
In order to enhance the reputation of the company, firstly, we will get the opportunities such as
client’s leads and joint ventures and involve them in company’s vision and mission. The
accumulated knowledge from the professionals and the third parties would lead to satisfied
customers which would definitely enhance the company’s reputation. It would also us to expand
and explore the markets and increase our popularity with new services. Our cooperation and
relationship would be based on self-analysis, chemistry and compatibility.
We would set the target of referrals and with the help of old clients and through social media or
email referral strategies we would be able to secure new business relationship. Whenever there will
be need of professional network or expanding business through internal workforce in the company
then we would go for referrals. We will take the referrals from the old clients. We will provide the
company’s information through those old clients only because they can easily educate their
colleagues about company’s policies and procedures.
We will identify the vacancies and would select best of referred people for interview. Initially we
will inform our referring clients about company’s need so that they can refer such people from
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whom the needs of the clients can be met.
Assessor feedback: Resubmission required?
Competency not yet demonstrated. You have covered off some of
the points in Task but you have not really addressed which other
professional people you would like to network with for mutual
business development. Think of a referral network as not just
coming from existing clients but those other professionals you deal
with. Your further comments should focus on points 4, 5, 6
highlighted above. You might also refer to the SMEAC example
for guidance as to how this response should be presented.
Competency now demonstrated.
No
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Task5 —Growing the business
Having considered how you would go about building and nurturing relationships, George and Mildred now require you to turn your attention to marketing and promoting CCF & MB’s business. This requires you to develop a marketing plan for the business.
In developing your marketing plan you should consider the following:
1. Your plan should be developed in line with CCF & MB’s vision statement
2. The identification of target markets using a combination of research and your own personal experience
3. The identification of your major competitors (at least two) with a competitor analysis developed for each competitor
4. The identification of CCF & MB’s market position based on your research findings and analysis
5. How you would promote CCF & MB’s brand and the tools you would use to achieve this
6. The provision of options for increasing yield per existing client
7. How you would implement your plan and monitor it to ensure objectives/goals/performance indicators are being met
8. How you would adjust your plan if required.
(1,000 words)
You may use any format for your plan but it must address each of the points above. If you are unsure as to how to write a plan, you can refer to the Business Growth and Marketing topic and use the suggested SMEAC format outlined in Part 5, Section 12.
When completing this task, assumptions are permitted although they must not be in conflict with the information provided in the background information.
Student response to Task 5
Task 5 — growing the business
Developing a plan for marketing is the fundamental requirement of every small, middle and large
business organization. A marketing plan in the form of a business document outlines the company’s
marketing strategy. Marketing plan static process it keeps on changing according to the demand of
the company. Like every other company, we will make a marketing plan for CCF and MB in order
to increase brand awareness among people.
Our marketing plan consists of several components. The first component of our market plan is
‘understand the customers’. First, the company will have to identify the customers or the people
who are looking for the services we provide. The vision statement of CCF and MB is to be the
mortgage and finance broker of choice in the greater metropolitan area. The vision statement
indicates the objective of the company. So the company will has to promote themselves in
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metropolitan area where the scope of getting clients is very high. The company will has to evaluate
demand from the customers.
This marketing plan will allow company to target services to the ideal customers who most
likely to avail the services. The ideal customers of this company are person seeking loan, individual
requiring finance for business start-up, person who have personal finance requirement. And the
scope of getting these kinds of customers is very high in the metropolitan cities.
After understanding the customers, the plan involves analysing the market in terms of scope of
this business in that particular area. The analysis will involve researching on past data about how
much persons look for mortgage and finance every year, how many new start-ups have opened in
last few years with help of mortgage age and finance broker. This will help company in evaluating
the scope of the business in that particular metropolitan area.
The next in the marketing plan is to analyse the competition in the market. Identification of the
competitors is very important to make any business sustainable in the market because every new
company that comes in the market have to analyse the approaches and tactics of other company
present in the market. Australian finance group is one of the major competitors of CCF & MB in
mortgage and finance broking market. AFG is one of the leading firms in the mortgage and finance
broking market which have been offered home loans to thousands of their customers. AFG offers its
finance services at reasonable price. AFG has built a healthy relationship with their clients. It now
provides insurance products, commercial finance, and securitised products of AFG. In order to give
tough completion to AFG, CCF & MB will have to offer services at low price and with more
authenticity. The second name in this competition could be Mortgage Choice which is also a well-
known mortgage broker. However, it is not too old firm but CCF and MB will have to analyse the
marketing tactics that Mortgage choice implements.
The market plan is also involves determining the market position of the company. As CCF and
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MB is a new company in this market so it is too early to say about its market position. The market
plan that we have set is expected help CCF & MB in reaching good position in the market.
We will use content marketing to promote CCF and MB. Content marketing involves
encouraging customers to avail the services through slogans showing company’s quality of services.
