Chapter 2 - How Retail Consumers Are Served By The Financial Services Flashcards
What are the 5 options for those with debt difficulty?
1) Debt Repayment Plans
2) Debt Management Plans
3) Debt Consolidation
4) IVAs
5) Bankruptcy
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What are the 4 key aspects of “Know Your Client”?
1) Financial Situation
- Income, Expenditure, Assets
2) Investment Objectives
- ATR, Aims
3) Understanding & Knowledge
- Recommendation complexities
4) Impact of Advice Given
- Taxation considerations, entitlement
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What 3 considerations should be made before making a recommendation?
1) Areas of advice/need
2) ATR
3) Change in circumstances
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What requirements must an SL meet?
1) Personalised to client (soft facts)
2) Written in plain English (avoid jargon)
3) Recommendations must be justified
4) Advatages and disadvantages to be explained
5) Any needs not addressed must be highlighted
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What is a Priority Debt?
Mortgages, Utilities and Council Tax
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What is the difference between Ijara and Diminishing Musharaka?
Ijara - Monthly repayments held by the firm that is facilitating the arrangement and used to buy the house at the end of the term
Diminishing Musharaka - The Firm buys the property and each repayment transfers a share of the property to the purchaser
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What is an Unstructured Loan?
- These offer flexibility in repayment (over-payments, term reductions etc)
- Most common arrangement
- Mortgages are one example
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What is a Structured Loan?
- Interest is added to the loan up-front
- Term and interest payable usually fixed
- Penalties usually apply for early repayment
- Car loans and Hire Purchase are examples
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Help to Buy ISAs vs LISA?
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What are the different types of Lifetime Mortgage?
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3 Life Cycle Stages and features?
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