Management Consulting/MBA Answers


Can you please provide me answer for the below question:

Choose any firm providing financial services and try to find out the different risks that they are exposed to while performing their day to day functions. Discuss with the officials as to how these risks are being managed. Prepare a detail Report on the Risk Management of this firm?

Involve provision of funds against assets, bank deposits, etc. Fund based income comes mainly from interest spread (the difference between the interest earned and interest paid), lease rentals, income from investments in capital market and real estate Major part of the income is earned through fund-based activities. At the same time, it involves a large share of expenditure also in the form of interest and brokerage Examples ◦ Underwriting shares, debentures, bonds, etc. of new issue ◦ Equipment Leasing ◦ Hire Purchase ◦ Bill discounting ◦ Venture capital ◦ Housing finance ◦ Insurance services
Equipment leasing ◦ A lease is an agreement under which a company or a firm acquires a right to make use of a capital asset like machinery, on payment of a prescribed fee called „rental charges‟. Long-term
Hire Purchase ◦ Hire purchase is a mode of financing the price of the goods to be sold on a future date. In a hire purchase transaction, the goods are let on hire, the purchase price is to be paid in installments and hirer is allowed an option to purchase the goods by paying all the installments
Bills Discounting ◦ Bill discounting is a short tenure financing instrument for companies willing to discount their purchase / sales bills to get funds for the short run and as for the investors in them, it is a good instrument to park their spare funds for a very short duration
Accounts Receivable Financing / Factoring ◦ A type of asset-financing arrangement in which a company uses its receivables - which is money owed by customers - as collateral in a financing agreement. The company receives an amount that is equal to a reduced value of the receivables pledged.
◦ Factoring is similar to the above with the only difference that the factoring firms purchase the receivables outright taking ownership of the receivables. The entire responsibility of collecting the book debts passes on to the factor.

Venture Capital ◦ Venture capital (VC) is financial capital provided to early- stage, high-potential, high risk, growth startup companies ◦ The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT, software, etc.
Housing Finance ◦ Housing finance refers to providing finance to an individual or a group of individuals for purchase, construction or related activities of house/flat etc. ◦ Housing loan is extended by way of term loans; for a number of years (5-20) at a certain rate of interest and against some security  
Insurance Services ◦ Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as premium
Mutual Funds ◦ A mutual fund refers to a fund raised by a financial service company by pooling the savings of the public. It is invested in a diversified portfolio with a view to spreading and minimizing the risk.
Fee based income does not involve much risk. But, it requires a lot of expertise on the part of a financial company to offer such fee-based services Examples ◦ Corporate advisory services ◦ Bank guarantees ◦ Merchant banking ◦ Issue management ◦ Loan syndication ◦ Credit rating ◦ Stock Broking ◦ M & A, Capital restructuring .
Merchant banking ◦ A merchant banker is a financial intermediary who helps to transfer capital from those who possess it to those who need it. ◦ Merchant banking includes a wide range of activities such as management of customer securities, portfolio management, project counseling and appraisal, underwriting of shares and debentures, loan syndication, acting as banker for the refund orders, handling interest and dividend warrants etc. .
Loan Syndication ◦ Similar to consortium financing. ◦ Taken up by the merchant banker as a lead manager. ◦ It refers to a loan arranged by a bank called lead manager for a borrower who is usually a large corporate customer or a government department. ◦ It also enables the members of the syndicate to share the credit risk associated with a particular loan among themselves .
Credit Rating ◦ Evaluates the credit worthiness of a debtor, especially a business (company) or a government ◦ It is an evaluation made by a credit rating agency of the debtors ability to pay back the debt and the likelihood of default ◦ Some credit rating agencies; ICRA, CRISIL, S & P, Moody‟s .
When and why does a company go in for Asset- based financing such as “Receivable financing”? What does it finance? ◦ When a company grows quickly, it often exceeds the limits of its bank lines of credit or other financing and does not yet have the historical financials many banks require to support an increase. In this case one type of asset-based financing, accounts receivable financing, can serve as an excellent financing source to bridge the gap. ◦ Accounts receivable financing is a short-term financing solution. It is used to finance short-term expenses such as payroll, materials, and other costs tied to production. ◦ Long-term expenses such as hiring of management, office or plant expansion, or the purchase of large equipment, with long-term financing solutions.