We will also use social media to promote brand. By generating referrals we would be able to get
visible by people. With the typical mortgage and fiancé services we will provide the educational
structure which will help the company in making reputation in the market. There are various other
tools which we would use to promote brand such as testimonials, email marketing, digital
marketing and promotional programs and events. We will set the budget in which all the
promotional activities would be covered.
Implementation of the plan starts with the reviewing the all the steps involves in the marketing
plan. Execution of market planning requires team of experts and adequate resources which CCF and
MB already has. A session with the marketing will be held in order to readdress them about
objective and goals which the company is trying to achieve. A separate team would be assigned for
each component of the marketing plan. For example, one team will analyse the market situation,
one team will analyse the competitors activities and so on. Simultaneously, one team will be
focusing on building relationship with clients, agents and professionals and also generating
referrals.
Once the plan is implemented next is to monitor the same. In monitoring the plan, we will track
the advertising campaign and other promotional activities associated with marketing plan. We
would be focusing on determining whether the plan is on target or not. We would be tracking how
many new clients we are approaching in every week or month or how many real estate agents we
have approached since the plan started. We would also check whether our marketing budget on
track or not. We would be monitoring the best practices we have implemented to analyse market
situation and activities of competitors. We would also be checking for any failure of the market
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strategy.
We would make adjustments in the marketing plan when needed. By staying beware of changes in
market condition, technology, competition, clients, customers, and other factors, we would easily
be able to adjust our plan. We would refine the marketing objectives. However, the vision statement
will be remained same. Either by increasing or decreasing time and budget for the plan, we would
make adjustments in the making plan.
Action Plan for the company:
Month Activities Deadline Responsible
January Understanding customer base 31/1 Senior manager
(Marketing
Department)
January Analysis of the market to find out the
scope of the business
31/1 Product Manager
February Analysis of the competition in the market
and the market position of the company
15/2 Sales manager
March Content marketing to promote CCF and
MB
30/3 Head of Marketing &
Distribution
April Implementation of the plan 30/4 Marketing team
May Monitoring the progress and the
effectiveness of the plan
Continuous
process
Head of Marketing &
Distribution
Assessor feedback: Resubmission required?
Competency not yet demonstrated. Some good work but you need
to actually develop an Action Plan for all to follow. Please take the
points you have made above and produce a short Action Plan
covering ―the activity‖, ―By who‖ and By when‖.
Competency now demonstrated.
No
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Task6 — Identifying risk and applying risk management processes
George and Mildred have become very concerned about the potential risks that could jeopardise CCF & MB’s business operations. They were very impressed with your growth and marketing plans for CCF & MB so they have now moved you into more of a general manager’s role with expanded responsibilities, including managing CCF & MB’s risk. As part of your new responsibilities you are required to develop a risk management plan.
In producing this plan you are required to:
1. Establish the context for CCF & MB’s risk management plan
2. List and explain the tools you will use in assessing the risks you identify
3. Identify the stakeholders you would consult in establishing context and the tools you would use in identifying CCF & MB’s risks
4. Identify at least two risks that CCF & MB could face for each of the six categories of business risk including strategic risks, compliance risks, financial risk, operational risks, market and environmental risks and reputational risks with an appropriate risk statement for each identified risk
5. Conduct a risk analysis and risk evaluation for the risks you have identified
6. Identify treatments for them
7. How you will monitor and review them in your risk management plan.
When you are defining the risk criteria you intend to use you are required to create your own risk matrix to address likelihood and consequence.
Document your risk treatment plan using a risk register.
You may make any assumptions in producing your plan but these should be documented either in the body of your plan or separately before you produce it.
(1,000 words)
Student response to Task 6
Task 6 — identifying risk and applying risk management processes
Making a risk management plan helps in preventing issues from developing. A risk management
plan simply deals with measuring the probability of problems which can occur any time during the
given project. It is also tells about the impact of that issue on the project. Mortgage and finance
broking business is always carrying certain risks in the functions of organizations. And, managing
those risks is very important task for the managers in the company. Thereby, there is a need of
developing a risk management plan so that the risks can be avoided and managed effectively.
Similarly, this is the aim of the developing risk management plan. The degree and types of risks for
CCF and MB are dependent on a variety of factors like complexity, volume, size and business
activities. The identified risks for the company that are critical have been mentioned below:
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Strategic risk
Market risk
Reputational risk
Operational risk
Compliance risk
Credit risk
The methodologies and tools that would be used during different phases of the management of
risk are described:
Assessment of risk probability and its impact: It would investigate the probability of each
risk occurring and its potential impact on the company’s objective like performance, cost
and schedule.
Probability & Impact Matrix: The matrix would be used to rate risks in order to do more
quantitative analysis.
Risk Categorization: In this, those aspects of the company’s objectives would be determined
that are exposed to the risks to a higher degree.
Risk urgency: In this assessment, the risk ranking obtained from the probability & impact
matrix would be used to gain a rating of risk sensitivity.
The other common tools that would be helpful in the assessment of risks are root cause analysis,
SWOT analysis, cost analysis and expert judgement.
