financial services Flashcards
name 4 main activities undertaken by the professional financial services sector and 5 by the retail sector.
Equity market, bond market, foreign exchange, derivatives are in the professional sector.
Retail banking, insurance , pensions, investment services and financial planning
How does a mutual savings institution differ from a retail bank.
Retail banks provide services such as taking deposits from and lending funds to retail customers whereas savings institutions originally specified in offering saving products to retail customers. building societies are jointly owned by the individuals who have deposited from the members. IE mutual societies.
How does Peer2Peer lending differ from traditional banking?
Banks take deposits in which they lend out at a higher interest rate than that they give out making a profit. P2P cuts out banks and offer a lower interest rate on borrowings and profit via a fee.
What are the main types of services provided by investment banks
- Corporate finance and advisory work (mergers&acquisitions)
- Banking (for gov. institutions and companies)
- treasury dealing(protect clients form foreign exchange)
- investment management (for sizeable investors)
- securities trading (in equities, bonds and derivatives)
What is protection planning and what scenarios can protection policies provide cover for?
payment protection in case a person can not meet repayments on loans and mortgages.
what services does a custodian offer
specialise in safe custody services, looking after portfolios of shares and bonds of others.
- holding assets in safe keeping ( equity and bonds)
- arranging settlement of any purchases and sales of securities
- processing corporate action (collecting income from assets
- managing cash transactions
- performing FX transactions
What isa platform and why are they a useful distribution channel
online service used by intermediaries, such as independent financial advisors to view and administer their clients investment portfolios.
what is the role of a third party administrator
undertake investment administration on behalf of other firms and specialise in this area of the investment industry.
what are two types of financial adviser, and how does the range of products they advise on differ?
- some recommend suitable financial products from the whole of the market
- others from a narrower range of products
financial advisors need a detailed survey of a clients financial position to create an appropriate action plan.
what records should be kept when a transaction is undertaken on an execution only basis
to ensure that firms operate within regulation it must be clear that the firm gave no advice and made ut clear at the time of sale that it was not responsible for the products suitability.
