1.TITLE:Apply knowledge and insight of the role of alternative investments in wealth management

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2.UNIT STANDARD NUMBER:242595

3.LEVEL ON NQF:6

4.CREDITS:8

5.FIELD:Business, Commerce and Management Studies

Sub Field:Finance, Economics and Accounting

6.PURPOSE:

This Unit Standard is intended for learners who give financial advice or engage in wealth management or financial planning. It requires an in depth knowledge of the investment environment and is applicable to Financial Planners, Broker Consultants, Fund Administrators, Financial Advisers, Fund Managers, Portfolio Managers and Emigration Consultantswho require a high level of insight and give advice on investments at a high level.

The qualifying learner is capable of:

  • Demonstrating knowledge and insight into alternative investments.
  • Describing the most commonly available investment vehicles used as alternative investments.
  • Demonstrating knowledge and insight into how financial instruments can be structured to meet special needs.
  • Demonstrating knowledge and insight into the influence of world trends and market forces on alternative markets.

7.LEARNING ASSUMED TO BE IN PLACE:

It is assumed that learners are competent in Communication and Mathematical Literacy at NQF Level 4and are working towards or have a Level 5 Financial Services Qualification or equivalent.

8.SPECIFIC OUTCOMES AND ASSESSMENT CRITERIA:

Specific Outcome 1:Demonstrate knowledge and insight into alternative investments

Assessment Criteria:

1.1The rationale for the development of alternative investment vehicles is explained with reference to ability to access South African investment markets.

1.2The development of alternative investments in South Africa is explained with reference to single and multiple needs.

1.3The investor profile suited to alternative investments is explained with reference to high net worth investors.

1.4The link between the life cycle of the individual investor and the investment vehicle is explained with reference to how asset classes may be changed within a vehicle or financial instrument.

1.5The influence of marketing cycle on alternative investments is explained with reference to financial and other instruments.

1.6Ways in which alternative investments differ from other asset classes are explained with reference to management strategy, absolute returns and risk return profile.

Specific Outcome 2:Describe the most commonly available investment vehicles used as alternative investments

Assessment Criteria:

2.1The concept of hedge funds as alternative investments is explained with reference to their purpose and wealth creation.

2.2Different investment vehicles that can be used in a linked product are explained with reference to linkages and tax.

2.3The use of ancillary insurance as an alternative investment is explained with reference to a specific need.

2.4A matured endowment as an investment vehicle is explained with reference to the advantages and disadvantages for taxation.

2.5The use of linked products is explained as a means of accessing alternative investments.

Specific Outcome 3:Demonstrate knowledge and insight into how financial instruments can be structured to meet special needs

Assessment Criteria:

3.1Reasons why it may be necessary to structure a specific financial instrument as an alternative investment are explained with examples.

3.2The major elements in an alternative investment are analysed to determine the structure.

Specific Outcome 4:Demonstrate knowledge and insight into the influence of world trends and market forces on alternative markets

Assessment Criteria:

4.1The impact of market forces on selected alternative investment is analysed to inform a financial decision.

4.2The impact of currency fluctuation on selected alternative investment is analysed to inform a financial decision.

4.3The demand for alternative investments is explained with reference to the developed countries of the world.

9.ACCREDITATION AND MODERATION:

  1. Anyone assessing a candidate against this Unit Standard must be registered as an assessor with the relevant ETQA or ETQA where a Memorandum of Understanding (MOU) exists with the relevant ETQA.
  2. Any institution offering learning that will enable achievement 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.
  3. Moderation of assessment will be overseen by the relevant ETQA according to the moderation guidelines and the agreed ETQA procedures.
  1. RANGE STATEMENT:
  • Alternative investment vehicles and markets may be domestic or international.
  • Common financial instruments include, but are not limited to, warrants, options, futures, hedge funds and mature endowments.
  • Alternative investments include, but are not limited to, hedge funds, preference shares, structured rates, Exchange Traded Funds (ETFs) and matured endowments.
  • Hedge fund styles include coverage and leverage positions, over counter or listed and the nature of the underlying investment.
  • Major elements of alternative investments include, but are not limited to, contracts, liabilities, rights, responsibilities and the services levels of the parties to the contract.
  • Structured alternative investments refer to investments on a contract basis, structured deals and unusual financial instruments.

11.NOTES:

  • CRITICAL CROSS FIELD and DEVELOPMENTAL OUTCOMES:

This Unit Standard supports in particular, the following Critical Cross-field Outcomes at Level 6:

  1. The learner is able to identify and solve problems in which responses show that responsible decisions using critical and creative thinking have been made in explaining the investor profile suited to possible alternative investments.
  2. The learner is able to communicate effectively using visual, mathematics and language skills in the modes of oral and/or written presentations in explaining different alternative investment vehicles.
  3. The learner is able to demonstrate an understanding of the world as a set of related systems by recognising that problem-solving contexts do not exist in isolation by explaining the link between the life cycle of the investor and the investment vehicle.

Search words; alternative investments; investments; wealth management, hedge funds, warrants, options, futures, mature endowments.

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L5 alt invest 18 June 2006