Learner Name

ID Number
Organisation

FORMATIVE ASSESSMENT:
LEARNER WORK FILE VERSION 1
Unit Standard Title: Apply knowledge of the different asset classes
in order to give financial advice

Unit Standard No: 242594

Unit Standard Credits: 4

NQF Level: 5

Mark information:
Specific
1 2 3 4 5 Total % C / NYC
Outcome/Section

Maximum marks 36 19 14 11 80 100

This outcomes-based learning material was developed by Masifunde Training Centre with funding from INSETA in July 2014.
The material is generic in nature and is intended to serve as a minimum standard for the industry.

This material may be used and copied for your own personal use. This material may not be republished, nor may it be reverse
engineered, translated, modified or used to make derivative information of materials without the express written permission of
INSETA which can be obtained by contacting [email protected]. Short excerpts from the material may be
reproduced without authorisation on condition that the source is indicated.
Disclaimer
Whilst every effort has been made to ensure that the learning material is accurate, INSETA and Masifunde Training Centre
(Pty) Ltd take no responsibility for any loss or damage suffered by any person as a result of the reliance upon the information
contained herein.
242594 Learner Work File Ver. 1 1

Formative Activities

Section 1: 36 marks

Activity 1

In this activity, you have to analyse the different asset classes and their role in a
financial plan.

1.1 Complete the following table with regards to the different asset classes’
characteristics, risk, return and accessibility. (16)

Asset Characteristic Risk Return Accessibility

class
Equity

Cash

Property

Bonds

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1.2 Identify and discuss the composition of the investment portion of a financial
portfolio managed by your organisation. Write notes on each asset class, volatility,
risk, optimal growth, expected rate of return and the balancing of the portfolio. (20)

Answer in an essay format.

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Section 2: 19 marks

Activity 2

In this activity, you have to analyse the effect of the investment environment on the
asset classes.

2.1 List the asset class with the highest risk and explain why this is a high risk asset
class. (2)

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2.2 Identify and analyse risks in the investment environment with reference to the
different asset classes managed by your organisation. Present your answer in a
report format. (8)

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2.3 Indicate which of the following investment portfolios are associated with passive
Management, by making a cross on the line next to the applicable investment
portfolio. (4)
Investment Portfolio Passive Management
Ordinary shares
Blue chip shares
Bonds
Property
Cash
Unit trusts
Multi Manager

2.4 Identify risks that are associated with active management of an investment
portfolio in your organisation. (5)

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Section 3: 14 marks

Activity 3

In this activity, you have to investigate how market conditions impact on asset
classes.

3.1 Discuss how interest rates (as a market condition) will impact on the following
asset classes:
 Cash
 Property (4)

3.2 What investment strategy would you recommend to a client who has invested in
the portfolios as mentioned in Activity 3.1, during high interest rates conditions?
(2)

3.3 Briefly discuss the relationship between asset classes with reference to changes
in the market conditions. (8)

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Section 4: 11 marks

Activity 4

In this activity, you have to analyse the risk profile of a client in order to propose a
financial solution.

4.1. Compile a risk profile for one of your clients that want to invest some inherited
money in an investment portfolio. Ensure that you take his/her personal
circumstances into consideration with reference to his/her needs, wants, willingness
to take risk, as well as lifestyle demands. Attach a copy of the client’s profile to your
POE. (5)

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4.2 Take the information from the client’s risk profile in Activity 4.1 into account:
a. Propose an appropriate asset class to the client.
b. Motivate why you have proposed this asset class.
c. Highlight the risk of the proposed asset class to the client. (6)

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All qualifications and part qualifications registered on the

National Qualifications Framework are public property. Thus the
only payment that can be made for them is for service and
reproduction. It is illegal to sell this material for profit. If the
material is reproduced or quoted, the South African Qualifications
Authority (SAQA) should be acknowledged as the source.

SOUTH AFRICAN QUALIFICATIONS AUTHORITY

REGISTERED UNIT STANDARD:

Apply knowledge of the different asset classes in order to give financial advice
SAQA US UNIT STANDARD TITLE
ID
242594 Apply knowledge of the different asset classes in order to give financial
advice
ORIGINATOR ORIGINATING PROVIDER
SGB Insurance and
Investment
QUALITY ASSURING BODY
-
FIELD SUBFIELD
Field 03 - Business, Commerce and Finance, Economics and
Management Studies Accounting
ABET UNIT OLD NQF NEW NQF CREDITS
BAND STANDARD LEVEL LEVEL
TYPE
Undefined Regular Level 5 New Level 4
Assignment Pend.
REGISTRATION REGISTRATION REGISTRATION SAQA
STATUS START DATE END DATE DECISION
NUMBER
Reregistered 2009-11-03 2012-06-30 SAQA
0160/05
LAST DATE FOR LAST DATE FOR ACHIEVEMENT
ENROLMENT
2013-06-30 2016-06-30

In all of the tables in this document, both the old and the new NQF Levels are
shown. In the text (purpose statements, qualification rules, etc), any reference to

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NQF Levels are to the old levels unless specifically stated otherwise.