Financial services are the economic services provided by   XXXX   
Commercial banking services
The primary operations  include:
•   Keeping money safe while also allowing withdrawals when needed
•   Issuance of chequebooks so that bills can be paid and other kinds of payments can be delivered by post
•   Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property or business)
•   Issuance of credit cards and processing of credit card transactions and billing
•   Issuance of debit cards for use as a substitute for cheques
•   Allow financial transactions at branches or by using Automatic Teller Machines (ATMs)
•   Provide wire transfers of funds and Electronic fund transfers between banks
•   Facilitation of standing orders and direct debits, so payments for bills can be made automatically
•   Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account.
•   Provide internet banking system to facilitate the customers to view and operate their respective accounts through internet.
•   Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly.
•   Provide a check guaranteed by the Bank itself and prepaid by the customer, such as a cashier's check or certified check.
•   Notary service for financial and other documents
•   Accepting the deposits from customer and provide the credit facilities to them.
•   Sell Investment products like Mutual funds etc.
Investment banking serviceS
•   Capital markets services - underwriting debt and equity, assist company deals (advisory services, underwriting, mergers and acquisitions and advisory fees), and restructure debt into structured finance products.
•   Private banking - Private banks provide banking services exclusively to high-net-worth individuals. Many financial services firms require a person or family to have a certain minimum net worth to qualify for private banking services.[  Private banks often provide more personal services, such as wealth management and tax planning, than normal retail banks.
•   Brokerage services - facilitating the buying and selling of financial securities between a buyer and a seller.
Foreign exchange services
Foreign exchange services include:
•   Currency exchange - where clients can purchase and sell foreign currency banknotes.
•   Wire transfer - where clients can send funds to international banks abroad.
•   Remittance - where client that are migrant workers send money back to their home country.
Investment services
•   Asset management - the term usually given to describe companies which run collective investment funds. Also refers to services provided by others, generally registered with the Securities and Exchange Commission as Registered Investment Advisors. Investment banking financial services focus on creating capital through client investments.
•   Hedge fund management - Hedge funds often employ the services of "prime brokerage" divisions at major investment banks to execute their trades.
•   Custody services - the safe-keeping and processing of the world's securities trades and servicing the associated portfolios. Assets under custody in the world are approximately US$100 trillion.
•    Insurance
•   Insurance brokerage - Insurance brokers shop for insurance (generally corporate property and casualty insurance) on behalf of customers. Recently a number of websites have been created to give consumers basic price comparisons for services such as insurance, causing controversy within the industry.
•   Insurance underwriting - Personal lines insurance underwriters actually underwrite insurance for individuals, a service still offered primarily through agents, insurance brokers, and stock brokers. Underwriters may also offer similar commercial lines of coverage for businesses. Activities include insurance and annuities, life insurance, retirement insurance, health insurance, and property & casualty insurance.
•   F&I - Finance & Insurance, a service still offered primarily at asset dealerships. The F&I manager encompasses the financing and insuring of the asset which is sold by the dealer. F&I is often called "the second gross" in dealerships who have adopted the model
•   Reinsurance - Reinsurance is insurance sold to insurers themselves, to protect them from catastrophic losses.
Other financial services
•   Credit card machine services and networks - Companies which provide credit card machine and payment networks call themselves "merchant card providers".
•   Intermediation or advisory services - These services involve stock brokers (private client services) and discount brokers. Stock brokers assist investors in buying or selling shares. Primarily internet-based companies are often referred to as discount brokerages, although many now have branch offices to assist clients. These brokerages primarily target individual investors. Full service and private client firms primarily assist and execute trades for clients with large amounts of capital to invest, such as large companies, wealthy individuals, and investment management funds.
•   Private equity - Private equity funds are typically closed-end funds, which usually take controlling equity stakes in businesses that are either private, or taken private once acquired. Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they invest. The most successful private equity funds can generate returns significantly higher than provided by the equity markets
•   Venture capital is a type of private equity capital typically provided by professional, outside investors to new, high-growth-potential companies in the interest of taking the company to an IPO or trade sale of the business.
•   Angel investment - An angel investor or angel (known as a business angel or informal investor in Europe), is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share resources and pool their investment capital.
