Diploma of Finance and Mortgage Broking Management (FNS50322) cheat sheet

Relationship lifecycle: identify referral sources, establish contact, formalise expectations in writing, service, review, and exit or renew.

A referral arrangement should record scope, consent, fees or commissions, confidentiality, and complaint handling before any client information is shared.

Consent to share personal information must be informed, current, and recorded; Australian Privacy Principle 6 limits use and disclosure to the primary purpose.

Conflict-of-interest register entries state the interest, the affected party, mitigation, and reviewer; soft-dollar benefits and asset-based rewards are common entries.

Service standards are measurable: response time, settlement update frequency, annual review timing, and escalation contact.

Business development pipeline metrics: referral conversion rate = settled loans / referrals received; referral volume alone is not a performance measure.

Professional networks require reciprocity: track referrals given and received, and disclose any payment for introductions.

Exit or transfer of a client relationship requires written notice, return of documents, and a handover record retained per licensee policy.

Application pack: identification, privacy consent, fact find, income evidence, liabilities, asset statements, property contract, and lender-specific declaration.

Serviceability buffer: lenders assess at the higher of the product rate plus a 3.00 percentage point buffer or the lender's floor rate, per APG 223.

Genuine savings evidence typically requires three months of statements showing accumulation, not a lump sum held for a short period.

Rental income is commonly shaded to 80% of gross for servicing; negative gearing benefits are generally excluded from servicing income.

Deposit and funds-to-complete calculation: purchase price plus stamp duty, legal fees, and lender fees minus loan amount minus verified savings.

Lender policy varies on casual and self-employed income; two years of notices of assessment plus recent business statements is a common benchmark.

Application errors to check before submission: name mismatch with ID, undisclosed liabilities on the credit file, and unexplained account credits.

Record retention: application evidence and advice records are kept for seven years under the Corporations Act and NCCP record-keeping obligations.

Fact find covers objectives, financial position, existing arrangements, risk tolerance, time horizon, and special circumstances such as guarantors.

Needs are ranked into must-have, prefer, and trade-off categories before products are shortlisted.

Product comparison must use like-for-like data: comparison rate, total fees over the intended holding period, and features actually used.

The comparison rate includes most upfront and ongoing fees but excludes government charges, redraw fees, and early repayment fees.

Present at least two viable options where available, with a documented reason if only one is suitable.

The recommendation links each client objective to a specific product feature and states the cost of that feature.

Disclose commissions, fees payable by the client, and any lender or aggregator incentives in writing before the client decides.

Client acknowledgement of the chosen option and the alternatives declined is recorded and retained with the advice file.

Special circumstances include prior defaults, bankruptcy, self-employment, casual or contract income, no-deposit borrowers, and older borrowers near retirement.

Credit file correction: a written correction request to the credit reporting body requires the lender to respond within 30 days.

Default listings generally remain for five years; bankruptcy information remains on file for five years from discharge or the date of the bankruptcy.

Low-documentation lending is restricted; lenders require alternative verification such as business transaction statements and accountant's declarations.

Guarantor structures: a limited guarantee caps exposure, and the guarantor must receive independent legal advice.

Lenders Mortgage Insurance is generally required above 80% loan-to-value and premiums can be capitalised into the loan.

Non-conforming or specialist lenders price for risk; compare the total cost over the exit horizon rather than the headline rate.

Elderly borrower applications require a documented exit strategy, such as sale of a property or verified superannuation lump sum.

Explain the credit impairment in plain language, including how long it stays on file and what the lender will require.

Present the specialist option alongside a mainstream option where the mainstream option is achievable after remediation.

Show the cost of the special-circumstance route: higher rate, fees, insurance premium, and any restriction on refinancing.

Disclose the consequences of default and the enforcement process, including notice periods before possession proceedings.

Guarantor conversations must be separate from the borrower conversation so the guarantor can consider the risk independently.

Document the client's stated preference and reasons, including where the client declines the recommended option.

Provide a written summary of obligations: repayment amount, frequency, and what triggers a variation or default.

Vulnerable clients require an interpreter or support person where needed, and the record should note the assistance provided.

Structure types include split loans, offset accounts, interest-only periods, line-of-credit facilities, trusts, and company borrowers.

Offset account balance reduces interest calculated daily; redraw reduces the loan balance and is a lender discretion, not a separate account.

Trust borrowing requires the trustee as borrower, a guarantee from the trustee company and directors, and review of the trust deed borrowing powers.

