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R01 > Revision > Flashcards

Revision Flashcards

1
Q

The role of financial services in the uk

A

Provide a means for people to save and invest their wealth for the future

Allows for saving to be transferred to the broader economy through lending and investment

Allows people to transfer risk

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2
Q

Firms

A

Banks and building societies - core services: loans, mortgages - indirect services: stockbroker services, portfolio management.

Life insurance companies

Friendly societies- small mutual organisations that offer tax free savings

Financial intermediaries - financial advisory firms, restricted and whole of market

Multi distribution organisations - e.g. Tesco who offer banking services to exploit large client base

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3
Q

Markets

A

2 primary forms of markets

Over the counter i.e buyer and seller directly deal with each other

Via an exchange i.e London stock exchange

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4
Q

Regulators

A

The financial policy committee (FPC) of the bank of England

The financial conduct authority (fca) broadly concerned with the sales and marketing of financial products and services - looks after consumer

The Prudential Regulatory Authority (PRA) a division of the bank of England which covers the prudential regulation (capital and solvency) of the industry’s largest players including banks and insurers - big firms

The pension regulator (TPR) which regulates workplace pensions

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5
Q

Competition and markets authority - whose core responsibility are…

A

Investigate mergers between organisations, to make sure they don’t reduce competition

Take action against businesses and individuals that take part in anti-competitive behaviours

Protect consumers from unfair trading

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6
Q

Infrastructure - how does the financial system work?

A

Millions of transactions every day, the bank of England overseas the payment systems in the uk, companies paid by boe to handle these transactions e.g. chaps and Bacs these are clients of the payment systems regulator

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7
Q

UK financial services in its broader context

A

European banking authority
European securities and markets authority
European insurance and occupational pensions authority
European systematic risk board
European system of financial supervision

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8
Q

UK in global context

A

Financial action task force relates to money laundering

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9
Q

The role of the UK government in terms of policies

A

Fiscal policy - spending/borrowing and taxation - SPEND 100m on infrastructure to stimulate economy, creating jobs and demand. 100m tax cut increase spending. BORROWING through ns&I and gilts. Also note quantities easing - injecting cash into system
Effects of taxation….

Monetary policy - control on interest rates and money supply: out of government hands. Interest rates are set by the monetary picy committee of the bank of England and exchange rates are supply and demand
Monetary stability is a core responsibility which means the stability of the value of sterling and prices

Also consider

The ‘welfare’ provided by state ie NHS
And regulation and law making

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10
Q

Obtaining wants- gots = needs

A

Hard facts - how things are i.e how much money is in your pension

Soft facts - how do you feel about investment risk,

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11
Q

A suitability letter

A

Generated for the consumer setting out exactly why the product is appropriate for their needs

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12
Q

Life stages of a consumer

A

Vulnerable years - early years of adulthood, any loss of income serious, savings tend to be lower, high mortgage young children, protection primary need

Relaxed years 40+ - higher levels of income, children leave home, more disposable income, income protection start to overcome lice insurance, more attention on savings and retirement
Anxious years 50 plus: retirement draws near, long term care, assets to next generation, IHT planning

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13
Q

Pimpsi

A

Protection - life insurance in the main income

Income protection

Mortgages

Pensions

Savings and investments

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14
Q

Definition of a mortgage

A

Mortgage is the use of the property as collateral or security for the loan

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15
Q

Interest rate options for mortgages

A

Fixed
Variable

Capped: won’t fall below a certain level
Cap and collar: lower and upper limit

Tracker - usually variable which track boe rate
Discount - variable rate offering a discount for fixed amount of years

Deferred interest - pay less interest in early years

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16
Q

Equity release

A

Home reversion - all it part of property is sold live rent free but have to maintain house

Lifetime mortgage - loan that is only repayable after customer does it leaves to move into LTC.

