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Client Behaviour and Decision Making > Topic 6 - Managing Conflict > Flashcards

Topic 6 - Managing Conflict Flashcards

1
Q

safe harbour steps

A
  • Identifying the objectives, financial situation and needs of client.
  • Identifying the subject matter of the advice
  • attempt to obtain complete and accurate information.
  • Assessing whether the adviser has the expertise
  • If recommending a financial product, ensuring reasonable investigation and assessment
  • Exercising judgement based on the client’s relevant circumstances and clearly linking recommendations made to the achievement of the clients objectives.
  • other steps
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2
Q

Based on past disputes lodged at the Financial Ombudsman Service (FOS)*, financial planners face certain key risks in the provision of advisory services to clients.

A
  • inadequate clarity about the terms of engagement
  • lack of clear communication in words the client can understand about the advice process and the recommendations made
  • inadequate explanation or understanding by the client about the trade-offs
  • failing to match strategy and product recommendations to the clients’ objectives
  • lack of assessment of concerns raised by clients about advie
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3
Q

FOS’s Top 10 Tips for Getting Financial Advice Right

A
  1. Take detailed file notes
  2. Clear goals and strategy
  3. Turn clients away or refer when appropriate
  4. Explain the risks to clients who choose to act against your advice
  5. Explain what types of service you are providing
  6. Use template forms and documents carefully.
  7. Use risk profiling tools carefully
  8. Don’t give cookie cutter advice
  9. Understand and explain the products.
  10. Be clear about the advice relationship with clients you know.
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4
Q

Conflict

A

is a clash of opinions, values, needs or goals

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5
Q

Conflict can arise when:

A
  • needs are not met
  • differences of opinion or values
  • a person or group interferes with another’s attempts to satisfy their needs, wants or goals
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6
Q

Conflict management

A

is the process of ending a disagreement between two or more people in a constructive fashion for all parties involved

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7
Q

Managed constructively, conflict can sometimes produce positive payoffs

A
  • Pressures and frustrations are released
  • New perspectives and information can be gathered,
  • Complacency can be challenged
  • Change can take place
  • Cohesiveness can actually increase!
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8
Q

Conflict management styles

A

Avoiding style

Accommodating style

Competing style

Collaborating style

Compromising style

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9
Q

Avoiding style

A

low concern for both their own and the other’s interests

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10
Q

Accommodating style

A

low concern for their own needs and a high concern for others

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11
Q

Competing style

A

high concern for own needs and low concern for others

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12
Q

Collaborating style

A

high concern for both

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13
Q

Compromising style

A

some concern for both their own and the other’s needs

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14
Q

If a client makes a complaint to you, you should:

A
  • listen attentively
  • acknowledge their emotions
  • adapt your communication style to better connect with them
  • not make assumptions about what the issue is
  • clarify your understanding by paraphrasing what they’re telling you
  • explain your AFSL’s dispute resolution process
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15
Q

active listening

A

can be used to improve the quality of information collected during client meetings

Active listening can be equally effective in identifying the root cause of a conflict situation

Listening with empathy helps you to identify both content and feelings

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16
Q

three components in the active listening process are:

A

attend to and focus on the other person
encourage the other person
reflect or mirror the other person’s message

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17
Q

Nonverbal communication

A

includes gestures, posture, eye movements, facial expressions, vocalisations and voice qualities
may support or alter the verbal components of a message

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18
Q

Probing questions complemented by active listening

A

can challenge and encourage all parties in a conflict to communicate openly and honestly

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19
Q

In a conflict situation (Non - verbal commumnication)

A

speak in a pleasant way
send appropriate verbal messages
match your verbal and nonverbal messages
pay attention to the other person’s nonverbal messages
ask questions to check your interpretation

20
Q

The Four R Method

A

1 Receive the other person’s comments without interruption and avoid defensiveness

2 Repeat the other person’s comments as objectively as possible

3 Request the other person’s proposed ways of dealing with the problem

4 Review the options and decide on the best approach

21
Q

ASIC has adopted the Australian Standard AS ISO 1002-2006 definition of a complaint:

A

An expression of dissatisfaction made to an organisation, related to its products or services, or the complaints handling process itself, where a response or resolution is explicitly or implicitly expected.

22
Q

The Corporations Act 2001 (Cwlth) requires all Australian financial services (AFS) licensees (AFSLs) and financial product issuers

A

to have a dispute resolution system available for retail clients.

23
Q

The dispute resolution system must include:

A

internal dispute resolution (IDR) procedures that meet the standards or requirements made or approved by ASIC; and
Membership of an ASIC-approved external dispute resolution (EDR) scheme.

24
Q

Benefits of effective IDR procedures include:

A
  • Maintaining client satisfaction and preserving relationships
  • Resolving disputes quickly and efficiently
  • The early identification of recurrent/systemic issues
  • The ability to find solutions to your problems without these being imposed by external bodies
  • Avoiding EDR involvement and associated costs
25
Q

AFCA

A

is a new external dispute resolution (EDR) scheme to deal with complaints from consumers involving financial services and products.

