Core Knowledge
2871-7620Assessment
Core Knowledge
Good Conduct
31855 v1
New Zealand Certificate in Financial Services v2
Module 1
10 credits
-1211832175260Contents
020000Contents
TOC o "1-3" h z u Introduction PAGEREF _Toc126323407 h 3Assessment Guidance PAGEREF _Toc126323408 h 3The Assessment Process PAGEREF _Toc126323409 h 3Students with Specific Needs PAGEREF _Toc126323410 h 4The Assessor Role PAGEREF _Toc126323411 h 4The Appeals Process PAGEREF _Toc126323412 h 4Resources PAGEREF _Toc126323413 h 5References PAGEREF _Toc126323414 h 5Student Declaration Form PAGEREF _Toc126323415 h 6Assessment Tasks PAGEREF _Toc126323416 h 7Task 1 (US 31855 PC 1.1) PAGEREF _Toc126323417 h 7Task 2 (US 31855 PC 1.2) PAGEREF _Toc126323418 h 7Task 3 (US 31855 PC 2.1, 2.2, 2.3 and 2.4) PAGEREF _Toc126323419 h 8Task 4 (US 31855 PC 3.1) PAGEREF _Toc126323420 h 11Task 5 (US 31855 PC 3.2) PAGEREF _Toc126323421 h 13Task 6 (US 31855 PC 4.1 and 4.2) PAGEREF _Toc126323422 h 13Assessment Decision Form PAGEREF _Toc126323423 h 15Assessment Schedule PAGEREF _Toc126323424 h 15
Assessment
Core Knowledge
IntroductionThis assessment contains the information you need to determine competency for Core Knowledge for:
Unit Standard 31855 v1 Demonstrate and apply knowledge of financial services legislation, good conduct, professionalism, and Six Step Process
This document contains:
Assessment Guidance
Assessment Tasks 1-6
Student Declaration Form
Assessment Decision and Schedule Form
Important information to note there are four assessment documents in the Core Knowledge module. In the last assessment 31858v1, students are required to submit a Verification Declaration Form covering all the assessments in the Core Knowledge module.
This document is strictly confidential and the contents must not be disclosed to Students or any unauthorised persons or used in any unethical or illegal manner. All copyright laws apply.
Assessment GuidanceThe Assessment ProcessTo achieve the unit standard you must complete and return to Professional IQ College the following documents:
Assessment answers for all questions or tasks
Student declaration form completed and signed
The assessment is competency based and focuses on the application of learning in your role in your normal working environment. The study guide provided for this unit standard contains the information necessary to develop your knowledge and understanding of the Core Knowledge.
The assessor will use their professional judgement as a qualified assessor and subject matter expert to evaluate your assessment ensuring that it is:
Valid: meets the outcomes and evidence requirements of the unit standard being assessed
Fair: a fair representation of what you can do and or know against the outcomes of the unit standard
Authentic: it must be your own work and must not be copied from any course materials or other text
Sufficient: answers must be full and complete enough for the assessor to judge competency
Consistent: answers are consistent with the assessor guidelines and national consistency requirements
The evidence you submit must comply with any policies and procedures of your organisation; codes of practice of relevant professional bodies or; any relevant legislative and regulatory requirements.
Students with Specific NeedsIf you have specific learning needs, you should have informed the College of these at the time of enrolment. This will enable the Academic Manager to discuss with you what appropriate support is required to complete your study and assessments.
For example, where client files are used as evidence, they must not contact any identifiable information that would link the submitted evidence to an individual.
The Assessor RoleThe assessor will consider all written evidence provided by you and decide if it is competent or not yet competent.
The assessor may require you to provide more evidence on one or more questions or tasks if in their judgement they feel the answer is insufficient or incorrect.
Where there is not enough evidence to make a decision on competency your assessor will send you a request for further information (additional questions) which means you will need to supply further information. They may call you to have a professional conversation or to clarify a point in your answer.
The assessor will complete the Assessment Decision Form, including any feedback and return the result to you within 10 working days from receipt, by the assessor of your assessment.
Please retain a copy of your assessment and assessment result.