Interest-only terms typically run one to five years; reverting to principal and interest increases repayments and must be explained upfront.

Cross-collateralisation links securities; releasing one property requires the remaining security to satisfy the lender's loan-to-value limit.

Fixed-rate break costs apply when the loan is repaid early and the wholesale rate has fallen since fixing; the formula is lender-specific.

Split loans allow part fixed and part variable; the split percentage should match the borrower's forecast surplus funds.

Settlement sequencing for construction or multiple securities requires a disbursement schedule and evidence of progress before each drawdown.

Credit licensees and credit representatives must act efficiently, honestly, and fairly and comply with the National Credit Code.

Responsible lending requires reasonable inquiries into the client's requirements and objectives and into the client's financial situation.

Best interests duty applies to mortgage brokers; the recorded advice must show why the recommendation is in the client's best interests.

Conflicts priority rule: where a conflict exists, the client's interests must be prioritised over the broker's, aggregator's, or lender's.

The National Credit Code allows a hardship notice; the credit provider must respond within 21 days and may agree to a variation.

Advertising and comparison rates must comply with the Consumer Credit Code pricing provisions and the comparison rate schedule.

Anti-money laundering obligations require customer identification, beneficial ownership checks, and suspicious matter reporting.

Breach reporting: significant breaches must be reported to the regulator within 30 days of the licensee becoming aware.

Professional practice includes competence maintenance, supervision, records management, and adherence to the licensee's policies.

Continuing professional development is recorded with date, activity, provider, and hours, and is audited by the licensee.

File notes should be contemporaneous, dated, and factual; opinions are labelled as opinions.

Delegation does not transfer accountability; the broker remains responsible for work performed by assistants.

Complaints must be acknowledged and resolved within the licensee's internal dispute resolution timeframe, then escalated to the external dispute resolution scheme.

Confidentiality applies to client data in all formats, including email, cloud storage, and mobile devices, and to disposal of records.

Professional indemnity insurance must be maintained at the level required by the licensee and disclosed on request.

Conflicts between employer policy and client interest are escalated in writing to a supervisor before proceeding.

Ethical decision steps: identify the facts, the stakeholders, the relevant rules, the options, the consequences, then decide and record the reasoning.

Consequentialist reasoning weighs outcomes; deontological reasoning tests duties and rules; virtue reasoning asks what a person of good character would do.

Ethical tests to apply: the disclosure test, the reciprocity test, the legacy test, and the 'would I be comfortable if published' test.

Conflicts of interest are managed by avoidance, disclosure, or controls; disclosure alone does not remove a conflict.

Gifts and hospitality are recorded in a register with value, source, and approval, against the licensee's threshold.

Confidentiality may be overridden only by law, court order, or client consent, and the decision is documented.

Whistleblowing protections apply to disclosures about misconduct; the reporter's identity is kept confidential where the law allows.

Ethical culture is evidenced by escalation records, complaint themes, and consistent treatment of similar cases.

Risk identification techniques include process walk-throughs, checklists, incident reviews, scenario analysis, and stakeholder interviews.

Risk register fields: risk description, cause, consequence, likelihood, impact, rating, owner, control, and review date.

Risk rating = likelihood times consequence, mapped to a matrix; residual risk is assessed after controls are applied.

Control types: preventive, detective, and corrective; a single control should not be relied on where the consequence is severe.

Key risks in broking include unsuitable advice, data breach, fraud, settlement delay, lender policy change, and aggregator dependency.

Risk appetite states the level of risk the licensee accepts; risk tolerance is the acceptable variation around that appetite.

Fraud indicators include altered payslips, inconsistent signatures, and third-party pressure to settle quickly.

Risk treatment options are avoid, reduce, transfer (including insurance), and accept, each with a documented rationale.

Common electives include FNSFMB513, FNSFMB514, FNSRSK511, FNSINC514, and units covering commercial lending or team performance.

Elective selection must satisfy the packaging rules of FNS50322, including any prerequisites and the required number of units.

Commercial lending electives add cash-flow lending analysis, security valuation, and covenant assessment.

Risk electives add business continuity planning, incident response, and third-party risk assessment.

Leadership electives add performance planning, coaching records, and team KPI reporting.

Unit completion evidence includes assessment records, workplace documents, and third-party reports where required.

Recognition of prior learning requires mapping evidence to the unit's performance criteria and knowledge evidence.

Credit transfer is recorded against the unit code and the training package version in force at enrolment.