•   Conglomerates - A financial services company such as a universal bank that is active in more than one sector of the financial services market e.g. life insurance, general insurance, health insurance, asset management, retail banking, wholesale banking, investment banking, etc. A key rationale for the existence of such businesses is the existence of diversification benefits that are present when different types of businesses are aggregated i.e. bad things don't always happen at the same time. As a consequence, economic capital for a conglomerate is usually substantially less than economic capital is for the sum of its parts.
•   Financial market utilities - Organisations that are part of the infrastructure of financial services, such as stock exchanges, clearing houses, derivative and commodity exchanges and payment systems such as real-time gross settlement systems or interbank networks.
•   Debt resolution is a consumer service that assists individuals that have too much debt to pay off as requested, but do not want to file bankruptcy and wish to pay off their debts owed. This debt can be accrued in various ways including but not limited to personal loans, credit cards or in some cases merchant accounts.
What  are  the  different risks   faced  by  the  financial services  firms
The attraction to firms of offering an array of financial services can stem from the potential advantages of cross-selling several products to customers or from the similarity in underlying expertise and information systems used. However, from a supervisory perspective, it is important to recognize that different financial activities typically give rise to different types of underlying risks.
Common risk categories
Financial firms face four common risks: market risk, credit risk, funding risk, and operational risk.
Market risk refers to the possibility of incurring large losses from adverse changes in financial asset prices, such as stock prices or interest rates. Standard risk management involves the use of statistical models to forecast the probabilities and magnitudes of large adverse price changes. These so-called “value-at-risk” models are used to set capital against potential losses. In practice, while models provide a convenient methodology for quantifying market risks, there are limitations to their ability to predict the magnitude of potential losses. To address these limitations, firms also use stress tests that examine the impact of large hypothetical market movements on their portfolio values.
Credit risk is the risk that a firm’s borrowers will not repay their debt obligations in full when they are due. The traditional method for managing credit risk is to establish credit limits at the level of the individual borrower, industry sector, and geographic area. Such limits are generally based on internal credit ratings. Quantitative models are increasingly used to measure and manage credit risks
Funding (or liquidity) risk is the risk that a firm cannot obtain the funds necessary to meet its financial obligations, for example short-term loan commitments. Three common techniques for mitigating funding risk are diversifying over funding sources, holding liquid assets, and establishing contingency plans, such as backup lines of credit. Generally, firms set funding goals as benchmarks to measure their current funding levels, and take mitigating actions when they are below certain thresholds.
Finally, operational risk is the risk of monetary loss resulting from inadequate or failed internal processes, people, and systems or from external events . Although operational risk management is a rapidly developing field, standard risk mitigation techniques have not yet been developed.
Common risk management techniques
A key element of financial risk management is deciding which risks to bear and to what degree. Indeed, a financial firm’s value-added is often its willingness to take on specific risks. Correspondingly, risk management involves determining what risks a firm’s financial activities generate and avoiding unprofitable risk positions. Other important components are deciding how best to bear the desired risks and what actions are needed to mitigate undesired risks by shifting them to third parties.
Financial firms protect themselves from risk by setting aside funds to cover losses. Broadly speaking, these funds are known as provisions and capital. Provisions are funds set aside to cover expected (or average) losses, and capital refers to funds set aside to cover unexpected (or extraordinary) losses. Capital takes several forms on the balance sheets of financial firms, but typically it includes such items as shareholder equity. The reliance on provisions and capital varies among financial firms engaging in banking, securities, and insurance activities due to differences in their underlying risks.
Since financial firms have similar general goals regarding risk bearing, some of their risk management techniques are similar. For example, all firms have procedures to ensure that independent risk assessments are conducted and that controls are in place to limit the amount of risk individual business units take. In addition, hedging—i.e., paying third parties to take on some of the risk exposure—is common to all types of financial activities. Market risk is the easiest to hedge, because of the wide variety of exchange-traded and over-the-counter derivatives available. Increasingly, credit risk is hedged using credit derivatives, which are over-the-counter derivatives for which payments are based on borrower credit quality. Finally, certain risk exposures arising from insurance activities can be hedged using the reinsurance market.
At the same time, important differences in risk management techniques exist. As noted in the 2001 report by the Joint Forum consisting of international bank, securities, and insurance supervisors, financial firms tend to invest more in developing risk management techniques for the risks that are dominant in their primary business lines. The report also found that risk management still is conducted mainly on the basis of specific business lines. The following sections highlight the key differences in risk management techniques across financial activities.