The key stakeholders that are responsible for the level of risk of the company are senior
management and the Board. Their approval is necessary for the operation of any business policy or
strategy. The directors of the company understand the nature and type of risks that surrounds the
organization. They are generally responsible for taking effective steps for measuring, monitoring
and controlling the risks. The board would be consulted get guidance on the exposure level that is
acceptable by the company in relation to the risks identified. Also, they would help in the risk
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management by ensuring that the risk management process is in line with the company’s policies.
The senior managers would offer knowledge of all the activities that the company conducts which is
the most important part of the risk management plan. They would help in offering understanding on
the subject of internal controls that are required for limiting the identified risks.
The risks associated with the strategic risks are:
Innovation risk: In this risk, a company fails to innovate or invest in unsuccessful innovation
investments. A company might not be able to institute the innovation culture.
Marketing and Sales risk: In this risk, the metrics and forecasts obtained through marketing
and sales strategy proves to be unsuccessful.
The risks associated with the compliance risks are:
Social responsibility: The business activities of a company can harm the well-being of the
people or the workers in the community in which the company operates.
Process Risk: In this risk, the processes of a company fail that results in certain legal
violations like failing to meet the customers’ responsibilities. It also results in accounting or
reporting errors.
The risks associated with the financial risks are:
Credit risk: It arises when a party fails to realize its financial obligations towards other party.
Liquidity risk: When a company is not able to execute the transactions, liquidity risks arises.
It involves assets and securities that remain unsellable in the market when there is need of
money.
The risks associated with the operational risks are:
Fraud: This risks arises in the absence of an efficient audit programme and leads to great
operational losses. This can be of both internal and external type.
Execution, Delivery and Process Management: In the absence of an effective delivery,
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execution and a process management can cause this type of risk.
The risks associated with the market and environmental risks are:
Interest-rate risk: This risk leads to the decrease in the value of the securities due to the
increase in the interest rates.
Commodity price risk: This risk arises due to the unanticipated changes in the prices of the
commodities such as land or real estate.
The risks associated with the reputational risks are:
Reputation-reality gap: This type of risk arises when there is a large gap between the
behaviour or character of the company and its reputation in the market.
Changing expectations and beliefs: This type of risk arises when the expectation and beliefs
of the shareholders keep on changing but the character of the company remains the same.
Risk statement for the risks are:
Financial risk: If there is an economic crisis then the demand for property will decrease
would be bad for the business of the company and thus there is a need of intervention and
prevention activities.
Strategic risk: If the strategies of CCF and MB are not designed to tackle the risks that
threaten the company then the company would to be able to achieve its predetermined
business plan objectives and aims. Therefore, the company needs to come up with an
effective strategy for the risk assessment and prevention.
The analysis of the financial risks involves three steps. The first step involves comprehending
the concepts of the risk and how the activities of the business applies to the financial matters of the
company. In the next step, the tolerance of the company in relation to the risk would be evaluated.
The amount of volatility that the company can absorb would also be explored. The investment
required would also be observed based on the future expectations and past experiences. In the final
step, the ability of the company to absorb the loss or change in its financial circumstances due to the
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investment would be determined. The analysis of the strategic risks would start by identifying the
business objectives and strategy. In the next step, all the risks would be identified that can cause
variability in the performance such as customer demand in future. Then, Key Risk Indicators (KRI)
would be established to predict the potential roadblocks. By monitoring the KRIs, the analysis of
the strategic risks would be done.
The treatments that could be employed to mitigate the losses due to the risks mentioned above
are:
Avoidance: This is the treatment that avoids the risks by steering clear of the actions that
increases the chances or attracts risks. It involves avoiding the business activities that may
impact the risk tolerance of the company.
Transfer: If any business activity of the company is leading to adversely impact the
performance of the company, then the company can transfer the risk or a part of it to some
third party. The two techniques to transfer the risks are outsourcing and insurance.
Proactive context: CCF and MB needs to integrate the risk management plan into the
management system successfully. In this way, whenever a decision would be made by the
management, the risk attracted by it would be inside the risk criteria of the company.
Reactive context: In this context, the company would look at the risk generated by the
business decisions and their implementation retrospectively. Therefore, any risk treatment
that is employed by the company will have a remedial nature.
In order to monitor and review the usefulness of the risk management plan, there is need of
establishing benchmark information and standards. These benchmark information and standards
will be included in the risk management plan. The standards are required to be in line with the
company’s goals and regulations. If appropriate standards are formulated, then an evaluation
process can be used to measure the risk management plan. It would also to measure the actual
performance of the company against the pre-determined standards. The other way to review the
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success of the risk management plan is to review the results. The treatments needs to show positive
changes in the results. The tools that are used for the evaluation need to be flexible just as the risk
mitigation activities are.
Risk Determination
Likelihood
1 Unlikely
2 Remote
3 Occasional
4 Moderate
5 Frequent
Severity
1 Negligible
2 Marginal
3 Serious
4 Very Serious
5 Critical
Hazard Identification
Risk Evaluation
Risk Control
S/N Work activity Hazard Existing
Risk Contr
ol
Severity
Likelihood
Additional Risk Control Measures
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1
Innovation risk Regular failures on developing new financial products
N/A 1 4 Create a model for judging return and risk.