The Appeals ProcessThe explanation for the appeals process can be found in both the (Level 5) Student Handbook Form 7.3, Appendix 6 and in the Student Form section of the Professional IQ College website www.professionaliq.co.nz
If you disagree with an assessment decision, please follow this guide and complete an Assessment Appeal Form and send it to the Academic Manager at Professional IQ College. An independent assessor will be asked to investigate the appeal.
Resources
A copy of the unit standard can be downloaded from the NZQA website www.nzqa.govt.nz
It is important you fully understand the outcomes and evidence requirements of the Unit Standard including any special notes, references and definitions applicable. The study guide is your main resource for this assessment.
You should read the study guide for this unit standard (as part of your course work) to enable you to be able to answer the tasks listed in this assessment document.
student where needed.
ReferencesThis list is provided as a guide for students who are seeking further sources of information on this module.
Code of Banking Practice 2018;
Code of Professional Conduct for Financial Advice Services;
Consumer Guarantees Act 1993;
Fair Trading Act 1986;
Financial Advisers Act 2008;
Financial Advisers (Disclosure) Regulations 2010;
Financial Markets Conduct Act 2013;
Financial Service Providers (Registration and Dispute Resolution) Act 2008;
Financial Services Legislation Amendment Act 2019;
ISO 22222:2005 Personal Financial Planning Requirements for personal financial planners, available from https://www.iso.org;
Privacy Act 1993;
Trustee Act 1956;
and all subsequent amendments and replacements.
Student Declaration FormComplete and attach to your assessment answers before submitting for assessment
Full Name NSN Number Contact
Details Organisation Phone Email Unit Standard 31855 v1 Date Submitted The Tasks you submit for assessment must be your own work and cannot be completed by another person. Initial each item on the list below to show you have read and understood the requirements of the assessment and that the submitted work is your own then sign the declaration.
Your own work means it cannot be copied from course materials or other text, either hard or electronic copy. Your answers must be in your own words.
I (full name) understand: Initial
The assessment guidance How I will be assessed and what is expected of me What information or material is required to be submitted for assessment That, if it is found that the answers submitted is not my own work further action may be taken which may include, but is not limited to, termination of my enrolment with Professional IQ College and may result in removal of any credit achieved from my Record of learning with NZQA. No refund for fees will be paid. The appeals process should I wish to appeal the assessment decision I am aware that the evidence I submit may be subject to the quality assurance process of Professional IQ College and the Skills Organisation I certify that:
All the work in the assessment submitted is my own and uses my own words. No work has been directly copied from other sources All sources used to prepare this assessment have been appropriately referenced where applicable When necessary, I have removed identifiable client information to protect client confidentiality All of my work complies with the policies, procedures and requirements of my organisation and professional bodies I belong to. All of my work complies with any relevant legislative, regulatory and professional codes of practice I agree where my employer has paid for my course a copy of my results may be made available to them I agree for my information to be shared with Ringa Hora Services Workforce Development Council (RHSWDC), the New Zealand Qualifications Authority (NZQA) and the Ministry of Education (MoE) for the purposes of moderation to ensure consistency and for verifying, recording and management of results.
Signed: Date: Assessment TasksAnswer all the following questions in the blue shaded cells and save your assessment document with a new name e.g. 31855 John Smith 17 August
Task 1 (US 31855 PC 1.1)In this task, you are required to demonstrate your understanding of the background to the current regulatory environment for financial services in New Zealand.In approximately 500 words in the Answer Box below, describe the background that has led to the New Zealand regulatory environment. In your answer, you will need to include reference to the relevance of at least:
one local agency
one international agency
one local event
one international event.
The current regulatory environment includes the following legislation:
Financial Advisers Act 2008*
Financial Advisers (Disclosure) Regulations 2010
Financial Markets Authority Act 2011
Financial Markets Conduct Act 2013
Financial Service Providers (Registration and Dispute Resolution) Act 2008
Anti-Money Laundering and Countering Financing of Terrorism Act 2009
* While the Financial Advisers Act will be/has been replaced by the Financial Services legislation Amendment Act, the Act still remains relevant as a consequence of the events leading to the overhaul of the financial services regulatory framework.
