Application
This unit describes the skills and knowledge required to analyse a client’s life insurance needs for current Australian Securities and Investments Commission (ASIC) regulation (Financial Services Reform Act) at Tier 1 (Diploma) level in the insurance specialist and generic knowledge areas.
It applies to individuals who have specialist product knowledge and strong interpersonal skills and are expert communicators. In this role, excellent customer service skills relating to the provision of advice to clients is essential.
Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Refer to the FNS Implementation Guide Companion Volume or the relevant regulator for specific guidance on requirements.
Elements and Performance Criteria
ELEMENT | PERFORMANCE CRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Establish relationship with client | 1.1 Use range of communication and interpersonal skills to establish knowledge level of client 1.2 Respond to enquiries by explaining range of products and services available and their relevant fees and charging methodology 1.3 Inform client about role of adviser and licensee or principal responsible for adviser’s conduct 1.4 Demonstrate knowledge of procedures for complaints handling and circumstances in which they should be engaged |
2. Identify client’s objectives, needs and financial situation | 2.1 Use range of communication and interpersonal skills to gather client’s personal, financial and business details 2.2 Encourage client to express objectives and goals, in short-term, medium-term and long-term, to identify client requirements in tandem with product 2.3 Identify product risk profile of client 2.4 Identify client’s expectations of cash flow and relevant taxation obligations |
3. Analyse client’s objectives, needs, financial situation and risk profile | 3.1 Undertake assessment of client needs, using all information gathered and taking into account client’s product expectations and specific needs 3.2 Consult client throughout analysis to seek further clarification where necessary 3.3 Analyse need for specialist advice and refer client to appropriate adviser for higher level or specialist advice if required 3.4 Assess and agree on product risk profile of client 3.5 Apply ASIC generic and specialist knowledge relevant to products being offered |
4. Develop appropriate strategies and solutions | 4.1 Determine appropriate strategy to provide for identified needs and outcomes by analysing products and client risk profile, and assessing client’s needs 4.2 Undertake relevant research, analysis and product modelling 4.3 Draft appropriate solution (plan, policy or transaction) for presentation to client |
5. Present appropriate strategies and solutions to client | 5.1 Explain and discuss proposed transaction with client in clear and unambiguous way, demonstrating product knowledge appropriate for service or product offered 5.2 Reinforce all relevant details, terms and conditions of product and service to client 5.3 Disclose impacts and possible risks of solution in clear and concise manner 5.4 Provide client with written supporting documentation and guide client through key aspects of documentation |
6. Negotiate financial plan, policy or transaction with client | 6.1 Discuss and clarify any concerns and/or issues client has regarding proposed insurance plan, policy or transaction 6.2 Seek client’s preferred plan, policy or transaction and confirm client’s preference |
7. Coordinate implementation of agreed plan, policy or transaction | 7.1 Seek formal agreement from client to proposed plan, policy or transaction 7.2 Clearly explain associated fee and cost structures, and confirm client understands all details 7.3 Ensure that timeframes for execution and processing are clearly explained to client |
8. Complete and maintain necessary documentation | 8.1 Confirm that proposal and other documents are completed and, where appropriate, are signed off by client 8.2 Ensure that signed agreement and copies of appropriate documentation are exchanged |
9. Provide ongoing service where requested by client | 9.1 Ensure that type and form of ongoing service, including review of plan, policy or transaction, is agreed with client 9.2 Clearly explain and confirm fees and costs for ongoing and specifically defined service, and confirm client understands all details 9.3 Provide ongoing service as required |
Evidence of Performance
Evidence of the ability to:
interpret and comply with industry regulations and codes of practice in providing Tier 1 personal advice in life insurance
analyse client’s need, risk situation and a range of financial products to develop a risk profile and potential strategy or solution
advise clients accurately and ethically about specific life insurance products and services, and relevant tax implications
finalise plan, policy or transaction, ensuring all documentation is completed accurately following organisational procedures.
Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.
Evidence of Knowledge
To complete the unit requirements safely and effectively, the individual must satisfy generic, core and specialist knowledge requirements relevant to the products and activities in which advice is given.
