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Kaplan Tier 1 Financial Planning > Working in financial planning > Flashcards

Working in financial planning Flashcards

1
Q

Are the terms financial planner and financial advisor used interchangeably?

A

Yes.

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2
Q

What is a broker?

A

An intermediary who acts for a client to source a suitable product for their needs.

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3
Q

What license must an insurance broker hold?

A

Australian Financial Services Licence (AFSL).

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4
Q

Can an insurance broker be a representative of a licensee?

A

Yes.

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5
Q

What requirements must an insurance broker comply with?

A

Requirements of the Corporations Act.

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6
Q

What type of advisor is an insurance broker?

A

Financial product adviser.

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7
Q

What does a mortgage broker do?

A

Sources loans for a client.

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8
Q

What type of license does a mortgage broker need?

A

Australian credit license.

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9
Q

What legislation must a mortgage broker comply with?

A

National Consumer Credit Protection Act

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10
Q

What does a stockbroker do?

A

Advises clients on the purchase and sale of shares and other securities listed on recognised securities/stock exchanges.

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11
Q

What is an example of a stock exchange?

A

ASX.

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12
Q

What type of license does a stockbroker need?

A

AFS license.

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13
Q

What is an agent?

A

A term traditionally used to describe someone who acts for a principal such as a product provider and can bind the principal by their actions.

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14
Q

Who regulates real estate agents?

A

Consumer affairs departments in each state and territory.

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15
Q

What type of advice do accountants typically provide?

A

Advice on tax, structures (such as companies,

partnerships and trusts) and audits.

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16
Q

Up until 30 June 2016, what type of license could accountants obtain?

A

‘limited’ AFS licence.

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17
Q

What did a limited AFS license allow accountants to do in the past?

A 
Provide financial advice on SMSFs, and class of product advice on superannuation products, securities, simple managed investment schemes,
general and life insurance, and basic deposit products.
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18
Q

Do solicitors have exposure to the financial services industry?

A

Yes.

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19
Q

What financial areas do solicitors predominantly have exposure to?

A

Mortgage lending and estate planning.

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20
Q

What must solicitors hold if they provide financial product advice?

A

AFS license.

21
Q

What are common financial planner structures?

A

Independent financial planners

(i.e. obtain their own AFS licence), aligned dealer group financial planners and non-aligned financial planner.

22
Q

What do independent financial planners do?

A

Obtain their own AFS license.

23
Q

What do aligned dealer group financial planners do?

A

AFSL owned by a product provider.

24
Q

What are three other roles in a financial planning business?

A

Paraplanners, research specialists and marketing staff.

25
Q

What must financial planning licensees appoint to maintain competence of the organisation?

A

Responsible managers.

26
Q

Do financial planners commonly engage with external specialists?

A

Yes.

27
Q

What are five specialists that financial planners commonly enage with?

A

Tax practitioners, accountants, solicitors, stockbrokers and mortgage brokers.

28
Q

What are other financial service organisations?

A

Banks and other ADIs, superannuation funds, fund managers, insurers and finance companies.

29
Q

Previously, what was RG 146?

A

Minimum training and competency standards required of any licensee or representative of a licensee who provides financial product advice to retail clients.

30
Q

Since 1 January 2019, what do financial advisors need?

A

Appropriate degree, pass an exam and have one year work and training experience.

31
Q

Is CPD a requirement of financial training professionals?

A

Yes.

32
Q

Whose responsibility is it to determine the appropriate CPD that an advisor must undertake?

A

AFS licensees.

33
Q

How many principles in the FPA code of ethics?

A

8.

34
Q

What are the principles in the FPA code of ethics?

A

Client first, integrity, objectivity, fairness, professionalism, competence, confidentiality and diligence.

35
Q

How many principles in the AFA code of ethics?

A

6.

36
Q

What are the 6 principles in the AFA code of ethics?

A

Integrity and professional conduct, best interests, conflicts of interest, informed client consent,
service standards and professional expertise.

37
Q

What is the key to successful financial planning?

A

Relationship between the client and the financial planner.

38
Q

How can financial planners aid effective communicating and relationship building?

A

By developing their listening skills.

39
Q

What is active listening?

A

It is used to obtain more information and involves showing interest, paraphrasing, questioning and summarising techniques, and using silence where
appropriate.

40
Q

Does a planner’s licensee need a formal dispute resolution process?

A

Yes.

41
Q

Why does a planner’s licensee need a formal dispute resolution process?

A

To resolve client complaints.

42
Q

Why is building a referral network useful?

A

To assist solving client problems and to get referrals of new clients.

43
Q

What are skills you need outside of financial knowledge to work in the sector?

A

Communication, research, problem solving and self management.

44
Q

What is time management critical to?

A

Success of a financial planning business.

45
Q

What do the administration requirements of a financial planning practice focus around?

A

The collection, review and storage of information.

46
Q

How does all information about renumeration, fees, commissions and other benefits need to be presented?

A

Clear, concise and effective manner.

47
Q

What are common fee for service structures??

A

Hourly-basis, service-based, value-based,

percentage-based and hybrid arrangements.

48
Q

What is triple bottom line?

A

Corporations moving beyond reporting only on their

financial ‘bottom line’ to assessing and reporting on the three spheres of sustainability.

49
Q

What are the three spheres of sustainability?

A

Economic, social and environmental.

Kaplan Tier 1 Financial Planning (10 decks)

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