Answer Box: Task 1 (US 31855 PC 1.1):
Insert Your Answer here:
Task 2 (US 31855 PC 1.2)In approximately 100 words, explain the hierarchy of the financial services framework. Your answer needs to include:
legislation
regulations
principles of professionalism
good conduct
Answer Box: Task 2 (US 31855 PC 1.2)
Task 3 (US 31855 PC 2.1, 2.2, 2.3 and 2.4)In this task you are required to demonstrate your knowledge of the applicability and impact of New Zealand financial services legislation relevant to the daily operation of financial services providers, financial advisers or nominated representatives.
Please complete your answers in the table below; each response should be 2-3 examples or bullet points. You need to provide sufficient information to demonstrate the impact of the legislation and what you do or could do to demonstrate complying with your obligations.
(see table over page)
Answer Box: Task 3 (US 31855 PC 2.1, 2.2, 2.3 and 2.4)
Legislation or regulation Compliance requirements of the legislation or regulation (key points of the legislation) Daily work activity that is constrained or required by this legislation or regulation (what do you do that ensures you comply with your obligations) Formal and informal consequences of non-compliance
(at least one of each to be provided by each Act)
Consumer Guarantees Act 1993 Fair Trading Act 1986 Financial Markets Conduct Act 2013 as amended by the Financial Services Legislation Amendment Act 2019 Financial Services Providers (Registration and Disputes Resolution) Act 2008 Privacy Act 2020 Code of Professional Conduct for Financial Advice Services Task 4 (US 31855 PC 3.1)
PLEASE READ THE GUIDANCE NOTE BELOW BEFORE ANSWERING THIS TASK
The purpose of this assessment task is to demonstrate how you apply best practice and professionalism when providing services to clients.
Read the scenario below, then:
Comment on each of the ethical considerations below (for example, explain the ethical consideration)
Explain where you believe this adviser has met or not met the obligation. You will need to reference relevant Code Standards and legislation/regulations in your answer.
Describe the good and ethical practice you would apply if this was your interaction with this client:Answers to 1 & 2 above must be given under each heading for a-h, and not as a separate essay
Adopting best practice processes
Maintaining confidentiality
Meeting duty of care
Adopting non-discriminatory practices
Making full disclosure of remuneration and fees and other conflicts of interest that may influence any recommendation where required
Acting in good faith
Remaining within your field of competence
Managing client information to meet appropriate standards
119416240294Guidance note the scenario outlined in this task contains a significant level of complexity, and students need to be able to demonstrate that they have a high degree of understanding of what is possibly one of the most important tasks in all of Core Knowledge. After all, acting ethically and maintaining good conduct underpins every action you as a financial adviser undertake every day. Before starting this task, students are strongly advised to:
Ensure that you have a thorough understanding of pages 28 to 39 of the Study Guide covering Financial Services Best Practices and Professionalism, which provides the correct direction on what factors should be covered within each of the eight ethical and conduct questions contained in this task.
Have open the Code of Professional Conduct for Financial Advice Services for reference before attempting to answer sections A to H. Click on this link to open - https://financialadvicecode.files.wordpress.com/2021/03/codeofprofessionalconduct-march2021.pdf
It is suggested that you make notes of where the financial adviser has complied and not complied with the code standards before starting to answer the task.
It is a pre-requisite for achieving this task that for each factor considered the actual code standard(s) breached are noted e.g. code standards 1, 2 & 3, or code standard 5. Do not use a scatter gun approach but think carefully about your choice of code standards selected which must relate to your answer for each section.
Ensure that you say what you would have done if faced with the same circumstances for all sections.
00Guidance note the scenario outlined in this task contains a significant level of complexity, and students need to be able to demonstrate that they have a high degree of understanding of what is possibly one of the most important tasks in all of Core Knowledge. After all, acting ethically and maintaining good conduct underpins every action you as a financial adviser undertake every day. Before starting this task, students are strongly advised to:
Ensure that you have a thorough understanding of pages 28 to 39 of the Study Guide covering Financial Services Best Practices and Professionalism, which provides the correct direction on what factors should be covered within each of the eight ethical and conduct questions contained in this task.