Generic knowledge
analyse and provide an overview of the economic environment including:
characteristics and impact of economic and business cycles
interest rates and exchange rates
inflation
government monetary and fiscal policy
analyse and provide a detailed explanation of the operation of financial markets including:
roles played by intermediaries and issuers
structure and interrelationships within the financial markets
interrelationship between industry sectors
outline financial products including:
concept of a financial product – general definition, and specific inclusions and exclusions
types of financial investment products
types of financial risk products.
Core insurance knowledge
explain the operation of insurance markets including:
definition of insurance product
characteristics and participants of the Australian insurance market
roles played by intermediaries
types of insurance products including risk insurance products, investment life insurance products and general insurance products
explain the following aspects of insurance products:
conditions, exclusions and levels of coverage of risk transfer products
pricing
explain taxation issues in relation to insurance products and markets
describe advisory functions including:
role of insurance adviser, broker or agent
participants in the insurance advisory services market
range of services provided
profile and financial information of the client
appropriateness of a risk assessment
discuss the legal environment including disclosure and compliance covering:
role of the representative or adviser
relevant legal principles relating to the Corporations Act, Australian Securities and Investments Commission (ASIC) Act, Insurance Contracts Act, Life Insurance Act, Privacy Amendment (Private Sector) Act, Financial Services Reform Act (FSRA) and Competition and Consumer Act
relationship between ethics and regulatory requirements including good faith, faith, utmost good faith, full disclosure of remuneration and fees, and any other conflicts of interest which may influence the adviser's recommendation
relevant industry standards and codes of conduct
regulators’ guidelines including ASIC Regulatory Guide (RG)146 requirements
complaints resolution procedures (external and internal).
Specialist knowledge
outline the following aspects of life insurance:
types and classes of life insurance products and policies
standard cover and relevant deviations
product development
policy wordings
underwriting
insurance claims
premium rating and risk assessment
investment strategy (investment component of life insurance products).
Assessment Conditions
Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial services and products advice field of work and include access to:
office equipment, technology, software and consumables
organisational records
organisational policy and procedures.
Assessors must satisfy NVR/AQTF assessor requirements.
Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the performance criteria that are required for competent performance.
Skill | Performance Criteria | Description |
Reading | 1.4, 2.3 | Recognises and interprets information from relevant sources |
Writing | 1.1-1.3, 2.1, 2.2, 2.4, 3.1, 3.2, 4.3, 5.3, 5.4, 6.1, 6.2, 7.1-7.3, 9.1, 9.2 | Uses clear, specific and industry related terminology to record and consolidate workplace documentation |
Oral Communication | 1.1-1.3, 2.1-2.4, 3.1, 3.2, 3.4, 5.1-5.4, 6.1, 6.2, 7.1-7.3, 9.1, 9.2 | Clearly articulates requirements using language appropriate to the audience and environment Uses active listening and questioning to elicit information and confirm understanding |
Numeracy | 1.2, 9.2 | Interprets financial product information and completes calculations to achieve required outcomes |
Navigate the world of work | 1.3, 1.4, 3.5, 4.2, 5.3 | Takes responsibility for providing quality advisory services that comply with legal and organisational requirements Develops and maintains knowledge of products and the relevant regulatory frameworks that define their use to provide accurate and compliant information |
Interact with others | 1.1, 2.1, 2.4, 5.1-5.4, 6.1, 6.2, 7.1-7.3 | Selects and uses appropriate communication conventions and protocols to establish rapport with clients to determine their knowledge and risk position Adapts personal communication style to show respect for the values, beliefs and cultural expectations of others Uses collaborative techniques to ensure understanding is established and agreement is negotiated |
Get the work done | 2.3, 3.1, 3.3, 4.1, 5.4, 8.1, 8.2, 9.3 | Takes responsibility for planning and sequencing the priority of some relatively complex tasks for efficiency and effective outcomes Uses research and analytical processes to decide on recommendations that meet client requirements, and provides support that complies with legal and organisational requirements including referral to specialist assistance Uses the main features and functions of digital tools to complete work tasks |
Sectors
ASIC units