26
Q

Issues and problems consumers can complain to AFCA about include:

A

Advice given about a product or service where the advice wasn’t in the client’s best interests, or was inappropriate or insufficient.

Charges or broker commissions that were incorrectly charged, applied or calculated.

Where information given about a product, including fees or costs, was misleading or insufficient (including the risk of an investment product).

Decisions made by a financial firm, including decisions about the suitability of recommended investments, an inappropriate margin call notice, or investment liquidation.

If instructions given by a client (for example, to buy or sell stock) weren’t followed or there was a delay in actioning them.

Privacy and confidentiality breaches.

Transactions that were incorrect or unauthorised.

27
Q

Causes of Conflicts

A 
Scarce Resources
Economic Hardship
Faulty Communication
Differences between people
Biology - aggressiveness
Environment
Health
28
Q

Why should you use compassionate curiosity during conflict

A

Shows desire to understand
Asks high level questions
Shows a goal to learn
Calms down other party

29
Q

Causes of Conflicts

A 
Scarce Resources
Economic Hardship
Faulty Communication
Differences between people
Biology - aggressiveness
Environment
Health
30
Q

Why should you use compassionate curiosity during conflict

A

Shows desire to understand
Asks high level questions
Shows a goal to learn
Calms down other party

31
Q
  1. Outline two suggestions from the Financial Ombudsman Service (FOS) to ensure clients have appropriate expectations concerning the nature of the advice provided.
A
  1. clearly explain the type of service they are providing. Clients don’t know the difference between information, general advice, personal advice, limited advice and execution-only services.
  2. Explain the risks to clients who choose to act against your advice.
    Be very clear in explaining the risks and documenting that the course of action is against your advice. Explain the risks in language the client understands, make a contemporaneous fi le note and have the client sign it.
32
Q
  1. Provide an example of ‘best practice’ recommended by the Financial Ombudsman Service (FOS) for appropriate recordkeeping with respect to client communications.
A
  1. Take detailed file notes. Whenever possible, confirm verbal instructions from a client in writing
    .
  2. Write down a client’s objectives in the words the client has used in answering your questions about their objectives and how to quantify those objectives.
33
Q
  1. Based on the FOS’s ‘Top 10 Tips for Getting Financial Advice Right’, how may an adviser’s awareness of their own areas of competency and expertise help to prevent conflict?
A

If your services are not suited to a particular clientyou must tell them so. Don’t try to shape the client to your offering.

Understand any products you are recommending.

34
Q
  1. Identify the five conflict handling styles described in the Thomas Kilmann Conflict Model and explain the intentions of a person using each of those styles.
A

i. Avoiding / withdrawing style
ii. Accommodating style
iii. Competing style
iv. Collaborating style
v. Compromising style

35
Q

i. Avoiding / withdrawing style

A

indicates low concern for both their own and the other’s interests. One party retracts its point of view of backs away from the situation, leaving it unresolved. Dissatisfaction may lead to future conflict.

36
Q

ii. Accommodating style

A

indicates a low concern for their own needs and high concern for others. One party is willing to ‘give ground’ to meet the needs of the other. Useful option on minor matters or where relationship management is of high importance.

37
Q

iii. Competing style

A

indicates a high concern for own needs and low concern for others. One party negotiates to maximise their results at the expense of the other party’s needs – destructive for interpersonal relationships, and the solution is likely to be temporary as it leaves person who loses in a difficult / uncomfortable situation.

38
Q

iv. Collaborating style

A

indicates high concern for both. Parties cooperate to produce a result satisfactory to both. Supports the development of interpersonal relationships, and builds permanent solutions and commitment to these solutions as a result.

39
Q

v. Compromising style

A

indicates some concern for both their own and the other’s needs. Involves the settlement of differences via compromises by one or both parties

40
Q

Managed constructively, conflict can sometimes produce positive payoffs. For example:

A
  • Pressures and frustrations are released
  • New perspectives and information can be gathered, leading to better decision making and problem solving
  • Complacency can be challenged
  • Change can take place
  • Cohesiveness can actually increase
41
Q
  1. Describe the type of listening most suited to conflict management and resolution
A

Active Listening
Emphatic Listenign
Probing Questions with emphathic listening

42
Q

The three components in the active listening process are:

A
  • attend to and focus on the other person
  • encourage the other person
  • reflect or mirror the other person’s message
43
Q

Emphatic listening

A

can help the listener tune into the content and feeling aspects of the message and also help the individual identify his or her own feelings

44
Q

Probing questions complemented by empathic listening

A

can challenge and encourage all parties in a conflict to communicate openly and honestly.

45
Q

Nonverbal communication (NVC)

A

includes gestures, posture, eye movements, facial expressions, vocalisations and voice qualities.

46
Q

What are the likely implications of a ‘mismatch’ between the verbal and nonverbal components of a message?

A

If your verbal message does not match the nonverbal component, there is a tendance to believe the nonverbal part of the message.

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