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17
Q

Structured Vs unstructured debt

A

Structured same every month e.g. car repayments

Unstructured is where repayment can vary and overpayments maybe made this is more usual with mortgages

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18
Q

Types of pensions

A

State pension

Clas 1,2 and 4 needs 35 years NIC contribution post 2016 to receive 185 per week

State pension age 65, 67, 68…

Employerpension - defined benefit or final salary
Auto enrol workplace pension - under government legislation employers have to offer a workplace pension - earning more then 10k employers put in 3% and HMRC 1% employee 5 %

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19
Q

Personal pension & group pensions

A

Defined contribution benefit which receive tax relief on

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20
Q

Direct Investments

A

Equities - share in a company
Fixed interest - bonds
Property
Pensions
Isa
Derivatives

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21
Q

Socially responsible investing

A

Sustainable finance - the process of taking into account environmental, social and governance factors ‘esg’

Range of funds to help adv and clients make decisions

Positive screening
Negative screening
ESG integration
Thematic investing

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22
Q

IHT and tax planning

A

325k.nill rate band
175k property band
40% or 36% if 10k to charity

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23
Q

Making gift exemptions for iht

A

3k
Small gift of 250
Marriage 5k, 2.5k or 1k
Charities unlimited

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24
Q

Pet - potentially exempt transfers
CLT - 20% paid

A

Pet- 20% noted but not paid unles due before 7 years

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25
Q

Debt management and budget planning

A

Essential expenditure
Regular outgoings
Discretionary expenditure

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26
Q

State benefit

A

Means tested.
Contribution tested
Needs tested
Universal credit - means tested but not taxed

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27
Q

State sickness benefit

A

Employment and support allowance -
Statutory sick pay - 28 weeks 99.35pw.
Disability benefits - personal independence payment 16-64
Daily living component
Attendance allowance

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28
Q

State bereavement benefits

A

3.5k w kid plus £350
2.5 no kid plus £100

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29
Q

Support for mortgage interest

A

Up to 200k and £100 but wait time if 39 weeks

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30
Q

Sole trader

A

Self employed basis with a trading name - profits are taxed to the individual and NI is paid under classes 2 and 4

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31
Q

Partnership

A

2 or more people work together w intension of making a profit

No legal entity but both are personally joint liable, personally pay tax and NI

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32
Q

Limited liability partnership

A

Legal identity - each partner will still personally pay tax and NI but is a legal identity

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33
Q

Limited company

A

Legal identity and legal person itself, the profits are subject to corporation tax, owner may pay themselves a salary, or through dividends, company liable for debts however owner maybe used as guarantors

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34
Q

Public limited company PLC

A

Larger form if in inc business usually floated in the stock exchange, requires at least 2 directors, 2 shareholders and and allocated share capital of more than 50k, company secretary must be member of professional body, accounts must be out before an agm

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35
Q

Ordinary power of attorney

A

Simplest form - deal w financials while person has mental health, if doesn’t then it defaults

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36
Q

Enduring power of attorney

A

For if lose mental capacity the attorney continue to act on donnee behalf, court need to consent to it

Can be structured in 2 ways immediate action - straight away
Delayed action - does not come into effect until doner loses mental capacity

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37
Q

Lasting power of attorney

A

Financial and ALSO health

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38
Q

Lasting power of attorney will cease on

A

Bankruptcy of donor
Death or bankruptcy or attorney
Divorce or dissolution of civil partnership

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39
Q

Contracts and agency

A

For a contract to be valid the following needs to occur

Offer - one person other the offer the chance engage in a contract

Acceptance the other person accepts

Intention - there must be an intention to enter a contract

Consideration - there is some form of payment from one to another

Metal capacity and 18

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40
Q

Non disclosure

A

Reasonable - mistake
Careless - misread it forgot to mention
Deliberate or reckless - contract void

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41
Q

The law of agency - whom an agent is acting

A

Tied financial adviser - agent of company they represent

IFA - independent

Ties adviser - as adv is agent of insurer telling adv is telling the insurer

Independent adviser

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42
Q

Property and ownership

A

Joint tenants - 100% by each person. If one die other person gets passed 100% ownership

Tenants in common - each person owns set % and is passed to who in will

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43
Q

Ownership basis

A

Freehold - own property and land
Leasehold - own property but not land
Common hold- own property and joint own land
Shared ownership - a equity loan is provided by government to help w deposit of new build

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44
Q

Wills

A

When someone dies there property is said to pass to someone else through ‘law of succession’ how this applies depends on the person’s will.

Order of events is as follows -

Death, executors list liabilities and assets, pays IHT, grant probate, estate passed in accordance to will.

For a will to be valid -

In writing, signed, witnessed by 2 people

Can be invalidated by - physical destroyed, marriage, creation of new will.

