Topic 1 - Financial Planning And Money Management Flashcards
- Explain what is meant by the term 'Financial planning, money management, and others - Outline the need for financial planning - identify financial services providers and basic products - Identify sources of financial planning and advice
What is the purpose of an insurance company?
To provide policies that help reduce the financial risk should something happen
What do banks provide?
Banks provide a safe place for people to keep their money, provide a facility for the transfer of funds (paying bills, receiving payments, etc.), and they can provide loans/mortgages for customers who need to borrow money.
They also provide Mortgages, Personal Loans, and Credit Cards
What is the purpose of Building Societies?
They provide money deposited by customers (Savers) to their members for the purchase/construction of physical assets, such as houses. They are owned by their members rather than shareholders.
What is the purpose of insurance companies?
To provide policies that help reduce the financial risk should something bad happen, and are designed to pay out money to cover any posses in the event of a claim. The more likely they are to pay out money, the more they will charge the customer for the policy.
What is the Citizen’s Advice Bureau?
The role of ‘CAB’ is to help people sort out their legal and money problems. The service is free and impartial, and is offered face to face at local clinics. They also offer services that give advice on domestic affairs, and a plethora of others.
Who is an Independent Financial Advisor (IFA)?
Someone who can recommend products and solutions from the entire market, because they are not allowed to favour one paticukar company over another. They MUST provide impatial advice, only in the best interest of their customer.
Who are ‘Restricted advice’ Financial Advisor?
They can only offer recommendations from one paticukar company. (e.g. A banker would only offer financial advice on the range of products from their bank) If they cannot recommend a suitable product, they shouldn’t give a recommendation at all.
Who are ‘The Money Advice Service’?
An independent body setup by the government to help people with their finance affairs. The service is offered free face to face over the phone or on the Internet.