2 Marketing and Sales risk
The sales of the company are not as forecasted or anticipated. N/A 1 3
Managing value chain, value network. Benchmarking and SWOT
3 Social Responsibility
Damage to the credibility and reputation of the company N/A 3 1
Development of a dynamic Corporate social responsibility program (CSR)
4 Process Risk
Failure to meet the partners or customer responsibilities N/A 1 3
Prepare a system to regulate the different processes within the organization.
5 Credit Risk Impacts the profitability of the organization N/A 3 1
Monitoring the relationship with the clients
6 Liquidity Risk Shortage of capital when required N/A 3 3
Cash-flow forecasting, liquidity buffer and financing facilities
7 Fraud Disproportionate large losses N/A 1 3
Development of work environment of respect and trust among the employees
8
Execution,
Delivery and
Process
Management
The organization fails operationally and incur losses N/A 2 3 Effective management system
9 Interest rate risk
Lower competitive returns, profitability, market value N/A 3 2
Repricing profiles, Sensitivity analysis
10 Commodity price
risk Reduction in the profit margin N/A 1 2
Manage the risk through pricing and contracts
11 Reputation reality gap
Failing to deliver the expected value N/A 2 4
Transfer, Avoid, Manage and Mitigate
12
Changing
expectations and
beliefs
Disagreement between the top management members N/A 2 1
Create a distinct plan of operation and company's mission and values
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Assessor feedback: Resubmission required?
Competency not yet demonstrated. Point 4 requires you to come
uop with two strategies for each of the 6 Risk categories – you have
not done this. Point 5 requires you to complete a Risk analysis and
evaluation –this should be in the form of a matrix as per example n
learning materials.
Competency now demonstrated.
No
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Task 7— Improving the business
Over the last few months business for CCF & MB has been very good with a number of new clients coming on board as a result of implementing your business growth and marketing plans. However neither you or the business owners are satisfied with maintaining the status quo; as you and they are committed to a program of continuous improvement.
You all feel that CCF & MB’s competitive advantage needs to be strengthened and a SWOT should be undertaken to establish CCF & MB’s strengths and weaknesses including benchmarking the business against the industry. You now decide that you will carry out a diagnosis of the business including a SWOT analysis and a benchmarking exercise to improve CCF &MB’s competitive advantage and its business. You are to produce a document covering your diagnosis which will be distributed amongst CCF & MB’s key personnel.
As a minimum your document should cover the following:
1. The data you have used as part of your diagnosis to identify CCF & MB’s competitive advantage
2. A SWOT analysis to identify CCF & MB’s strengths and weaknesses, its threats and opportunities
3. How you identified and sourced relevant benchmarking data
4. How you selected the key indicators (and who you consulted with) for your benchmarking exercise
5. A consolidated list of the areas for improvement you have identified with a cost-benefit ratio established for each of them
6. Recommendations on the changes that may be required that will affect existing workflows or CCF & MB’s organisational structure
7. A high-level action plan that will implement and monitor the recommended changes to be made.
(1,000 words)
In addition to the material on your Subject 2 learning guides the following links give you access to a step-by-step guide to benchmarking and determining competitive advantage:
external analysis of the company helped in the determination of the factors that gave CCF and MG
a competitive advantage over its competitors. The internal analysis focused on the resources of the
company such as sales, profitability, overall brand and products analysis. The external analysis
focused on the threats and opportunities that existed in the market environment of the company.
The SWOT analysis of CCF and MG:
Strength: The strengths of the company are its low interest rates and marketing efforts. Due to the
low interest rates, the company has a cost advantage. The company has a team of highly skilled
consultant that guide the management through all important business decisions. The company has a
range of financial products that are offered to its customers. The company has higher gross margins
than its competitors. The company has effectively established itself in the market due to which the
set-up costs for the new products is very low.
Weakness: The weaknesses of CCF and MG involves the adverse conditions of the market which
can impact the revenues of the company. If there is a economic recession, the revenues of the
company would decline as people would not be looking for investment properties or home. The
increasing interest rates is also an important factor that could impact the company’s revenues. Other
weaknesses are huge number of compliance and regulatory issues, compliance costs, fiduciary and
legal costs.
Opportunities: CCF and MG can expand its warehouse line-of-credit as equity owned by the
company could offer credits through warehouse line. CCF and MG can expand into different new
planes of the mortgage industry. In this way, the company can avail multiple revenue streams from
a single client. The company can develop and market better financial products and strategies.
Threats: CCF and MG has not done any patent protection on its financial strategies. The most
critical threat to the company is the ever changing regulations of the mortgage financing industry.
Credit market is another threat faced by the company. The omissions and errors in the operations
and documentation can cause critical legal liabilities for CCF and MG. Also, there are many
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upcoming operators in the targeted market.
