Section 3: The lending process

Task 12 ― Understanding the client’s needs

Brokers have both ethical and legislative obligations to understand a client’s needs and objectives. There are obligations for making reasonable inquiries and verifications under NCCPs responsible lending obligations contained in ASIC’s Regulatory Guide 209 (RG209).

Research RG209.43 online and answer the following questions.

Task 12: Question 1

While it is important to understand your client’s needs and objectives to ensure that you recommend a product that has all of the features and benefits they require, it is also important to understand other requirements your client may have to ensure the product recommended is ‘not unsuitable’.

List at least four (4) types of ‘specific customer requirements’ your client may have. 

Hint/Tip:

Refer to your topic notes and/or conduct your own research.

Choose requirements that may not necessarily be a product feature, for example, a client may want a lender that they can visit or may need to sell the property in a specific time frame.

Task 12: Question 2

When the loan is for a self-employed person, the lender will ask for financial information for the business. What are the common financial records the lender will ask for? Provide a minimum of three (3). (These must be in addition to what a PAYG client would provide.)

Task 12: Question 3

(a) Explain the information that is contained in a credit report.

(b) Why it is important that the client provides all the details about their credit report to their broker at the beginning of the loan process?

(c) What are the credit provider’s obligations to the client if a loan is declined due to their credit report?

(d) What would you advise your client to do if their loan was declined due to their credit report?