Consumer and Financial Decisions Flashcards
Laws that regulate financial services
Australian securities and investments commission (ASIC) - monitoring and providing consumer protection.
The financial services reform act 2001 - minimum standards of conduct.
Product disclosure statement (PDS)
Information on risks, level of fees charges, full description of financial product and tax information.
National consumer credit code
Improves consumer protection
FOFA Legislation
Greater protection by bettering: duties and commission payments types of recommended products.
Consumers have the right to:
Safety Be informed Choose A healthy environment Satisfaction of basic needs Be heard Redress Education
Competition and consumer act
Replaced Fair Trading Act to incorporate changes to buying and selling.
The federal government introduced the Australian Consumer Law 2011 to protect consumers.
Factors that influence spending and saving
Value for money Convenience Customer service Quality Advertisement Demographics
Mortgage
A ban to purchase a house. It consists of the principle sum borrowed. The financial institution will also require equity for this loan.
Personal loan
Normally for smaller items. A guarantor will repay the loan if the borrower fails to make repayments.
Revolver
Card with low interest as they buy a lot and only pay the minimum
Transactor
Card with long interest free period. Avoid build up of interest and pay full balance.
Disposable income
Income that is left over after you have paid your bills for things such as loans, rent and insurance.
Successful budgeting
Income Prioritise Assess financial situation monthly Expenses Save
Fixed expenses
Doesn’t change and is paid regularly
Variable expenses
They alternate.