The sources that offered data and information for the analysis are internal data, information
about other companies in the market and also government data. The internal data compared the
outcomes of the different branches of the company. The data on other companies in the same niche
market gave details that helped in the SWOT analysis of the company. The government data was
used to analyse the various regulatory and compliance policies. The other sources of benchmarking
data are industry analysis, customer reports, annual reports, past and current performance report.
The key indicators for the benchmarking were selected on the basis of overall objective of
the company. The indicators are closely linked to the risk and problems faced by the company. The
benchmarking process compared the performance of the company with other companies on the
basis of certain measurable parameters that offer strategic importance. These indicators measured
the business excellence that included leadership, policies, resource management, people
management, customer satisfaction, business results and business processes.
The cost benefit ratio sums up the costs and benefits that a project or activity can provide
and thus reveals whether that particular project or activity is profitable. The areas for improvement
(CBR<1) as revealed by the cost benefits ratios are micromanagement, resource utilization,
information system for maintaining and recording all the data and maintenance:
Areas for improvement Cost-benefits ratio
Micromanagement 0.76
Resource Utilization 0.98
Information System 0.91
The recommendations for improving the organisational structure of CCF and MG include
organization by function. The company should analyse all its functions and then a proper
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organizational chart needs to be developed. In this way, it can be ensured that each is function is
aptly staffed. Creation of a chain of command is another technique to create a clear hierarchy within
the organization. With his clear hierarchy, the workflow of the company will also improve. An
effective communication is the backbone of the successful organizational structure. The employees
should be kept in the loop in relation to the business decisions taken by the management.
The action plan to ensure that the above recommendation are appropriately utilised by the company
include informing the stakeholders of all the recommendations. In addition, the stakeholders would
also informed about the resources that would be required for the implementation of the
recommendations. There would be committee formed that would monitor the progress of the
implementation of the recommendations. They will directly report to the directors of the company.
The review would be done on a quarterly or monthly basis. In addition, the assumptions that were
considered while formulating the recommendations would be examined on a regular basis. The
recommendations are based on the long term growth of the company. CCF and MG needs to
implement the recommendations properly so that the organizational structure of the company can be
made more efficient. The recommendations would only prove effective if all the stakeholders of the
company are included that cover directors, employees and other related staff. Change within the
company is inevitable and the company needs to make sure that the change is in the positive
direction.
Month Activities Deadline Responsible
January Creating an optimal organizational structure for
the company
Creation of a staff and management structure
Changes in the organizational chart as per the
needs
31/1/2017 Executive &
Senior Leadership
February Organization of the organizational chart based
on the different functions of the company.
Various functions include production, sales,
marketing, finance, sales, information
15/2/2017 Human Resources
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technology and human resources
March Combination of the functions to specify
multiple responsibilities to the various
departments.
Combination of the human resources and
bookkeeping.
Setting benchmarks that alert when the
functions should be separated.
30/3/2017 Executive &
Senior Leadership
March Creation of a clear and distinct chain of
command.
30/3/2017 Human Resources
Assessor feedback: Resubmission required?
Competency not yet demonstrated. Please refer to points 5 and 7
and provide a list of areas for improvement and a high level Action
Plan.
Competency now demonstrated.
No
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Task 8 —Managing people performance
One of your key responsibilities as general manager is to develop and implement ways to improve the performance of CCF & MB’s consultants and other staff members.
Answer the following questions:
1. Why is it important to consult with stakeholders when allocating work? What are the possible consequences of allocating work without consultation?
2. Describe the process you might follow when developing quantitative and qualitative performance criteria. You should explain how you ensure that the criteria relate to CCF & MB’s objectives and how to motivate staff members to achieve these objectives.
3. Describe the different ways you might gather information about a staff member’s workplace performance.
4. What are the benefits of evaluating and monitoring staff members on a continuous basis?
5. Describe how you might do this in CCF & MB.
6. Why is it important to document the performance management process? Explain the possible consequences of not retaining appropriate records of this process.
7. How can reward and recognition influence the work output of employees? Describe non-financial ways of motivating employees.
Your answers should be 250 words for each numbered question above.
8. Design a high-level performance management process for CCF & MB to be rolled out to all staff members.
9. Who should you consult when designing the performance management process? List who you would consult and the reasons why.
10. Develop a checklist for delivering regular performance appraisals, including a section for team leaders and supervisors to completea section for team members participating in the performance appraisal process.
(800 words)
Martin and Luis are working together on project involving the preparation for a loan application for one of CCF & MB’s most influential clients, a property developer. Martin missed a deadline and the whole project is now behind schedule by a week. This is the third time in a month that he has missed a deadline. Martin has had problems with meeting deadlines in the past and has already had a written warning.
As the general manager you have been monitoring Martin’s performance over the past month, providing informal feedback about his role in the project. Although he has made several improvements regarding his performance, his inability to meet deadlines has forced the delay of the client’s development a further month. CCF & MB made a commitment to the client that the loan application would be with prospective lender two weeks ago.