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45
Q

Intestacy

A

Someone w no will, in this case there is a set order for it to take place, an administrator is set someone who knows person died, will ask court of letter administration.

Any joint ownership pass to survivor
Spouse and no children - pass to spouse
Spouse and children - spouse gets personal assets, and 270k plus half amount above that, children get other half split put in trust till 18
No spouse but children, children get all but on trust till 18
No spouse no children - parents siblings…
No family - to the crowne

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46
Q

Trusts - people involved

A

The settlor - person who puts assets in a trust

The trustee - manager of assets

Beneficiary - person’s who receive

Avoids probate

Looking after assets of minors

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47
Q

Forms of trusts

A

Absolute / bare trust - cannot be changed

Discretionary trust - all my friends on FB e.g.

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48
Q

Setting up a trust

A

Words - words used should show clearly that there is an intension to create a trust

Subject - the property held in the trust must be certain

Object - the persons to benefit from the trust must be certain

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49
Q

Administering a trust

A

Anyone can be a trustee providing over 18 but can be removed if

They resign
Die
Removed by courts trust act
Removed by other trustees

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50
Q

Bankruptcy and insolvency

A

Bankruptcy refers to individual
Insolvency firm
In both cases a legal arrangement to recover as much debt as possible.

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51
Q

Individual voluntary arrangement IVA what is it?

A

Alternative to bankruptcy - creditors agree not the file legal action for an agreed payment arrangement

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52
Q

How does an IVA work?

A

A vote of creditors takes place, who represent least 75% of debt. Voting to agree on IVA,
The fees associated to the arrangement are added to debt and repayment schedule is agreed
An insolvency practitioner is appointed to oversee the arrangement and report annually to creditors
The IVA will come to an end if either default of debt paid
On register of IVA and credit score impacted for 6 yrs

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53
Q

Bankruptcy

A

Where someone has at least of 5k debt and no other solutions can be found, the court will look for evidence attempts have been made to recover it

If the requirements are met the court will appoint the ‘official receiver’ to ask creditors to appoint ‘trustee in bankruptcy’ to take possession of debtor assets and seek to repay as many of the creditors, leaving only few things, tools for trade, clothes and furniture

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54
Q

The cost of bankruptcy how a debt is paid

A

Preferential debts - wages or pension contribution

Ordinary unsecured debt - any assets left split between creditors - usually last 12 months and after the person may be barred from jobs like financial services

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55
Q

HM Treasury

A

The treasury (exchequer) is a Government department responsible for public finance and economic policy, responsible for setting level of taxation and spending and is headed by chancellor of exchequer

Note: not directly responsible for fca or bank of England

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56
Q

Bank of England

A

Monetary stability - the government sets the bank a target for inflation and the bank is responsible for achieving this target, if the target is missed the governor of boe is required to write to the chancellor to explain why

Financial stability - ensuring the financial system is robust and stable, i.e set interest rates

Boe is responsible for financial policy committee and the Prudential regulation authority

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57
Q

The Prudential regulation authority

A

A limited company owned by the bank if England

Oversee the largest financial institutions over 1700 banks with 2 objectives

-the promote the safety and financial soundness of the firms
-to help secure an appropriate level of protection for consumers, also to facilitate effective competition

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58
Q

The PRA how the work is done?

A

It’s work is done at an individual level
Carries out work with a twin approach

Judgement based - excersice it’s judgement if a firm is sound
Forward looking - not only now but what might arise in the future
Focussed - as above looking at those firms and areas that pose the greatest risk

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59
Q

The financial policy committee

A

This is a macro level committee of the boe tasked with looking at the entire financial system and spitting emerging risks
Chaired by governor of boe

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60
Q

The financial conduct authority

A

Independent of the government and financed by levy on all regulated firms

Make markets function well
Protect customers
Look after smaller firms
Promote competition
Sustainable growth
Senior Management responsibility

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61
Q

The pension regulator

A

Check pensions in check from firm level fines if not individual 5k and firm 50k

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62
Q

The information commissioner ico

A

All to do with GDPR

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63
Q

Competition and markets authority. (Cma)