This unit standard replaces:

Old
New NQF Replacement
US ID Unit Standard Title NQF Credits
Level Status
Level

Differentiate between the

different asset classes and New Level
Level
14535 indicate how they can be Assignment 4 Complete
5
used to meet customer Pend.
needs

PURPOSE OF THE UNIT STANDARD

This Unit Standard is intended for learners who advise individuals on personal
financial planning or who give advice to small and medium sized business entities.
It should lead to an in depth understanding of the asset classes and will be useful for
learners who give advice as part of the financial planning process, learners are
involved in the pricing of unit trusts, product development and giving information
to Intermediaries, Retirement fund Consultants, Financial Advisors, `Financial
Planners, Broker Consultants, Bankers, Trustees and learners in collective
investment managers and in financial services in general.

The qualifying learner is capable of:

lient in order to propose a financial solution.

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF

PRIOR LEARNING

It is assumed that learners are competent in Communication and Mathematical

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Literacy at NQF Level 4.

UNIT STANDARD RANGE

The typical scope of this Unit Standard is:

Market and property.

-government and corporate bonds.
e Tax
Act.

potential loss) and include, but are not limited, to sector specific risk, market
specific risk, geographic location and social and political risk.

Specific Outcomes and Assessment Criteria:

SPECIFIC OUTCOME 1

Analyse the different asset classes and their role in a financial plan.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1

The different asset classes are analysed to determine their characteristics, risk return
relationship and accessibility to the investor.

ASSESSMENT CRITERION 2

The composition of the investment portion of a financial portfolio is discussed with

reference of asset classes, volatility, risk, optimal growth, expected rate of return
and the balancing of the portfolio.

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SPECIFIC OUTCOME 2

Analyse the effect of the investment environment on the asset classes.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1

Risks in the investment environment are analysed with reference to the different
asset classes.

ASSESSMENT CRITERION 2

Risks associated with active and passive management of an investment portfolio are
analysed and an indication is given of when each style is appropriate.

SPECIFIC OUTCOME 3

Investigate how market conditions impact on asset classes.

ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1

Knowledge of market conditions is applied to the asset classes and an indication is

given of how a change in market conditions would affect the asset class and a
proposed investment strategy.

ASSESSMENT CRITERION 2

Relationships that exist between the asset classes are described with reference to
changes in market conditions and investor behaviour.

SPECIFIC OUTCOME 4

Analyse the risk profile of a client in order to propose a financial solution.

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ASSESSMENT CRITERIA

ASSESSMENT CRITERION 1

The personal circumstances of a client are determined in terms of needs, wants,

appetite for risk and lifestyle.

ASSESSMENT CRITERION 2

A client's financial situation is analysed to determine a risk profile at a specific life

stage.

ASSESSMENT CRITERION 3

The risk profile of a client is matched to the appropriate asset classes.

ASSESSMENT CRITERION 4

The risk a client is prepared to take is matched to the risk associated with the
different asset classes in order to recommend an investment solution for a specific
client.

UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS

assessor with the relevant ETQA or ETQA where a Memorandum of Understanding

(MOU) exists with the relevant ETQA.
evement of this Unit
Standard must be accredited as a provider through the relevant ETQA or ETQA
where a Memorandum of Understanding (MOU) exists with the relevant ETQA.

the moderation guidelines and the agreed ETQA procedures.

UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE

N/A

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UNIT STANDARD DEVELOPMENTAL OUTCOME

N/A

UNIT STANDARD LINKAGES

N/A

Critical Cross-field Outcomes (CCFO):

UNIT STANDARD CCFO IDENTIFYING

The learner is able to identify and solve problems in which responses show that
responsible decisions using critical thinking have been made in matching a client's
needs to an asset class and market conditions.

UNIT STANDARD CCFO COLLECTING

The learner is able to collect, organise and critically evaluate information in

analysing the risks associated with the asset classes and investigating the impact of
market conditions on asset classes.

UNIT STANDARD CCFO COMMUNICATING

The learner is able to communicate effectively in proposing a financial solution to a

client.

UNIT STANDARD CCFO DEMONSTRATING

The learner is able to demonstrate an understanding of the world as a set of related

systems relating risk profiles and market conditions to asset classes.

All qualifications and part qualifications registered on the National Qualifications

Framework are public property. Thus the only payment that can be made for them is for

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242594 Learner Work File Ver. 1 15

service and reproduction. It is illegal to sell this material for profit. If the material is
reproduced or quoted, the South African Qualifications Authority (SAQA) should be
acknowledged as the source.

INSETA copyright 2014