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Financial Studies - Unit Two > Topic 8 > Flashcards

Topic 8 Flashcards

1
Q

What are some examples of interactions either financial services?

A

• Wages and salaries (paid into bank accounts)
• Shopping & bills (plastic card, electronic transfers)
• Buying a home (mortgage)
• **Protecting possessions (insurance)
• Retirement (personal pensions, state pensions)
• Savings (ISAs, premium bonds etc)

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2
Q

What are the features of information and advice?

A

Accurate
Up to date
Transparent
Timely
Sufficient but not too complex

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3
Q

What does it mean by accurate?

A

Describtions of the product & its term and conditions must all be correct

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4
Q

What does it mean by up to date?

A

Must be clear & must not hide anything from customers

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5
Q

What does it mean by timely?

A

The information must be available to the customer at the time they need it

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6
Q

What does it mean by sufficient but not too complex?

A

The information must be enough so customers have a clear idea of what the product offers

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7
Q

What are some factors that influence financial choices?

A

• The original want or aspiration

• Feasibility of access of a financial product to fulfill the want or aspiration

• Information source

• Price & product features

• Personality

• Reputation of the provider

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8
Q

What does the original want or aspiration mean?

A

The stronger the desire for a want or aspiration, the greater the desire for the financial product that’ll make it possible

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9
Q

What does the feasibility of access of a financial product depend on?

A

The persons financial circumstances and how easily they can access the products

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10
Q

What does the price and product features mean?

A

The choice of brand & how a customer may not always choose a more cheap option if the more expensive option is better quality

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11
Q

Why is the reputation of the provider important?

A

For safety & security of the customer

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12
Q

Why are Ethics important in a financial factor?

A

Money and finance depend on trust (if you don’t have the trust of your customers, they won’t use your product)

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13
Q

What is the role of the Financial Conduct Authority?

A

• Protect customers
• Enchance integrity of the financial system
• Promote effective competitive competition

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14
Q

What is the role of the Prudential Regulation Authority?

A

• Promote the safety and soundness of firms
• Protect insurance policyholders

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15
Q

What does it mean by treating customers fairly?

A

Providers are expected to put the well-being of customers at the heart of their businesses

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16
Q

What are the outcomes of treating customers fairly?

A

• Products designed to meet needs of consumers & targeted accordingly

• Consumers provided with clear information

• The advice suitable & consumers circumstances are taken into account

• Provided with products & services that perform as expected

17
Q

What are some examples of poor practice with customers?

A

• Financial advisor conceals information from a customer

• Charges that are made out of proportion

• Provider sells a product that is unsuitable for a consumer’s circumstances

18
Q

What is an issue that arises from executive pay?

A

Received adverse comments from the press & the general public

19
Q

What are some stakeholders that may be affected by actions of financial service providers?

A

• Customers
• Employees
• Communities
• Environment

20
Q

What is the the corporate social responsibility?

A

It refers to any action or project in which a company goes beyond the interests of its shareholders

21
Q

What are some examples of how FSPs get involved in charity work?

A

• Offer free banking
• Paying into charities
• Partnerships

22
Q

What is sustainability and what does it do?

A

The way we live now & in the long term
• It ensures that the present standard of living can continue into the future

23
Q

How can sustainability be approached according to the UN?

A

• Environmental sustainability
• Economic sustainability
• Social sustainability

24
Q

What is environmental sustainability?

A

It reduced the negative human impact on the earths ecosystem

25
Q

What is economic sustainability?

A

It reduces the undesirable consequences of economic activity

26
Q

What is social sustainability?

A

It creates communities that foster well being, peace, security & justice

27
Q

What are the ethical & sustainability issues people may reconsider when choosing products?

A

• Environmental (impact on climate change)

• Social (treating people fairly)

• Governance (how a businesses standards reflect its responsibilites)

28
Q

What are some features of Islamic Banking?

A

• Free of interest
• Made in permissible activities
• Separately approved by an independent Sharia supervisory board

29
Q

What happens in the rules of the Sharia supervisory aren’t complied with?

A

They would have to pay money to charity

Financial Studies - Unit Two (9 decks)

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