A

Markets are competitive, avoid any collusion between large firms…

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64
Q

Statutory frameworks - European supervisory authorities ESA

A

Treaties
Legislation
Decisions
Directives
Regulations

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65
Q

Markets in financial instruments directive (MiFID)

A

One European financial market
Remove barriers

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66
Q

FCA has 3 main focuses

A

To protect consumers
Protect integrity of financial markets
Promote competition

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67
Q

Obtaining FCA authorisation

A

Called ‘part 4a permissions’

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68
Q

FCA is involved in a number of key activities

A

Direct authorisation of those not covered by PRA.
Acting as the policeman for the financial services industry
Monitoring, overseeing other bodies like LSE

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69
Q

FCA activities include

A

Governance of product design
Overseeing corp culture
Examination of sales prices
Risk management
Prevention of crime

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70
Q

FCA does not cover

A

Buy to let mortgage
Occupational pensions
Compensation claim handlers

71
Q

Reporting lines for fca

A

FCA report into the treasury for it’s actions although it is an independent company, FCA required to make annual reports to parliament in respect to it’s activity

72
Q

FCA also has dotted line to other Bodies

A
73
Q

FCA operates a risk based approach with a combination of the following methods

A

Impact - how significant is the event it it were to happen
Probability - how likely is it to happen
Proactivity - is it fair treatment to customers?
Event driven reactive work - a risk has been missed and an issue has arisen or simply due to a global event
Thematic - common themes and different sectors that could cause consumers to be disadvantaged
Banning retail products, removal of adverts, enforcement action, market intelligence,
Fixed portfolio - larger higher risk firms
Flexible - less risky

74
Q

Principles of supervision FCA

A

10 principle approach
Ensuring fair outcomes for consumers and markets
Being forward looking and prempt
Being focussed on the big issues
Taking a judgment based approach
Firms act in the right spirit
Examine business model and culture
Individual accountability
Robust when things go wrong
Joined up approach
Open communication

75
Q

Compliance monitoring FCA

A

Each firm is responsible for compliance, fCA can visit any time without notice, staff expected to be fully compliant

76
Q

FCA enforcement

A

Making public announcement
Setting conditions for future business
Ordering compensation to be paid
Deathorise firms
Impose disciplinary action against firm or individual
Civil action
Criminal prosecution

77
Q

FCA offences that reach court

A

Summary only - can be heard by magistrates
Indictable - heard by crown court w jury
Either way

78
Q

Prudential regulation

A

Translates into the rulebook and capital adequacy requirements - in broad sense large firms need to have sufficient capital resources to meet liabilities and this is tested to stricter standards then used to
Example used can be free asset ratio
Stress tests should be completed at least annually

79
Q

FCA handbook - 9 blocks

A
80
Q

FCA block 1 - the high level standards

A

Big picture - principles of business
Integrity, skill care, management and control, market conduct, customer interests, conflicts of interest
Fit and proper test for approved person’s
Training and competence,

81
Q

FCA block 2 - Prudential standards

A

This is the amount of capital the firm will be expected to gold to meet it’s obligations this measure is known as capital adequacy
Prudential sources books around this

82
Q

FCA block 3 - business standards

A

Conduct of business sourcebooks (cobs) - rules around life and pensions arena
Insurance conduct if business sourcebooks (icobs) - IP term insurance and CIC, general insurance, pure protection, ppi,
Mortgages and home finance: conduct of business (mcob)

83
Q

Right to cancel

A

General insurance usually 14 days
Pure protection and ppi 30 days

84
Q

FCA block 4 - regulatory processes

A

Supervision - ensure firms are complying with their rules

Decision procedure and penalties - disciplinary actions ect.

85
Q

FCA block 5 - redress and compensation

A

Right to complain to financial ombudsman if firm is unable to resolve,
Note complaints commissioner

86
Q

FCA block 6-9

A

6 specialist sourcebooks
7 listing prospectus and disclosure
8 handbook guides for specialist areas
9 regulatory guide

87
Q

Consumer credit - worth a mark

A

Consumer credit act 1974 - for anyone providing credit up to 25k
Consumer credit act 2006 - not only individuals but sole traders and partnerships with 3 or fewer partners
Consumer credit directive - aer
Unfair contract terms -concerns not transparent or prominent

88
Q

At what level do FCA application fees start?

A

1500

89
Q

What does mcob stand for?