Financial risks of commercial banking
A defining characteristic of commercial banking is extending credit to borrowers of all types. Hence, commercial banks’ main risks are the credit risk arising from their lending activities and the funding risk related to the structure of their balance sheets. Banks hold loan loss provisions to cover expected losses, but capital to cover unexpected credit accounts for a larger share of the balance sheet. Banks are required to hold minimum levels of regulatory capital, and bank regulators in most countries adhere to the 1998 Basel Capital Accord. As mentioned, credit risk management is placing greater emphasis on producing detailed quantitative estimates of credit risk. These measures are used to form better estimates of the amount of provisions and capital necessary at the portfolio level and to price and trade individual credits; in addition, they would be used for regulatory capital purposes under proposed changes to the Basel Capital Accord.
Commercial banks are particularly vulnerable to funding risk because they finance illiquid longer-term lending commitments with short-term liabilities, such as deposits. Broadly speaking, funding risk management consists of an assessment of potential demands for liquidity during a stressful period relative to the potential sources of liquidity. To avoid a shortfall, banks seek to expand the size and number of available sources, for example, the interbank market. In the United States, banks also have access to the Federal Reserve discount window.
Financial risks of securities activities
Securities firms engage in various financial activities, but key among these are serving as brokers between two parties in transfers of financial securities and as dealers and underwriters of these securities. The degree to which individual securities firms engage in these activities varies widely. In general, a large share of securities firms’ assets are fully collateralized receivables arising from securities borrowed and reverse repurchase transactions with other market participants. Another asset category is securities they own, including positions related to derivative transactions. The main risk arising from securities activities is the market risk associated with proprietary holdings and collateral obtained or provided for specific transactions. Securities firms generally do not maintain significant provisions because their assets and liabilities can be valued accurately on a mark-to-market basis. Hence, hedging techniques and capital play dominant roles in risk management for securities firms.
With respect to credit risk, securities activities generate fewer credit exposures than commercial bank lending. With fully secured transactions, securities firms mitigate their credit risk exposures by monitoring them with respect to the value of the collateral received. For partially secured or unsecured transactions, such as funds owed by counterparties in derivative transactions, they mitigate credit risk by increasing or imposing collateral requirements when the creditworthiness of the counterparty deteriorates. In addition, with frequent trading counterparties, securities firms enter into agreements, such as master netting and collateral arrangements, that aggregate and manage individual transactions exposures.
Securities firms have significant exposure to funding risk because a majority of their assets are financed by short-term borrowing from wholesale sources, such as banks. The liquidation of their asset portfolios is viewed as a source of funding only as a last resort. Accordingly, the primary liquidity risk facing securities firms is the risk that sources of funding will become unavailable, thereby forcing a firm to wind down its operations. To mitigate this risk, securities firms hold liquid securities and attempt to diversify their funding sources.
Financial risks of insurance activities
Insurance activities are broadly divided into life and non-life insurance, and firms specializing in either category face different risks. Specifically, these two types of activities require firms to hold different technical provisions, by virtue of both prudent business practices and regulatory mandates. For life insurance companies, technical provisions typically are the greater part of their liabilities—about 80%, according to the Joint Forum report—and they reflect the amount set aside to pay potential claims on the policies underwritten by the firms; capital is a relatively small percentage. Thus, the dominant risk arising from life insurance activities is whether their technical provisions are adequate, as measured using actuarial techniques. While term-life insurance policies are based solely on providing death benefits, whole-life insurance policies typically permit their holders to invest in specific assets and even to borrow against the value of the policies. Hence, life insurance companies also face market and credit risks.
For a non-life insurance company, technical provisions make up about 60% of liabilities, which is less than observed for life insurance companies. The different balance between provisions and capital for non-life insurance companies reflects the greater uncertainty of non-life claims. The need for an additional buffer for risk over and above provisions accounts for the larger relative share of capital in non-life insurance companies’ balance sheets.
Regarding funding risk, insurance activities are different from other financial activities because they are prefunded by premiums; for this reason, insurance companies do not rely heavily on short-term market funding. Life insurance companies have more than 90% of their assets in the investment portfolio held to support their liabilities. Hence, whether the investment portfolio generates sufficient returns to support the necessary provisions is a major financial risk. Investment risks include the potential loss in the value of investments made and therefore include both market and credit risk. These investment risks traditionally have been managed using standard asset-liability management techniques, such as imposing constraints on the type and size of investments and balancing maturity mismatches between investments and liabilities.