The client is not happy that his he does not yet have an approval and is considering cancelling the agreement he has with CCF & MB and going elsewhere.
11. You have arranged to meet with Martin to talk about the project and his input. How would you go about providing constructive feedback to Martin?
(500 words)
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Student response to Task 8
Task 8 —managing people performance
Involvement of a stakeholder impacts the outcome of the project or the project can impact the
stakeholder. Usually, the involvement of the stakeholder is at the initial stage of a project.
Stakeholder provides insights and ensures that the resources are available to make the project a
success. The stakeholder provides a reaction to the probable outcome and then it is used to facilitate
the project’s requirement. Even though the stakeholder can work in any role, the role of a
stakeholder can change according to the projects demand. Allocating the work without the
knowledge of a consultant can result in either success or failure of the project. However, on
consulting a consultant, increases the chance of the success of the project. Allocating work without
consultation can produce several consequences, such as the wrong allocation of the resources,
improper workforce distribution, issues in time management, etc.
When developing quantitative criteria which focus on the number or quality and the
qualitative performance criteria that focus on the character or the quality of the primary subject,
what we need to focus are the indicators that help in finding, what has changed or what is
happening in the project’s outcome. Indicators help in asking questions regarding these changes and
after that, they are measured. Implementation of quantitative and qualitative measures can be used
to serve the CCF & MB’s objectives. With the help of indicators, we can find the project’s outcome
and the key areas that need further development. Employees and staff need to focus on these
indicators to avoid any difference in the expected project outcome and the actual outcome. A fact
for their motivation is that they need to focus on only these indicators and everything will fall into
place.
For a better workplace and a better working environment in the office, it is necessary that
the4 employees are always happy and motivated to do the work allocated to them. However, it is a
very rare situation where almost every employee of an office is motivated and thinks high of his
work. There are several factors that can help in the evaluation of the workplace performance of an
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employee. These are: Keeping the principle of audit in consideration – Mining every detail of an
employee is not necessary, a small proportion of the performance of the employee that can decide
the competence or incompetence. Creating a benchmark, which shows the performance degradation
after a certain performance score of an employee. Goal-oriented and brief review to the employee –
When providing a review to the employee, the manager need to provide a brief and goal oriented
review, it will help the employee to learn about the areas where they can improve their performance
and thus help the organization to reach their goals. A careful review of the employee – The review
of the employee need to be on the basis of their performance over a significant amount of time
rather than the current performance. It may happen that an employee may not be able to perform
well at present but in the past, the employee has performed well so before the review, these things
can make a difference in the future of both the organization and the employee.
While it is necessary for an organization to look for the performance of an employee, it
needs to be on a continuous basis. It helps the organization in taking decisions based on the
evaluation of the employee. There are several benefits of monitoring a staff member on a
continuous basis so that they get to know about the growing path of the employee. Monitoring and
evaluating can simply be an act of a routine collection of data and this data can be motivation level,
performance, strategies, outcomes, etc. Benefits of monitoring performance are:
Error identification – A continuous monitoring can help in removal of those small errors,
which are small in nature but takes up a lot of time and resources while solving them or searching
them. Monitoring helps the organization in finding the loopholes within the process so that they are
removed before they cause any trouble.
Workforce strength identification – A continuous monitoring helps an organization to know
about the strength of their workforce. There can be several cases where the employees may be
trying hard to perform, but they are unable to do so. Monitoring will help the organization to find
such flaws that are preventing it to achieve the goals. By working on the elimination of these flaws,
the organization can increase the strength of their workforce and thus can also identify the actual
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strength of its workforce.
Safety assurance – Almost every organization thinks of providing security to both its
employees and its working culture with the help of some policies. However, even when all these
policies are told to the employees at the starting of their job, there are instances where an ignorant
employee had done something that is not in favor of security and without noticing the seriousness
of the matter they keep on doing it. It not only makes them the person at fault but also creates a
danger situation for the organization. A continuous monitoring allows the responsible authorities to
take required action before it is late to recover from any innocent fault.
Policy adherence – Every organization has some policies or rules and regulations for their
employees to adhere to. These are made for the security of both employee and the organization.
However, there are sometimes when several employees do not adhere to the policies and then there
are some who thinks that these policies are not for them, so the organization has to suffer a lot
because of these employees. Continuous evaluation and monitoring offer the chance to the
organization to warn these employees to follow the predefined rules or policies. Repeating these
mistakes again can allow the organization to offer a warning to these employees.
Since CCF & MB is already an established organization and they surely had some policies
to which the employees or staff need to adhere to. Simply following the theory of continuous
monitoring and evaluating the staff members can provide effective management to the company.
All the staff members will be ensured to follow these policies from the top level to bottom level so
that the employee at bottom level do not copy those top level executives who do not follow any
policy.
