3. Areas of Financial Advice: The Future Flashcards
What is a defined benefit (DB) pension scheme
Pension scheme where the amount you get paid is how long you’ve been with employer
What is a defined contribution (DC) pension scheme
The pension funds come from your contributions, employers and tax relief from government
What are the 2 types of LTCI
Pre-funded LTCI
Immediate care LTCI
What is immediate care LTCI
- When they need long term care
- Bought with a lump sum
- Pays out regular income (tax free)
What factors are dependent on a clients long term care
Age
Health
Existing Financial planning
State benefits
Typically how long is a Short term investment
Up to 5 years
Typically how long is a medium term investment
5-15 years
Typically how long is a long term investment
15 years +
Covers objectives such as retirement
Collective investments are set up on one of 3 bases:
- Corporate
- Trust
- Life insurance
What are examples of corporate based collective investments
- OEICs
- Investment trusts
- Offshore funds
What are OEICs?
Open Ended Investment Companies
May adopt a single or dual priced system
What are Investment trusts?
A company that invests in shares of other companies
What are unit trusts?
Set up by trust deed, have trustees
Offer income or accumulative units
What is a life insurance bond
A lump sum investment that includes a small amount of life cover
What is inheritance tax?
IHT is tax (40%) on an individuals estate after they die