A

Mortgage and home finance conduct of business

90
Q

Under the mortgage market review, who is ultimately responsibility for ensuring the affordability

A

The lender

91
Q

Both FCA and pra have statutory duty to

A

Contribute to protecting and enhancing the stability of the financial systems of the uk

92
Q

Which directive requires larger firms to undertake detailed risk assessment and stress testing to calculate their capital requirements

A

Capital requirement directive

93
Q

Ifa document use to show status and range of status

A

Initial disclosure document

94
Q

Contract terms must be

A

In plain and intelligible language

95
Q

The FCMA financial services and markets act

A

No one should undertake any regulated activity without Bering authorised to do so

96
Q

Making an application to be regulated

A

No regulated activity should commence until ‘part 4a permissions’ has been received. Larger firms e.g. new insurance firms will apply to the PRA to asses capital and fca from conduct perspective. Smaller firms will only apply to fca
Applications can take 6 to 12 months

97
Q

Change if status for regulatory authorisation

A

If a business changes its legal status eg sole trader to limited company, it will need to reapply for permissions unless one person dies in a partnership

98
Q

Consequences and responsibility of becoming authorised

A

Compliance with regulators regulations
Ensuring firm has sufficient capital
Ensure anyone in a controlled function tile has the necessary permissions

99
Q

Authorised person - not a person but rather the firm. It will be a person only if a sole trader

A
100
Q

Approved person

A

This is an individual approved by the regulator to perform a controlled function an actual person who is in a senior capacity

101
Q

Senior management and certificate regime

A

Initially to cover senior staff within large firms but now covering most people- key aims are:

Clarity of responsibility
Improved corporate governance and accountability for decision making
Clarity of who runs business
Placing emphasis on responsibility on firms rather than fca

102
Q

Sm&cr identifies three types of firms in terms of application of requirements

A

Limited scope firms - usually small business
Core firms - subject to baseline regime
Enhanced firns - large, complex business which are subject to enhanced requirements

103
Q

People should be fit and proper under sm&cr

A
104
Q

Appointed representatives

A

Prevent conflict of interests
Ensure are fit and proper
Ensure principals have necessary systems and controls to be responsible for AR conduct and actions

105
Q

When recruiting candidates should have the right level of experience and qualifications

A
106
Q

Staff should show competence before being allowed to operate, managers should show a gap analysis on staff and look to improve

A
107
Q

35 hours of CPD should be completed on a rolling 12 months basis

A
108
Q

Inducements - a thing that persuades or leads to do something

A

Can’t do excessive bribes that influences a decision

109
Q

Record keeping

A

If it is not written down it did not happen
Records should be kept indefinitely if regarding: pension transfers, free standing AVC, this is because regarded as high risk
5 years for most other cases
One exemption is financial promotions that relate to life and pension promotions: 6 years

110
Q

Complaints procedure

A

A complaint is an expression of dissatisfaction
A complaint does not have to be valid as should not be pre judged
Info for exam r this: a small business known as micro enterprise, few than 10 staff or turnover Eur2m
A small bus w less that 50 employees or £5m
A charity w income less than £6.5m or trust w net asset under £5m

111
Q

Complaints procedure

A

Each firm should have and publicised a complaint handling process
Make them aware covered by ombudsman
A senior member of staff should be appointed as a complaints handling function

112
Q

Complaints procedure

A

Mandatory steps :

The customer should be sent an acknowledgement within reasonable timescale - historically 5 working days

After 4 weeks if not resolved the customer should be sent a holder letter explaining it is still being investigated

After 8 weeks or earlier if completed a letter will be sent w the final response or a holding letter explaining when firm expects to complete the process, at this point the firm should notify the customer their right to take to financial ombudsman

If the complaint is upheld they should make appropriate compensation or action

113
Q

Complaints procedure

A

A referral to financial ombudsman (FOS) should be made 6 months of receiving the right to go to FOS or

6 years of event in question or 3 years of becoming aware

114
Q

FOS is and independent adjudicator under the fca control

A

It’s final decision on are binding to the provider but not the complainant who can reject and take it to court

375k for cases after 1/4/22 and 170k before or after 1/4/19
Plus interest and costs