Have open the Code of Professional Conduct for Financial Advice Services for reference before attempting to answer sections A to H. Click on this link to open - https://financialadvicecode.files.wordpress.com/2021/03/codeofprofessionalconduct-march2021.pdf
It is suggested that you make notes of where the financial adviser has complied and not complied with the code standards before starting to answer the task.
It is a pre-requisite for achieving this task that for each factor considered the actual code standard(s) breached are noted e.g. code standards 1, 2 & 3, or code standard 5. Do not use a scatter gun approach but think carefully about your choice of code standards selected which must relate to your answer for each section.
Ensure that you say what you would have done if faced with the same circumstances for all sections.
Your answer should be approximately 200 words for each ethical consideration
Scenario
You are a Financial Adviser, giving advice under another entitys license. You sell personal (life and health) and general insurances. You are studying the investment strand but have not yet completed all of the requirements. It is your intention to add KiwiSaver investments to your list of products and services in six months once you have completed all your assessments and can demonstrate meeting your obligations under Code Standards 6-8.
Huia and Joey are referred to you by an accountant. You have a good relationship with the accountant and have received a large number of very good referrals from him in the past. Joey works for the accountant as a manager. In the first meeting, Huia and Joey explain that they would like to discuss a comprehensive financial plan including saving, debt repayment, personal insurance, general insurance and KiwiSaver. They own a home with a mortgage and 2 cars. They have two young children. They want to make sure they have all the protection they need for the future.Huia and Joey meet up with you in your office. All your work in progress files are on your desk. You hurriedly put them into a drawer, as you dont want them to see any other client information. Your computer screen is not locked, as you thought you had a recent data breach, and were checking your malware at the time Huia and Joey came into the office.
You complete the correct disclosures and data collection procedures for Huia and Joey and explain your fees in general, saying you receive commissions. You tell them that you are currently qualified to advise them on personal and fire and general insurances only.
You mention that you mostly sell ABC product for personal insurances and XYZ product for fire and general because they both have excellent claims payout and very good financial strength ratings. You say that, even though you prefer those insurers, you are able to look at a wide range of insurances and so, you are really an independent adviser.
During the discussion, Joey mentions he has had mild depression but has never seen any specialists nor been on medication. He says he just gets unhappy sometimes and takes the odd day off work to de-stress.
While doing your analysis later, you find that your preferred product suppliers are very good on price, a key consideration for Huia and Joey, and excellent in terms of policy wordings. The only issue you have is that the personal insurance company has strong exclusions for mental health. You want to get a better idea on how bad the depression is, so you ring the accountant and talk about how many days Joey has had off and how this has affected his work. He states that it is really fine; he works very hard and so deserves flexibility at times when he feels overwhelmed. You decide to recommend your preferred product suppliers in your Statement of Advice.
You meet again with Huia and Joey. The presentation goes well and they accept all your recommendations. They sign up all of the documentation. When Joey asks about the depression thing, you ask them if it is recorded on their doctors records. They say no, so you say dont worry about it.
When completing the forms for the fire and general insurance, you note that they dont have an alarm system or any garaging for the cars right now but Huia and Joey say they intend to put up a double garage and install alarms in the next 12 months. So you tell them to put down that they have both the garage and an alarm system as long as they promise to do it as soon as they can.
Everything goes through the insurers OK. The personal insurer accepts the personal insurance applications as clean skin risks. The fire and general insurance applications are accepted as good risks.
You receive your commission from both companies and a free trip to Fiji for hitting your sales targets with one of the providers.