It is really important to document the management process of performance and seriously
there is no reason for not documenting the performance. Documenting is an easy task and has
several profits, such as:
Improvement – As the documentation process takes place on a regular basis, it allows the manager
to look for a trend in the documents of any employee. These trends can be either negative or
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positive. If the record shows some positive trends, then it is good for both the employee and the
organization. However, if the records are showing a negative factor of the employee, then the
manager can talk to the employee regarding the matter and can ask for the reason for the
degradation of their performance.
Legal issue – The documentation allows an organization to avoid any legal troubles.
Documentationhelps to keep a tab on the performance of the employees. A thorough documentation
can help the organization in helping its employees at the time of any legal trouble.
No documentation can lead to the troubles mentioned above and resolution of these troubles can kill
useful time and money of the organization.
An employee can be motivated in several ways resulting in the increased work output from
the employees. Rewards help an employee to work beyond their normal work routine. Financial aid
and some non-financial ways help the employee to stay motivated. Some of the non-financial ways
for the motivation of the employees are:
Status – When an employee’s work is linked to their status, then there is a greater chance of them to
perform better. An employee will definitely work hard and more when they get to know that they
will get promotion after accomplishing a certain task.
Opportunity – Every employee wants to get promoted so when there is a promotion vacancy and
only the top performer is going to get it, then it creates a competition among the employees and
their performance go beyond normal routine.
Recognition programs – Every employee wants to be treated as an important employee to the
company. To get the recognition, the employees get motivated and work, which helps both the
employee as they get the recognition in the organization and to the organization as it achieved its
objectives early.
As it is already mentioned that Martin was unable to meet the deadline not once but thrice, however
he has shown some improvement. However, it should not hide the fact that because of the
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mismanagement of Martin, the client has considered of canceling the agreement with the company.
I have a meeting with Martin regarding his performance and the points to keep in consideration as it
is a constructive feedback session, are:
Feedback construction – First I will make it clear to Martin, what we are going to discuss,
what are the topics and issues we will cover and why they are important to talk about. In this way it
is helpful for the other person to understand the topic on which the feedback session is based,
another person, being Martin here. The feedback will be directed towards Martin. I would start with
– I have some thoughts regarding your performance from sometimes.
Describing observed things – I would include certain events and certain information with
Martin so that he gets the point, what I am talking about and who were the involved people and
where the incident has happened. I will see his performance documents and based on that I will
provide the feedback, not on the basis of the information from others. I will say – Martin, I’ve been
continuously following your performance over the past month and you had already missed the third
deadline in this month.
My reaction – Here I will provide Martin the reaction that I have when someone do the same
thing or some real life examples so that it is easy for him to understand what I am trying to say, that
also in a controlled manner. I will say – I had also noticed that because you were not able to meet
the deadline for three consecutive times and we had not taken any action to it, so other employees
also became careless regarding their work. You must understand that it is not acceptable in this
organization.
Response opportunity – Here, the employee getting the feedback have the chance to say
anything they would like to discuss in their defense. I must ask Martin about his views by asking –
What do you think of this situation?
Offering suggestions – Whenever it is possible we should provide some suggestions to the
employee here. It can help the employee to think that this is not the end and it is the time to talk
about the ways to improve this condition, so I will say – Martin, I sometimes keep a reminder for
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some specific tasks to make sure that I am able to perform the task in the given time. Keeping
reminder help me to remember that I have to do something. You should also try this to eliminate
your weakness.
Summarizing and providing support – At the end this is where I will summarize the whole
feedback session with Martin. Here all the major points that were discussed will be reviewed.
Summarizing the points that require some action from Martin’s side or my side. Stressing on the
specific things at the end can help Martin to remember the core thoughts of the feedback session. I
will say – Martin, as I have told you about the reaction of other members and what were the
consequences of your performance on their working habits. I would like to suggest you keep a tab
on your time scheduling habits. Summarizing helps to remove any miscommunication regarding the
feedback and it also allows the in charge person to show their support towards the person who
requires feedback. It shows that I am willing to help Martin to ensure his better future work. To end
this on a positive note, I will say – At least we understand what the crucial points of this session
were and I will do anything that you require as help to ensure smooth flow of work. In future, if you
face same trouble again, you can ask for help and I will help in every possible way.
Assessor feedback: Resubmission required?
Competency demonstrated. While you have not completed a
―checklist‖ as asked in point 10 I am comfortable on this occasion
that you appropriately answered this point.
No
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Task 9 — Showing leadership in the workplace
Leadership is defined as the ability to influence others. This assessment task requires you to reflect on your own ability to positively influence others in the workplace and the negative aspects of poor leadership.
1. Reflect on a situation where you have had a positive impact in the workplace. Please include in the reflective writing the skills, decisions and or behaviours you demonstrated that contributed to this positive change and what the impact was for the team, clients and the organisation. (400 words)
2. Reflect on a situation which was or could have been damaging to the organisation. Please include the behaviours, standards or values that were demonstrated and explain why they were detrimental. (400 words)
3. In your role as the general manager of CCF & MB create your own personal performance plan. You may use your own personal performance plan or alternatively you can use the example below. In developing your personal performance plan you should ensure that your personal KPIs reflect CCF & MB’s goals and objectives and how you can help in building CCF & MB’s integrity and credibility.
