1. Risk analysis and minimization
Trevor Slater
Mast. Conf. Res.
Sen Assoc ANZIIF
General Manager - FSCL

3.  Trevor the ever helpful employee
 All great for a while.....
 Then not so good and he has to go

4. Could a good risk analysis
and risk plan have
prevented this
happening?

5.  When you are planning or on your holiday do
you takes steps to insure its success?
◦ Travel insurance
◦ Itinerary
◦ Sunscreen
◦ Maps
◦ Insect repellent
◦ Pills
 Why not do so for your work and other goals?

6. What is Risk?
 In simple terms Risk is anything that may
impede you from achieving your goals. It
can include:
◦ the potential that actual results will not equal
anticipated outcomes (risk as uncertainty)
◦ the threat of bad effects happening (risk as
hazard)

7.  Risk is made up of two factors that can be
analysed and addressed to prevent or
minimise the effects of risk. They are:
◦ the probability of something going wrong
and
◦ the negative consequences that will
happen if it does (or impact).

8. Risk Analysis process
1. Identify the risks
2. What is the probability and impact of each
risk - rate on a 1-5 scale
3. Is the current control sufficient?
4. Is the risk acceptable in its current form?
5. Address the risk
6. Take actions to minimise the impact of risks
(controls)

9.  Human – loss and incapacity
 Operational – access to essential supplies
 Reputational – customers and employees
 Procedural – internal controls
 Project – budget overruns
 Financial – business failures
 Technical – IT failure
 Natural – disasters
 Political – changes in laws
 Structural – unsafe workplace

10.  Important...
You must identify the risk without
taking into account any current
controls.

11.  Human: death or incapacitation of business
manager / owner.
 Reputational: your clients ‘bad mouthing’ you
 Political: a change of Government resulting in
changes to the FSP laws
 Question 1: name one financial type of risk
and one technical type of risk to your
business

12.  Probability or likelihood of risk occurring
1. Remote possibility
2. Unlikely
3. Possible
4. Likely
5. Certain or unavoidable

13.  Impact or outcome if risk occurs
1. Minimal
 Nil if any effect on reaching the goal
2. Some
 May delay reaching the goal - a small problem that can
be easily fixed
3. Medium
 Will possibly prevent reaching the goal – action needed
to rectify

14.  Impact or outcome if risk occurs
4. Serious
 Will prevent reaching the goal – urgent action needed
5. Catastrophe
 Will definitely prevent reaching you goal – a major
issue that would stop you reaching the goal –
immediate action needed

15.  Impact or outcome if risk occurs
4. Serious
 Will prevent reaching the goal – urgent action needed
5. Catastrophe
 Will definitely prevent reaching you goal – a major
issue that would stop you reaching the goal –
immediate action needed

16. High Risk
Probability 5
4
3
2
1
Low Risk 1 2 3 4 5
Impact

17.  Important...
You must assess the risk – impact
and probability - without taking
into account any current controls.

18.  Human: death or incapacitation of business
manager / owner.
Probability: 2, Impact: 5 = 7
 Reputational: your clients ‘bad mouthing’ you
Probability: 3, Impact: 3 = 6
 Political: a change of Government resulting in
changes to the FSP laws
Probability: 3, Impact: 2 = 5

19. Question 2:
 Rate the probability and impact of:
◦ the financial risk and
◦ the technical risk
....you identified earlier

20.  Is there a current control?
 Is it sufficient?
 What controls can be put in place?
 Is the risk...
◦ Untreatable
◦ Avoidable
◦ Too costly to treat
◦ Transferable

21. Poor Risk has probably been identified but little or no control is in
place or the control clearly will not positively impact the risk
and/or is not in operation or documented (and staff are
unaware of the control)
Fair Control only addresses the risk in part and needs expanding
and/or operation and documentation (and staff are aware of
the control) could be improved
Good Control addresses risk but documentation (and staff are
aware of control) and/or operation could be improved
Excellent Control fully addresses risk, is documented (and staff are
aware of control) and in operation

22.  Address each risk – high ratings first
◦ Control – take actions to minimise
◦ Avoid – don’t undertake the activity
◦ Accept – out of your control / cost to control too high
◦ Transfer – have someone else undertake the task

23.  Human: death or incapacitation of business
manager / owner.
Probability: 2, Impact: 5 = 7
 Reputational: your clients ‘bad mouthing’ you
Probability: 3, Impact: 3 = 6
 Political: a change of Government resulting in
changes to the FSP laws
Probability: 3, Impact: 2 = 5

24. Question 3:
 Identify and action the controls for:
◦ the financial risk and
◦ the technical risk
....you identified earlier

25.  Identify the risks
 What is the probability and impact – rate each
 Is the current control sufficient?
 Is the risk acceptable in its current form?
 Address each risk – ones with a high rating first
o Control
o Avoid
o Remove
o Transfer
 Take or assign ownership of the risk

26. What are some of the
risks to business faced
by mortgage brokers?

28. Risk analysis and minimization
Trevor Slater
Mast. Conf. Res.
Sen Assoc ANZIIF
General Manager - FSCL