After 6 months Joey calls and says they are very happy and can you please now talk to them about KiwiSaver. You have started but have not completed the investment strand of the qualification but you say yes and help them implement a KiwiSaver scheme investment. You think that as you are going to complete the strand in 2-3 months anyway so it will be fine.Answer Box: Task 4 (US 31855 PC 3.1):
Ethical Considerations & Legislation Code of Conduct Standards Students Ethical Approach
Adopting Best Practices Confidentiality Duty of Care Non-Discriminatory Practice Disclosure of fees and other conflicts of interest Acting in good faith Remain within field of competence Managing client information Insert Your Answer here:
Task 5 (US 31855 PC 3.2)Identify at least two methods for providing information to clients and describe what type of information could appropriately be provided to clients using each method. You will need to reference the following considerations in your answer:
Clients cultural background
Clients level of financial understanding
Nature and scope of advice to be provided
Answer Box: Task 5 (US 31855 PC 3.2):
Insert Your Answer here:
Task 6 (US 31855 PC 4.1 and 4.2)In this task you are required to demonstrate your understanding of the six-step process, by describing the activities that would usually take place within each step, why each activity is important and the contribution the activity makes to providing fit for purpose client solutions. To complete this assessment task, please complete the table below with your answers.
Answer Box: Task 6 (US 31855 PC 4.1 and 4.2)
Advice Process Step Activities within the step (at least three KEY activities for each step) Importance and Contribution of each activity (minimum of 100 words in total)
Establish and define the relationship Collect information and define goals Analyse and evaluate the information Develop recommendations and present to the client Implement the recommendations Monitor and review the recommendations Assessment Decision FormThe Assessment Decision Form is completed by the assessor and the results will be returned to you within 10 working days of receipt by the assessor of your assessment. Assessment Schedule
Unit Standard 31855 v1 Level 5 Credits 10 Unit Standard
Title Demonstrate and apply knowledge of financial services good conduct, professionalism, and recognised advice process
Student Name: Date Assessed: Outcome 1: Demonstrate knowledge of the background to the financial services regulatory environment and its framework.
Task C NYC Assessor Feedback Further Evidence Required Result Outcome Performance Criteria Range
1 1.1 Describe the background to the existence of the regulatory environment for financial services in New Zealand Includes the influence of both local and international events and agencies.
2 1.2 Contrast the authority of provisions of legislation, regulations, principles of professionalism, and good conduct in relation to the hierarchy of laws. Outcome 2: Demonstrate and apply knowledge of legislation and regulations and their impact in general financial services context.
3 2.1
Explain provisions of legislation and regulations that impact the daily operations of financial services providers 3 2.2 Apply provisions of legislation and regulations that impact the daily operations of financial services providers. 3 2.3 Describe compliance requirements of relevant legislation and regulations and apply the provisions in a general financial services context. 3 2.4 Evaluate legislation and regulations common to financial services in terms of consequences of non-compliance. Consequences may be both formal and informal.
Outcome 3: Apply good conduct and the principles of professionalism in a general financial services context.
4 3.1 Apply good conduct and principles of professionalism when providing services to clients. May include but is not limited to adopting best practice processes, maintaining confidentiality, meeting duty of care, adopting non-discriminatory practices, making full disclosure of remuneration/fees and other conflicts of interest that may influence any recommendation where required, acting in good faith, remaining within ones field of competence, managing client information to meet appropriate standards.
5 3.2 Present financial advice that is suitable for the client, in a format appropriate for the audience and the nature of the information. Appropriate formats may include but are not limited to considerations relating to clients cultural background, clients level of financial understanding, nature and scope of advice to be provided.
Outcome 4: Demonstrate knowledge of the financial advice Six Step Process.
6 4.1 Describe the activities that take place in each step of the Six Step Process. 6 4.2 Explain the importance and contribution of each step in providing fit-for-purpose client solutions. Student Declaration received Y N Further Evidence Required C NYC Reassessment Assessor Decision Verification Declaration received Y N Date of Further Evidence Required Date of Reassessment Assessment
Decision Competent
Assessor Feedback:
Not Yet Competent Assessor Name: Signature: Date:
For office use only (to be completed in house)
Note to Administrator (Update records of learning / Update NZQA and PIQ College Records accordingly)
Notes for Assessor and Internal Moderation (When Further Evidence Required is returned a second time and still does not contain evidence of competency then Assessor to consider judgement as Not Yet Competent)
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