Several factors have contributed to the convergence of the financial service sectors. Yet, significant differences in their core business activities and risk-management techniques remain. There are also important differences in the regulatory capital frameworks, reflecting differences in the underlying businesses.
As firms become active participants in new markets and take on new types of financial risks, it is important that appropriate policies and procedures be put into place to measure and manage these risks. However, risk management still is conducted on the basis of specific business lines. Hence, the challenge for risk managers is to aggregate different financial risks across the firm accurately. At present, there are significant practical and conceptual difficulties associated with these calculations. Because of differing time horizons and the difficulty of precisely measuring correlations across financial risks, many firms calculate the amount of economic capital separately for each risk type and aggregate. Clearly, simple summation is too conservative, since it ignores any possible diversification. Much further research is necessary to determine the best methods for firm-wide risk management for FHCs.
It includes information about:
•   how we and our associates are remunerated in relation to the services offered;
•   any relationships or associations we may have with product issuers; and
•   our internal and external complaints handling procedures and how these are available to you.
This FSG does not relate to financial services provided by our financial planning businesses or YYY which have their own FSG. It also does not relate to any services or products we provide that are not financial services or financial products (for example loan products other than margin loans).
We will generally provide you with a Product Disclosure Statement (PDS) or other disclosure document (such as terms and conditions) in relation to a financial product if we give you personal financial product advice about the product or if we offer or arrange to issue a financial product to you. Personal financial product advice includes advice that takes into account one or more of your objectives, financial situation and needs. In certain circumstances we are not required to provide a PDS (including, for example, where you already have one). The PDS contains information about the financial product and will assist you in making an informed decision about the product.
If you are provided with personal financial product advice we may also issue you with a Statement of Advice (SoA). The SoA will contain:
•   the advice;
•   the basis on which it is given;
•   information relating to fees, commissions and other benefits and any relationships, associations or interests that may influence the advice you receive.
We are not required to issue you with a SoA where the personal financial product advice relates to certain deposit and non-cash payment products and travellers cheques provided we disclose certain information about remuneration and other benefits or interests which may influence the advice.
Financial services and products we are authorised to provide
XXXX  is authorised under its  AUTHORITY  to provide the following financial services:
•   financial product advice (both general and personal); and
•   dealing in financial products on behalf of others.
These services may be provided with a range of financial products including:
•   deposit and non-cash payment products;
•   derivatives;
•   foreign exchange contracts;
•   general insurance;
•   government debentures, stocks or bonds;
•   life insurance products (investment life and life risk);
•   managed investment schemes including investor directed portfolio services (IDPS);
•   retirement savings accounts;
•   securities;
•   superannuation; and
•   standard margin lending facilities
XXXX  is authorised to issue financial products in the above range (excluding government debentures, stocks or bonds, general insurance, life products and superannuation) and to underwrite interests in managed investment schemes and issues of securities.
XXXX  is a non-broker participant in the Stock Exchange Limited, and is also authorised to make a market in foreign exchange contracts, derivatives, debentures, government bonds or stocks and other financial products.
It may also operate custodial or depository services (not IDPS).
Who does XXXX  act for when providing financial services?
XXXX  is responsible for the financial services it provides to you under its AFSL.
XXXX  may act as a distributor or agent on behalf of other product issuers, including issuers of travellers’ cheques, securities, managed investment schemes and superannuation products, and general insurance companies and life insurance companies through distribution or agency arrangements. See below for further details of those relationships.
What relationships do we have with product issuers?
Many of the products offered by XXXX  are issued by us and companies related to us. Related companies in the XXXX  Group that are product issuers (in addition to XXXX) include:
•   XXXX  Trustees Limited;
•   XXXX  Asset Management Limited;
•   XXXX  Limited;
•   XXXX  Investments Limited;
•   XXXX   Nominees Pty Limited;
•   XXXX  Lifetime Company Limited;
•   WealthHub Securities Limited
XXXX  acts on behalf of other product issuers when it sells the following products:
•   life and general insurance
•   investment and superannuation products
•   travellers’ cheques
If you need to know the name of the issuer of a product that XXXX  offers you, and therefore who XXXX  acts for when it offers you that product, please refer to the Product Disclosure Statement, Statement of Advice or any other disclosure document you receive or ask your adviser.
