31856 Demonstrate and Apply Knowledge of the Financial Services Sector to Provide Financial Advice Solutions Assessment 2026

31856 Assessment Tasks

Answer all the following questions in the blue shaded cells and save your assessment document with a new name with the unit standard number, your name and the date e.g. 31856 John Smith 17 August.

Task 1 (US 31856 PC 1.1)

In approximately 150 words in the Answer Box below, explain the role of each of the following financial market participants: 

• Share market
• Bond market
• Tax system
• Insurance market
• Lending services

Task 2 (US 31856 PC 1.2)

In this task you are required to demonstrate understanding of the operation of financial markets.  For each market participant listed below, describe in approximately 100 words in the Answer Box, their purpose and role.

Institutional market participants:

• FMCA licensed participants
• Insurance companies
• Reinsurance companies
• Trustee corporations
• Licensed supervisors
• Reserve Bank of New Zealand
• Financial Markets Authority
• AML/CFT supervisors
• Licensed and unlicensed participants
• Financial Advice Providers

Individual market participants:

• Financial Advisers
• Nominated Representatives

Task 3 (US 31856 PC 2.1)

In this task, you are required to describe each financial services product used by retail and wholesale clients.

Please complete your answers in the Answer Box below.

Task 4 (US 31856 PC 2.2)

This task requires you to identify key aspects of the creation, operation and uses of common estate planning tools.

Relate your answer to the scenarios provided for each of the estate planning tools. Please assume for all scenarios you are able to give basic advice.

a) Wills

In relation to the following scenario, outline the key aspects of the:

• creation of a will (explain the key points to putting in place a valid will)
• operation of a will (explain the key legislation that affects the operation of a will)
• use of a will (contrast the situation of not having a will in place with having a will in place).

You will need to refer to the four relevant Estate Planning and Property Relationship laws in your answer.

Your answer should be 400-500 words.

Scenario

Carol and George come to you for some advice. They are married with two young children and have a new home with a mortgage. They have no wills, enduring powers of attorney or trusts in place.

Carol’s mother has just died and left Carol $150,000. Carol is unsure what to do with the cash so has put it into a separate bank account for a while. Her first thought is to use it for the two children and their education but she is wondering if it should go against the mortgage as well.

Carol’s youngest sister has been left out of the will and is angry, saying she is going to contest it. She had a falling out with her mother six months prior to her death and her mother consequently changed the will. Carol wants to know if her sister can contest the will or not, in case she has to give back some of the money.

Carol’s mother also had a housekeeper who looked after her full time in the last two months of her life. Carol’s mother promised to leave her the Llardro porcelain collection in recognition of her help. The will did not reflect this.

b) Enduring Power of Attorney

In relation to the following scenario, outline the key aspects of the: creation, operation and use of an enduring power of attorney.

Your answer should be 400-500 words long.

Scenario

Sam comes to you for advice on his situation. He is widowed, with one son aged 30 who is married and has two children of his own, Sam’s grandson (7) and granddaughter (9).

Sam is not in the best of health physically and is also forgetting things more and more. He is considering his future ability to remain living on his own in his home and maybe moving to a rest home in the next 12 months.

Sam is unsure how to allow for his daughter-in-law in his affairs. He does not get on with her and would prefer to leave any decisions to his son. He is not sure if his son’s marriage will last so doesn’t want his daughter-in-law involved.

c) Asset Ownership

In relation to the following scenario, outline the key aspects of the creation, operation and use of asset ownership (referencing individual, company and trust ownerships and how assets of each of these are distributed).

In your answer you should discuss:

• The creation, operation and use of a trust, including how assets are distributed.
• How individual assets (Mingyu’s classic car) would be distributed after her death.
• How Zhao and Mingyu could ensure that Mingyu’s brother could take over the business if anything were to happen to them.

Your answer should be 400-500 words.

Scenario

Zhao and Mingyu have many investments, including a share portfolio, rental properties and term deposits owned under the name of their family trust. In addition, Mingyu has a classic car that her father bought for her when she was younger.

Zhao and Mingyu are the only directors and shareholders of their limited liability business.  Both Zhao and Mingyu have other brothers and sisters, nephews and nieces but no children of their own.

They want to make sure they equalise any distributions on death fairly across family members. They want their family business to go to Mingyu’s younger brother, who has been employed in the business for ten years.

Task 5 (US 31856 PC 2.3)

In this task, you are required to demonstrate your understanding of taxation measures by completing the following table.

Task 6 (US 31856 PC 3.1 and 3.2)

In this task you are required to demonstrate an understanding of how to match financial services and products to a client’s needs.

Based on the scenario provided, answer the following questions:

1. Identify the main financial products or services and issues that you consider the clients will need or should be considering.
2. Identify two markets and two market participants the clients will most likely use to meet their product and service needs.
3. Using the financial products and services in tasks 3 and 4, identify the three financial products most suited to their current needs/risks and explain why this product is most suited.

In 3-4 sentences for each of the three products you recommend, explain why your recommended solution is appropriate.

Scenario

Steve and Sangita are a young couple with no dependents. Steve is in his last year of an architecture degree, while Sangita is working as a physiotherapist. As a full-time student, Steve has no income and they are relying on Sangita’s salary until Steve graduates. Both have student loans, but no other debt.

They have just moved into their first rental property together. They have relied on public transport until now but to afford the rental, they need to move out of the central city. They have $5000 in savings but don’t want to use all of this for a car, as they would rather have some back-up funds. They think they will buy a house one day but are more interested in travelling in the short term.

31856 Outcome

Title – Apply knowledge of financial, markets, systems, participants and products/services to provide financial advice solutions

Outcome 1: Demonstrate knowledge of financial markets, systems, and market participants.

1.1 Describe financial markets and systems and explain their roles.

Range: Financial markets and systems may include but are not limited to – share market, bond market, tax system, insurance market, lending services, blockchain.

1.2 Describe the roles of participants in financial markets and systems.

Range: Institutional participants may include but are not limited to – FMCA Licensed market participants, insurance companies, reinsurance companies, trustee corporations, licensed supervisors, RBNZ licensed and unlicensed participants, FMA, AML/CFT Supervisors, financial advice providers; individual participants may include but are not limited to – Financial Advisers, Nominated Representatives.

Outcome 2: Demonstrate knowledge of financial products and services.

2.1 Describe common types of financial products and services used by retail and wholesale customers.

Range: may include but is not limited to – general insurance; life, disability and health insurance; direct investments; managed investments; banking (cash, deposit, and transaction products); residential property lending; personal consumer lending; personal trustee services.

2.2 Outline key aspects of the creation, operation, and uses of common estate planning tools and applicable law.

Range: may include but is not limited to – Wills, asset ownerships (Individual, Company, Trust), Enduring Powers of Attorney.

2.3 Outline key aspects of the applicability of taxation relevant to financial services.

Range: may include but is not limited to – PAYE, withholding tax, GST, personal tax rates, company tax, Prescribed Investor Rate, Fringe Benefit Tax.

Outcome 3: Apply knowledge of financial markets, systems, participants, and services and products to provide financial advice solutions in a general financial services context.

3.1 Select appropriate financial advice solutions using broad knowledge of financial markets and systems, market participants, and common types of financial services and products.

3.2 Justify selected financial advice solutions.

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