115
Q

Financial services compensation scheme

A

Confidence would be damaged id a firm failed an unable to meet obligations as such all regulated firms required to pay a levy to financial services compensation scheme
Inve / savings - 100% on 85k
Long term ins - providers faill 100%, immediary 90%
General ins - compulsory 100%, non compuls - 90%
Pensions - insured pen scheme: 100%, SIPP - 100% up to 85k

116
Q

Anti money laundering

A

3 stages

Placement- dirty funds placed in some sort of financial product i.e bank acc or investment

Layering - moved around system via transactions i.e. moved to account then inv product

Integration - the investment is surrender resulting in a clean cheque that can be paid into account as clean money

117
Q

Proceed of crimes act 2002

A

Firm should have a money laundering reporting officer MLRO

Report suspension and people doing it, telling them is tipping off and an offence

MLRO will then decide if should be passed to national crime agency NCA by filing a Sus activity report SAR

118
Q

Proceeds of crime act also established assets recovery agency (now part of NCA) which by obtaining court order confiscate and or tax the proceeds of crime. The agency has wide powers when obtaining the info

A
119
Q

Data protection

A

Gdpr 2018 replace data protection act 1998
Data should be processed lawfully, fairly, transparent, specific to purpose, accurate and up to date, not be kept longer than needed, confidential and secure
Penalties can but high 20m or 4% global gross revenue

120
Q

Information

A

Is stating the fact

121
Q

Advice

A

Is the expression of opinion

122
Q

Provider guidance Vs generic guidance

A

Provided- info supplied by representative of product provider
Generic - non product specific

123
Q

MoneyHelper

A

Responsible to give people guidance set up by government and paid by financial services - free impartial info

124
Q

Financial advisers - independent Vs restricted

A

Independent have whole of market advice
Restricted - tied - selling the products of a single provider OR multi tied- selling the products of provider on their panel

125
Q

When an adviser operates tied or multi tied they can only recommend where demonstrate it is suitable

A

Cannot simply just recommend most suitable product out of options

126
Q

Adviser must disclose

A

Level of service - will the firm offer advice or not
Basis of advice - restricted or not
Fees and commission
How to make a complaint
Loans and ownership
Regulatory status

127
Q

Customer types

A

Retail- individuals and most smaller businesses - highest duty of care is given to retail customers as least knowledge
Professional - lower duty if care as should have sufficient knowledge
Professional broken down into 2 subsection - per se pro - banks government’s AND elective pro - other bodies
Eligible counterpart - lowest level of duty care - professional clients

128
Q

Categorisation for general business insurance

A

Consumer - a person, not acting in respect of their business
Commercial customer- anyone not covered by advice definition
Customer - this covers consumers and commercial customer

129
Q

FCA communication w customers

A

Be clear, fair and not misleading

130
Q

FCA - communication w customers

A

Real time - i.e speaking - occur during normal hours
Cannot cold call
Non real time ie written Comms - must be signed off timings below

Pension transfers - indefinitely
Life and pensions - 6 yrs
Others cases for mifid - 5 yrs
All other non mifid - 3 yrs

131
Q

Direct offers

A

Are allowed but subject to certain restrictions

132
Q

Fair treatment of customers - of of the essential pillars of FCA regulation

A

Outcomes 1 - 6

Consumers can be confident they are dealing w fair treatment
Products and services sold are suitable
Provided w clear information
Suitable in needs of circumstances
Do not face unreasonable post sale barriers

133
Q

Fiduciary relationship means trust and treating customers fairly

A
134
Q

Demonstrating suitability - letter

A

Lay out customers situation and reasons for being recommended,
Needs wants gots
Risk factors of customers
Need to disclose -
Costs, product governance
Suitability
Recording of conversations
How inducements are treated

135
Q

Product disclosure

A

Aims, risks, commitments, terms of inv, cancellation rights, complaints procedure, compensation arrangement

136
Q

Application forms

A

Should be signed by customer After fully understood complete and filled in
Should be followed up in writing

137
Q

No suitability is needed for

A

Top ups to existing premium policies
Increase to regular premium
Where someone outside eea and not in UK at time of agreeing recommendations

138
Q

Cancellation rights

A

Life and pension - 30 days
General insurance 14 days

139
Q

Cancellation of policies taken seriously by FCA because

A

Indicates consumers sold something don’t want
Records kept indefinitely for pensions, 5 years for life and pension contracts and 3 for all other cases