Any additional relationships which we have for the purposes of our financial planning business or YYY  will be disclosed in the FSG for these parts of our business.
Arrangements with external service providers
XXXX  may from time to time engage a third party to provide financial services on its behalf.  Where a third party does not hold its own AFSL, it will provide the financial services as XXXX ’s ‘authorised representative’.
XXXX  may authorise a company or an individual to act as our authorised representative for sales and marketing activities.
How can a XXXX  staff member assist you?
To the extent that we authorise a XXXX  staff member to do so, the staff member can help you to apply for the financial products referred to in this FSG and can also give you financial product advice in relation to them.
If a XXXX  staff member is unable to provide you with a financial service or a financial product that you are interested in or is in your best interests, the staff member will refer you to another staff member who can.
As an integrated financial services provider, XXXX  also provides financial planning services. If you require these services you will be referred to an appropriate person in XXXX who will provide you with a separate FSG relating to the financial services that they may provide.
Instructing us
You can give us instructions by using the contact details set out on the last page of this FSG. Some products and services may have their own rules around how to provide instructions or execute certain transactions. Please refer to the PDS or other disclosure document for the product for these details.
Generally, you need to give us instructions in writing (e.g. fax, email or letter) or another method as agreed by us.
If we provide you with further advice, you may request a record of the advice, at that time or by contacting us on AAAAAA  up to 7 years after the day of providing the advice.
Payment for the services we provide
If you acquire a product issued by a company in the XXXX  Group of companies (including XXXX ), the relevant company, or any other XXXX  Group company providing services in relation to the product, may receive fees and or commissions in relation to that product which may ultimately benefit other members of the group and any directors or other associates of those companies. Any commissions or other fees that the relevant company, or any other XXXX  Group company (including XXXX) receives in relation to these services will generally be disclosed in the disclosure document for the relevant product.
In addition, XXXX  may receive any applicable bank or transaction charges. The fees you will pay for the products we offer are set out in the PDS or other disclosure document for the particular product.
Insurance Products
XXXX , or its related body corporate XXXX Financial Management Limited , may receive commission or other payments from insurers or insurance intermediaries, when XXXX  or NAFM are involved in the distribution of insurance products. These insurers and intermediaries include, but are not limited to,
Allianz: Commissions are calculated and paid monthly ranging from 10% to 40% of Base Premium for both new and renewed insurance. The actual percentage depends on the type of insurance product. These percentages may be reduced where discounts apply.
Allianz also pays marketing costs in relation to xxxx  Travel Insurance and may also pay a marketing allowance based on growth of total annual Base Premium for Home and Car Insurance products.
Chubb: Commissions are calculated and paid monthly ranging from 10% to 20% of Base Premium. The actual percentage depends on the size of the total annual Base Premium. Chubb may also pay annual marketing costs of up to 1.5% of total annual Base Premium.
CGU: Commissions are calculated and paid monthly and range from 7.5% to 15% of Base Premium for new insurance and 5% to 10% for renewed insurance. The actual percentage depends on the type of insurance product. CGU may also pay an annual marketing allowance of up to 1.5% of the total annual Base Premium.
MLC: Commissions on new policy sales are calculated monthly and paid annually based on the first years' Base Premium. Commissions are paid at the rate of 20%, where sales in the relevant year are less than $14 million. Sales in excess of $14 million, in the relevant year, are paid at the rate of 50%.
Aon: Amounts are calculated and paid monthly, such amounts being 25% of any commission and/or 10% of any Professional fees received.
In certain circumstances XXXX  may receive additional remuneration from the relevant insurer (up to 5% of profit from Chubb, 50% of profit from Allianz and 25% of profit from CGU) based on the profitability (or a proportion of it) of the portfolio of the insurer relating to insurance arranged through  XXXX, after allowing for claims and other expenses. This is calculated and paid annually.
‘Base Premium’ means the amount paid by a customer to an insurer for an insurance product (other than XXXX Travel Insurance) excluding Stamp Duty, GST and Fire Service Levy. For XXXX Travel Insurance Base Premium includes Stamp Duty and GST.
