NZQA Expiring unit standard
25649 version 3
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Title
Apply principles of investment advice
Level
5
Credits
7
Purpose
People credited with this unit standard are able to:
–
develop investment strategies for clients of financial
advisers;
–
quantify cashflow requirements to implement investment
strategies; and
–
develop an investment plan using appropriate investment
and financial strategies relevant to the client’s personal
situation.
Classification
Financial Services > Financial Advice
Available grade
Achieved
Entry information
Critical health and
safety prerequisites
Unit 25648, Demonstrate understanding of investment
concepts used by financial advisers, or demonstrate equivalent
knowledge and skills.
Explanatory notes
1
This unit standard may be assessed on job in the workplace using naturally occurring
evidence or in off job simulated work situations designed to draw upon similar
performance to that required in work in a financial services context.
2
References
Commerce Act 1986;
Companies Act 1993;
Consumer Guarantees Act 1993;
Credit Contracts and Consumer Finance Act 2003;
Electronic Transactions Act 2002;
Fair Trading Act 1986;
Financial Advisers Act 2008;
Financial Reporting Act 1993;
Financial Service Providers (Registration and Dispute Resolution) Act 2008;
Financial Transactions Reporting Act 1996;
Health and Safety in Employment Act 1992;
Human Rights Act 1993;
Income Tax Act 2007;
KiwiSaver Act 2006;
New Zealand Bill of Rights Act 1990;
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
25649 version 3
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NZ IFRS (New Zealand Equivalents to International Financial Reporting Standards)
available from http://www.nzica.com;
Privacy Act 1993;
Reserve Bank of New Zealand Act 1989;
Securities Act 1978;
Securities Markets Act 1988;
Superannuation Schemes Act 1989;
Trustee Act 1956;
industry codes of practice;
and all subsequent amendments and replacements.
3
All activities must comply with any policies, procedures, and requirements of the
organisations involved; the standards of relevant professional bodies including codes
of ethics; and any relevant legislative and/or regulatory requirements.
4
Definitions
Effectiveness – gives an optimal result in balancing investment risk and return.
Financial situation – incorporates variables such as a client’s balance of assets,
liabilities, incomes, risks, needs and expectations.
Financial solution – recommendations on use of particular financial products and/or
services to fit the financial strategy.
Financial strategy – broad plan that accords with client’s stated goals, needs,
priorities, financial situation and risk profile, in a particular situation.
Investment strategy – specific plan that combines elements such as a planned
investment portfolio and cashflows as a component of the overall financial strategy.
Personal situation – incorporates variables such as a client’s personal relationships
and obligations, lifecycle stage, overall objectives, level of financial literacy.
Qualitative measures – concepts of quality based on variables such as fund
management structures, fund manager’s investment approach, client service
standards, product entry/exit fees and rules.
5
Range – evidence relating to a minimum of three investment clients is required to
cover a representative range of needs, strategies and products.
6
The investment plan created may be for purposes such as a savings or retirement
plan.
Outcomes and evidence requirements
Outcome 1
Develop investment strategies for clients of financial advisers.
Evidence requirements
1.1
Client financial situation is analysed, quantified, and compared to personal
situation.
1.2
Client risk profile is identified, analysed and used to develop investment
strategies that provide an appropriate financial solution for the client, taking into
account the taxation characteristics of types of investments.
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
Range
1.3
risk profile includes – risk factors and return expectations,
tolerance to risk, appetite for risk and return, volatility of income
and capital, access restriction on product, investment term;
types of investments include – direct and managed investment,
local and international investment.
Investment information resources are reviewed, evaluated and used to develop
investment strategies for the particular situation.
Range
1.4
25649 version 3
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resources include but are not limited to – research, financial press,
daily media, investment statements and prospectuses, product
provider summaries and performance charts.
Investment strategies developed are evaluated for effectiveness for the
particular situation, using appropriate quantitative analysis techniques.
Outcome 2
Quantify cashflow requirements to implement investment strategies.
Evidence requirements
2.1
Client cashflow requirements to implement investment strategies are quantified
by the application of time value of money calculations.
Range
includes but is not limited to – present value of a future lump sum,
present value of a future cashflow, future value of a current lump
sum, future value of a cashflow, regular payment to create future
value, regular payment from a current lump sum, internal rate of
return.
Outcome 3
Develop an investment plan using appropriate investment and financial strategies relevant
to the client’s personal situation.
Evidence requirements
3.1
Financial products and/or services are identified in relation to meeting the
investment strategy.
3.2
Financial products and/or services are evaluated for effectiveness using
qualitative measures and quantitative analysis techniques.
3.3
Changes in financial markets and the economic environment are evaluated with
respect to their effects on existing investment strategies in relation to a client’s
risk profile and objectives.
Range
The Skills Organisation
SSB Code 100401
changes include but are not limited to – economic and business
cycles (local and international), financial market confidence,
interest rates, exchange rates, inflation, government monetary and
fiscal policies.
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
25649 version 3
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3.4
Financial products and/or services are matched with the needs of the
investment strategy and the match is optimised by the application of quantitative
analysis techniques.
3.5
An investment plan is constructed in accordance with the investment strategy,
client’s personal situation, financial situation, risk profile, cashflow requirements,
and optimised by the application of quantitative analysis techniques.
includes but is not limited to – preparation of a Statement of
Advice covering details of the need(s), situation, and objectives
being addressed; recommendation(s); concise justification of why
the recommendation(s) is appropriate; a description of the range
of financial products, classes of financial products and strategies
evaluated; full disclosure of product fees and other costs that will
be paid by the client; any significant benefits resulting from the
client’s business the adviser is likely to receive from any party
other than the client; a description of any conflicts of interest that
may potentially influence any recommendation; use of expert
advisers (including their field of competence); highlighting any
significant conflict of interests that may require a recommendation
that the client seek independent professional advice; where the
recommendation includes replacement of any product, comparison
of the benefits of the new and replacement product, which
includes disclosure of the remuneration to the adviser, the cost to
the client (such as exit fees or penalties, entry fees and
implementation fees); any regulatory or legal requirements.
Range
This unit standard is expiring. Assessment against the standard must take place by
the last date for assessment set out below.
Status information and last date for assessment for superseded versions
Process
Version Date
Last Date for Assessment
Registration
1
20 February 2009
31 December 2017
Review
2
12 February 2010
31 December 2017
Review
3
19 February 2015
31 December 2017
Consent and Moderation Requirements (CMR) reference
0003
This CMR can be accessed at http://www.nzqa.govt.nz/framework/search/index.do.
Please note
Providers must be granted consent to assess against standards (accredited) by NZQA,
before they can report credits from assessment against unit standards or deliver courses
of study leading to that assessment.
Industry Training Organisations must be granted consent to assess against standards by
NZQA before they can register credits from assessment against unit standards.
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
25649 version 3
Page 5 of 5
Providers and Industry Training Organisations, which have been granted consent and
which are assessing against unit standards must engage with the moderation system that
applies to those standards.
Requirements for consent to assess and an outline of the moderation system that applies
to this standard are outlined in the Consent and Moderation Requirements (CMR). The
CMR also includes useful information about special requirements for organisations wishing
to develop education and training programmes, such as minimum qualifications for tutors
and assessors, and special resource requirements.
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016