written activity 1 For this assessment, you will need to perform the following task. This task will need to be completed and submitted in a professional, word processed, format, and must be 1000 words minimum in length. Your task is to develop a risk management strategy for your financial service or one that you would like to work for. To do this you will need to:Analyse the risk factors for financial investment and insurance products in that serviceDetermine the appropriate risk exposure management strategiesCommunicate these strategies to relevant staff and intermediariesPersonally manage the risk assessment strategiesThis assessment is aimed at setting a strategy for portfolio managers, including what types of business will be targeted and not targeted.In your strategy you will need to consider the following before you develop the risk management strategy:All relevant legislation, standards, regulatory guidelines and industry sector compliance requirements. For example:Insurance Act 1873Insurance contracts Act 1984Corporations Act 2001The Australian Banking Association Code of PracticeASICS finance related consumer protection regulations and licensing regulations and restrictions for financial services providersCom Law – for all other Finance Related LegislationFinancial Transaction Reports Act 1988 (Cwlth)Anti-Money Laundering and counter-Terrorism Financing Act 2006 (Cwlth) (AML/CTF Act)Credit Act 1985 (Cwlth) and Consumer Credit (Victoria) Act 1995Cheques ActFinancial Services Reform ActSuperannuation Industry (Supervision) ActAustralian Prudential Regulation Authority Act 1998Australian Securities and Investments Commission Act 2001Financial Management and Accountability Act 1997Financial Sector (Shareholding) Act 1998National Credit ActPayment Systems and Netting Act 1998Australian Corporations Act 2004Australian Taxation ActOrganisational policy, procedures, guidelines and authorities related to risk management (you may need to determine the performance targets of the organisations capacity to assess and accept risk)Performance targets may be related to:Compliance with legislation and regulationsConsistency of the application of risk assessmentsCompliance with organisational policies and proceduresRisk mitigation figuresLevels of risk that are undertaken by the organisationPercentages of risk undertakenStrategy application for risk managementRelevant risks, including the high and low hazard financial and legislative risk areas. (you will need to access the Australian risk management standards to complete this section)Areas that are considered to be low risk will have been assessed to have:Minimal risk exposureBe compliant with current market conditionsWithin the organisations accepted level of exposureAs high hazard risk areas are those that may result in:Breaches in complianceFinancial lossLoss of market sectorLoss of other resourcesDamage to public relationsA range of other high risksActuarial and financial principles and processes related to risk exposure strategiesRelevant industry hazardsWithin the financial industry there are a range of different industry hazards and specific risk exposures that may be related to a range of business activities including:FinancialBusiness continuityExternalInternalMarketplaceRelevant risk exposures and an evaluation of those risks and hazards (you will need to identify your organisation’s business risk elements and control risk elements)Risks that products and services may cause may include:FinancialInability to recoup monies spentOrganisational imagePublic relationsCompliance issuesDetermine compliance factors and requirementsDevelop appropriate risk mitigation strategiesEstablish the risk assessment criteriaTo perform these tasks you will need to identify and collate all up-to-date information in a form that is suitable for analysis and then begin a review on this information.You will need to consider the known exposure factors and evaluate the risk acceptability factors within the context of mitigating capabilities and organisational requirements.Once you have done this you will need to:Develop risk acceptance and rejection criteriaRisk acceptance and rejection criteria will be based on:Level of Risk: The potential of a negative outcome occurring.Magnitude: The word magnitude in relation to financial risk speaks to the size and extent of the financial risk to the organisation.Volatility: The word volatility in relation to financial risk speaks to the level of uncertainty and amount of likelihood to change and by how much the risk is likely to change.It is essential to ensure that a range of strict terms and conditions are created for the risk acceptance of risk factors that are deemed to be high risk and these may include:Strict risk assessment proceduresObtaining legal adviceParameters of risk acceptanceVariables that are acceptableVariables that are not acceptableApprovals processesInformation collection processesCompliance proceduresMapping of legislative and regulatory requirementsCareful design of contingency plansRoles and responsibilitiesAccountability practicesPercentages and variants of riskPractices for diversifying riskIdentify high and low hazard financial and legislative risk areasDevelop appropriate risk mitigation strategies which may include:Policies and procedures changeChange management strategiesImplementation of contingency plansAltering actions to make up for damages causes by risksIt will then be necessary to document a clear outline of the risk acceptance strategy including:Purpose of the risk acceptance strategyGuidelines of the strategyPurpose of risk acceptance criteriaManagement structure of the frameworkRelated policiesRelated action plansRelated proceduresInformation related to how the risk acceptance strategy will be made accountableResourcesTemplatesReporting structureRecording structureLearning and development opportunitiesReview and monitoring structureThen you will need to get feedback on and finalised the risk acceptance criteria. If you are not in a workplace you will need to ask your trainer/assessor to give you feedback on your work.To complete this assessment you will require access to the following:Office equipment, technology, software and consumablesRelevant legislation, regulations and codes of practiceRelevant Australian standards relating to risk managementOrganisational and industry risk management documentation written activity 2 CHECKLIST For this assessment you will need to use the risk management strategy you have developed and think about how you would implement it. Now it is time to develop an implementation plan. Your will need to include:Management of the implementation strategyMonitoring methodsEvaluation methodsIn this strategy you will need to plan for the implementation which means deciding on a few things. To help you do this you should develop a work breakdown structure (WBS). Your work breakdown structure should include:Project management requirementsAssessing Project RiskResources managementPerformance Management and trackingProject financial managementResource AcquisitionBudgets and financial managementProject schedule and timelineContinual improvement management for the project life cycleYou will need to identify the resources your need for this task in the above section so make sure you identify all of them. These resources may include:Human Resources: This encompasses the skills, experience and knowledge as well as the time that they put in, the business owners time will be calculated in this category as well.Financial: Shares, Cash, and any other financial resourcesTechnological: these are the processes and systems or physical technological items and equipment such as specially designed software and information management systems.Physical: this encompasses all tangible physical assets such as equipment, supplies, buildings and office space.Reputation: this includes the perceptions of the organisation and can be measured by marketing and public relations budgets that may need to be up kept in order to maintain this.Then you will need to develop procedures for staff members outlining the information and requirements for implementing the strategy. These procedures/action plans may include:Financial plansPromotional strategiesResource requirementsRisk management issues and strategiesSpecific actions, initiatives and tasks to be undertakenStaffing/responsibility requirements and arrangementsTime linesCommunication strategyThe next step is to write a presentation for staff members. This may include:Presentation bookPPT slidesHandoutsIn a short report you will need to outline how you would monitor and evaluate the implementation if the risk management strategy in your workplace. This will include meetings and reviews and should indicate timelines for these meetings and reviews. These meetings should incorporate gathering of feedback so a feedback form should be developed now for this. Once you have completed this assessment you will need to collate all the information you have developed and submit it to your assessor. Please ensure you go through both written activity 1 and 2 again to ensure you have completed all aspects of this assessment.
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