Investment Products
For investment, superannuation or retirement products issued by any of MLC Investments Limited (MLCI), MLC Nominees Pty Ltd (MLCN),  MLC Limited (MLC) or WealthHub Securities Limited (WSL) that are sold due to a referral or lead generated from the NAB, each of MLCI, MLCN, MLC and WSL will pay by instalments to the NAB an annual sum of up to the greater of 0.1% of current year inflows (via the XXXX) or 0.05% of prior year inflows (via the XXXX). Inflows include, for example, contributions, top-ups, reinvestments etc.  MLCI, MLCN, MLC and WSL are all members of the National Australia Group of companies.
Personal financial product advice
If personal financial product advice is given in relation to a financial product the amount of any commission that may be received or the manner in which it will be calculated will be disclosed in any SoA that is required to be issued to you.
Information in relation to the remuneration and any other benefits that must be disclosed in respect of our financial planning businesses  is set out in the FSG for these businesses.
Other unrelated entities
From time to time we may provide general advice and dealing or other services in relation to financial products that are offered by unrelated entities. Any commissions or other fees that we receive in relation to these services will generally be disclosed in the disclosure document for the relevant product.
Remuneration or other benefits received byXXXX  staff members
XXXX staff members are salaried employees of XXXX and in most cases do not receive any proportion of any fees or commissions paid to XXXX or any other company in the XXXX Group in connection with the financial services or financial products referred to in this FSG.
Staff members may be entitled to receive additional monetary or non-monetary benefits and/or rewards resulting from participation in programs conducted by XXXX. Monetary benefits or rewards may include an annual bonus, the level of which may depend on the overall performance of the XXXX Group of companies. Non-monetary benefits or rewards for staff members and their partners may include gift vouchers, film tickets, restaurant meals, attendance at an annual conference or other functions.
Whether staff members receive any such benefits and rewards depends on a number of balanced performance and behavioural factors.  In some situations these may include the level of remuneration generated for XXXX from sales of products as a consequence of the staff member's advice.
It is not possible to determine at any given time whether a staff member will receive such benefits or rewards or to quantify them. They are generally not directly attributable to any particular product that the staff member has given advice on.
Referral fees
If a customer is referred to us (whether by a person or a company within or outside the XXXX  Group), we may pay the referrer a fee.  The fee varies according to the customer, referrer and the financial products involved.  The fee involved will be set out in documents you may receive in these circumstances.
We pay these fees as upfront fees when the financial service is provided or the financial product is issued, or periodically as ongoing fees.
Lodging a complaint
We’re always trying to improve our customers’ banking experience, but we know things don’t always go the way they should. Your feedback about the services you receive from us and our products can help us understand and address issues we otherwise might not know about. Our brochure titled ‘All feedback is good feedback: let’s talk’ includes more information and is available from any XXXX branch.
Help us to help you
There are two ways to talk to us.
1.  In person: Speak directly to us at your branch and we’ll do our best to resolve your concern or issue.
2. Phone our call centre on AAAAAA.
By giving us as much information as possible, you’ll be helping us to resolve things faster.  If you have any supporting documentation, please have it handy when you raise your concern.
How long will it take?
If you raise an issue with us, we’ll address it as quickly as possible. In fact, most complaints are resolved within one business day. If your issue can’t be resolved straight away, we’ll make sure we see it through. In nearly all cases, you can expect that your concern will be resolved within five business days. In the event that it takes us longer than five days to resolve or investigate, we’ll ensure that you’re regularly updated.
Going a step further
We’re here to help, so if you feel that your contact at our branch or call centre hasn’t resolved the issue, then the next step is to speak to our Customer Resolutions Team. Here’s how:
1. Call our dedicated Customer Resolutions Team any time between 8am and 7pm, Monday to Friday (AEST), on AAAAAAAA
2. Send a form online:
Complete our online feedback form at, send us a secure message through your  Banking, or email
Need more options?
If you still feel your issue hasn’t been resolved to your satisfaction, then you can raise your concern with XXXXs independent external dispute resolution provider, the Financial Ombudsman Service. Of course, as you’re a valued customer, we’d much rather try to resolve the issue together first. In fact, the Ombudsman will encourage you to resolve the issue with XXXX  before they start to investigate


Management Consulting

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Leo Lingham


management consulting process, management consulting career, management development, human resource planning and development, strategic planning in human resources, marketing, careers in management, product management etc


18 years working managerial experience covering business planning, strategic planning, corporate planning, management service, organization development, marketing, sales management etc


24 years in management consulting which includes business planning, strategic planning, marketing , product management,
human resource management, management training, business coaching,
counseling etc




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