What are my development objectives?
Priority What activities do I need to undertake to achieve my
objectives?
What support/resources do I need to achieve my
objectives
Target date for achieving my
objectives
Actual date of achieving my
objectives
Review date:
4. Feedback from colleagues, staff and management may be gathered informally and formally including performance review feedback. Why is it important to analyse and interpret all feedback? (400 words)
Student response to Task 9
Task 9 — Showing leadership in the workplace
1 – I usually have a changing working hours and me with my team faces change in shift timings
from week to week. Since I work for an organization that works for all twenty-four hours and thus
all the employees are divided into teams who work for five days a week and then from next week
onward they have to come to the office on new timings. It was one day when I was working late in
the office because I was on overtime so as usual when the clock hits the end time of the shift, my
colleagues started to pack their files or started finishing their work to take leave from the office. As
they were leaving, there was a bit disturbance and noise in the office environment, so I had to take a
break from my work till everyone is gone. As I was sitting in my chair watching everyone leaving, I
found something strange happening. It was not something that could do any harm to someone, but
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what grabbed my attention was that no one apart from a single girl, when leaving arranged their
chair that they were sitting on in their office hours. Since I was there to do overtime so I was
working the second shift arrived. All the people from the second shift were on time. However, they
were searching for the chairs as the early ones took all the available chairs from the nearby areas,
but the latter ones were facing trouble to find chairs. It took almost 15 minutes to them to settle
down fully. I was shocked to see that if this happens every time and with every new batch then
calculating the wasted time was very much. So I told about this incident to my senior and they ask
me to explain it to them. I told them that adding fifteen minutes of every batch make a huge amount
of time going waste. Had everybody adjusted their chair before leaving office, this time could
havebeen saved. After understanding my point of view, my seniors appreciated my thoughts. Later,
next week they implemented a rule that whoever leaves an office should adjust their chair to their
table before leaving. This cleared the mess that was before and also makes everyone disciplined
enough to make their working desk and chair. My organization also appreciated this act of mine and
rewarded me for this.
2 – As I had mentioned earlier about a situation that was wasting the time of the organization I
worked for and the unusual fact was that even after this damage, no one was at fault of this damage.
After my talking of this issue with my seniors, they were able to eliminate it. It was a necessary step
to take from the organization’s side as this implemented a structured culture within the
organization, where every individual was aware of the resources allocated to them and was utilizing
them efficiently so that it did not create an issue to others. Another fact that this step of mandating
the alignment of the chair by the user with their desk was necessary because after this step the
operating efficiency of the organization improved from the time when every shift was wasting their
initial 15 minutes to search for a chair to sit on for work. It led to a positive change among the
employees and they learn about discipline and how it can affect our daily routine and other life also.
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3
What are my
development
objectives?
Priority What activities do I
need to undertake to
achieve my
objectives?
What support/resources
do I need to achieve my
objectives
Target date for
achieving my
objectives
Actual date of
achieving my
objectives
Development of a
Business design
model
High Cooperation with the
senior management.
Strategies and policies of
CCF and MG
September
17,2016
January 1,2017
Assist with
strategic planning
High Cooperation with the
senior management.
Strategic goals of the
company
August 10,
2016
December 1,
2016
Review date: February 1, 2017
4 – For a successful and effective performance management program, timely and orderly feedback
is considered as a critical element. The feedback must be used together with the performance goals
of the company. If feedback is obtained in an appropriate manner from the colleagues, staff and
management, the performance of CCF and MG would also improve along with the performance of
the staff and management. The feedback obtained must be related to a single goal as it would help
in offering powerful, objective and tangible feedback. The company must avoid to create a situation
of feedback famine. It is a type of vacuum that exists when the management does not obtain enough
information in relation to the performance of the staff and also business activities. And it is not just
about a formal feedback, there is a need of regular, informal and ongoing feedback. It is one of the
cheapest management tool that a company can use in order to improve the performance of the
company. It helps the company to get back on the track in relation to the achievement of the aims
and objectives of the company. It is important to analyse the feedback from the staff and implement
the outcomes that come from the analysis. This makes the staff feel more involved in the business
activities of the company and thus they feel energized and motivated. This improves the overall
performance of the company. In the absence of feedback, the company would be on a journey but
without signposts or a map. This means that the company has a sense of direction and resources but
even then it is not on the correct track. In addition, both form of feedback is important, i.e. positive
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and negative. It would help in the decision-making of the company and would allow the
management to search for ways to make the process better. Feedback should not be confused with
criticism but the case is totally opposite. A negative feedback is a form of constructive criticism
which is the best as it facilitates the management to make better decisions for improving and
increasing the performance of the company. In the current times of ever changing market
conditions, feedback can be considered as an effective learning process. The company would also
be able to gain information about the good decisions that it has taken. It would provide the boost
that will obviously improve the performance of the company.