140
Q

Acting with or against advice

A

Advice is not required in all cases
Nonadvised - the client is given enough info to make informed decision
Execution only- this is where no advice is given and the client is acting on own accord
Insistent customer - give advice and client does the opposite - if case adv should send letter and customer should send letter back saying not going ahead

141
Q

Vulnerable clients

A

Driven by health, life events, poor resilience, capabikity

142
Q

Reviews

A

Should take place annually or where change in circumstances

143
Q

3 types of products to make it simple

A

Short term - deposit acc w minimum premium and NI more than £10
Medium term - collective inv could sit with isa wrapping not more than £20 premium
Long term - stakeholders pension w lifestyle fit in min could no more than £20

144
Q

Fact finding

A

Basic personal information
Family details
Employment status
Income and expenditure
Loans & liabilities
Existing protection, s&I
Wills and PoA
Attitude to risk
Ethical.issues
Any other advisers

145
Q

Analysing and evaluating the clients financial status

A

Identify - areas they need/what need
Discuss - discuss clients views
Quantify - using KYC info to agree shortfall
Prioritise - where the budget is limited decide on where to spend money from pimpsi

146
Q

Implementing the financial planning recommendations

A

Suitability letter - should be clear, fair and not misleading

Should include- background to recommendations
Shortfalls through analysis
Product recommendations and why
Features advan and benefits
Risks
Costs and charges
tax consiquence

147
Q

FCA sets principles and outcomes expected for morals

A
148
Q

FCA principles for ethics

A

Integrity
Skill, care and due diligence
Management and control
Financial prudence
Market conduct
Customer interests
Comms w customers
Conflict of interests
Client assets
Relationship w regulators

149
Q

Ethics by FCA for individuals

A

Integrity
Skill, care and attention
Market conduct
Opens n cooperation
Organisation and control
Compliance - fit and proper
Financial soundness

150
Q

Senior management and certification regime

A

Firms must allocate prescribed responsibility across senior management
Conduct rules must be adhered to-

151
Q

Corporate culture

A

Leadership
Strategy
Decision making and challenge
Controls
Recruitment and tandc
Reward

152
Q

Bribery act 2010

A
153
Q

Need to be compliant and ethical not just compliant

A
154
Q

Operational implementation

A

Policies and procedure
Training and competence
Recruitment
Pay structure
Job description
Comms
Performance management

155
Q

GCC - governance, risk management and compliance

A
156
Q

Stakeholders and CSR

A

Good corp social responsibility and showing me tell me and prove it!!

157
Q

Management information

A

Accurate
Consistent
Relevance
Timeliness
Seen
Challenged
Analysed and monitored
Acted upon
Recorded

158
Q

Handling ethical dilemmas

A

Don’t rush to judgement find out all you can
Talk through situation
Identify ethical principles involved
Firms code of ethics
Consiquences if choice
Make decisions and share w involved
What can do to avoid in future

159
Q

In terms of ethics firms are being asked to move from

A

Tell me and show me to prove to me

160
Q

IVA individual voluntary arrangement - where payment plan set up 75% to recover as much assets

A
161
Q

Bankruptcy - where debtor has at least 5k and no other solutions can be found

A
162
Q

Order bankruptcy debt is paid

A

Cost of bankruptcy
Preferential debt
Ordinary unsecured debt

163
Q

Mortgage options

A

Diminishing musharaka - firm buys then sells back in slices
Ijara- payments made - provider still owns till property fully bought

164
Q

GRC

A

Governance, risk management and compliance

165
Q

What is a bancassurer

A

Bank offering FS to the public

166
Q

FC

A

Financial crime and relates to all 9 blocks

167
Q

Maximum that the FOS can award as compensation

A

355,000

168
Q

Law of agency

A

Contractual relationship between client and adv

169
Q

How long does an IVA remain on a credit reference for

A

Least 6 years from start of IVA

170
Q

Role of FCA

A

Make markets run when and guard dog of the industry

171
Q

9 handbooks - one block has 11 principles for business

A
172
Q

What are exempt from consumer credit act

A

Building societies

173
Q

How often should complaints be submitted

A

Complaints should be submitted every 6 months and kept 3 or 5 yrs if non mifid or mifid

R01 (1 decks)

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