Topic 9 - Sources of Info + Advice Flashcards
1
Q
Why do ppl need advice + info before making a buying decision?
A
- to help make an informed choice
- must stay informed during period they use product
2
Q
What should ppl also take into account when making a buying decision?
A
- factors that might change during period they’re using product (e.g. personal circumstances)
- should seek updated advice every yr to ensure financial plan is still on track
3
Q
Why can making a bad choice have unfortunate consequences when using a MT + LT product?
A
- they’re relatively inflexible + ppl must know these facts before committing themselves
- experience problems if don’t understand agreement they’re making
4
Q
What are the 3 main elements ppl need to bring together before making a financial decision?
A
- own needs, wants + aspirations
- solutions + providers available
- details of product brands
5
Q
What 3 things does a potential customer need to know?
A
- themselves
- solutions available + their providers
- product brands
6
Q
What does a potential customer need to know ab themselves?
A
- present financial position; if they keep a monthly budget
- aware of assets + liabilities they own
- consider financial risks + how well protected they are from these risks
- financial personality
7
Q
What do potential customers need to know ab. product brands offered by various providers under each general heading?
A
- benefits they may gain from them
- costs + risks
- extent of flexibility
- service lvls
- terms + conditions
- degree they match w someone’s requirements
8
Q
What do financial services firms provide ppl w?
A
- info + advice ab their own products but won’t recommend those of competitors
9
Q
What must providers give prospective customers?
A
- clear, relevant info that’s not misleading + highlights any special risks
10
Q
What should a provider point out to the customer to try to ensure the product is suitable for the customer’s circumstances?
A
- any costs, penalties or other obligations attached to product
11
Q
What are the ways ppl can obtain info direct from providers?
A
- marketing brochures + leaflets
- provider websites
- TV + radio adverts
- provider staff
12
Q
How can ppl obtain info from marketing brochures + leaflets?
A
- can go into branch of a bank/building society + pick up leaflets + brochures on product they want
- through post
- through telephone marketing
13
Q
What do brochures + leaflets do?
A
- gives details ab who product is intended for + how it works (in general sense)
14
Q
What do provider websites contain?
A
- info on wide range of products offered under various headingw
- ways prospective customers can buy + manage products online
15
Q
What do most provider websites include?
A
- a facility where ppl can email Qs
- a helpline number so can discuss requirements or problems w a member of staff
- usually have facility for prospective customers to make an application online
16
Q
What are TV + radio adverts intended for + inc?
A
- to mainly publicise provider’s name
- don’t give lots of info
- seek to build awareness of brand
- terms + conditions always given at bottom of screen
17
Q
What are 2 ways a customer can arrange an interview to discuss their financial needs w a member of staff?
A
- at a branch
- asking for a home visit
18
Q
What is advised when customers ‘shop around’ by arranging interviews?
A
- arrange interviews w representatives of several providers bc will only relate to products provided by own particular company
19
Q
Why is info available from the mass media unlikely to be aimed at making sales?
A
- it doesn’t originate w providers
20
Q
What are the advantages and disadvantages of info from the media?
A
- free
- good source of info
- unreliable (may be biased + incomplete)
- don’t know if products being discussed are suitable for their needs
21
Q
What are the main types of media sources?
A
- money box
- newspapers
- price comparison websites
22
Q
What is Money Box?
A
- a programme on BBC Radio 4 describing itself as giving ‘The latest news from the world of personal finance + advice for those trying to make the most of their money’
23
Q
What does Money Box give info on?
A
- financial products but doesn’t aim to market them
24
Q
What is a Money Box’s main purpose?
A
- to identify problems that ppl might be having w particular products or to warn listeners against scams
25
What do most of the UK’s national newspapers have?
- a personal finance/money section in both paper versions + online website
26
What does the personal finance/money section in UK National newspapers contain?
- a selection of current stories on personal financial products + warnings against problems + scams
27
Why have price comparison website been dev?
- to enable customers to compare financial products more easily + so to make informed choices
28
What do price comparison tables contain?
- ‘best buy’ tables + quotation tools
29
Why are customers still advised to spend time researching various products even after using price comparison websites?
- bc comparison websites might not compare like w like
30
What does price comparison websites often being ‘brokers’ for the products they inc. mean?
- company running the website earns commission from financial services provider if ppl buy a product via its comparison site
- may influence products a site inc + recommends
31
Why are ppl advised to consult several price comparison websites before making a decision?
- tend not to have a ‘whole of market’ focus so excludes certain products that may be more suitable for an individual than 1s listed
32
What are the advantages of using price comparison websites?
- consumers can access an at-a-glance list of products from diff providers + so helps to make a choice
- consumers can get info on a number of providers w/o contacting each separately + so saves time
- consumers can find ‘best buy’ tables
- consumers can enter own specifications + find products to suit needs
33
What are the disadvantages of price comparison websites?
- not everyone has access to a computer + some ppl aren’t computer-literate
- some aren’t reliable
- gives headline details but consumers should read small print to find out terms + conditions
- some are sponsored by specific providers who may push own products + not give impartial advice
34
What is MoneyHelper?
- an independent service originally set up under the Financial Services Act 2010 as the Consumer Financial Education Body
35
What 3 older gov-backed services does MoneyHelper combine support + advice from?
- Money Advice Service
- Pension Wise
- The Pensions Advisory Service
36
What is MoneyHelper’s statuary objective?
- to enhance understanding + knowledge of public ab. financial matters, inc. UK financial system, + to enhance ppl’s ability to manage own financial affairs
37
What does a money or financial health check look at?
- a persons overall financial position in relation to circumstances + aims to anticipate future events
38
 What are the questions on money health check questionnaires ab?
- various aspects of an individual’s finance attitudes + situation
39
What are some examples of what the question in a money health check question are ab?
- attitudes to managing money
- age, marital status, work situation of themselves + partner
- if they own home or have a mortgage
- any ppl who financially depend on them or if they depend on someone
- how far their money stretches
- how far they rely on borrowing
- if they have accessible savings
40
What happens once someone completes a money health check questionnaire?
- gets feedback in form of an action plan that’s broken down into steps to show what needs thinking ab + what can be done
41
What does MoneyHelper have responsibility for?
- financial education
42
What are some topics that MoneyHelper gives info on?
- different life events
- everyday money + benefits
- money topics
- tools + resources
43
What info does MoneyHelper give on the topic ‘different life events’?
- advice on life events (inc. setting up home, having a baby, losing a job, divorce)
- info ab. financial implications, legal position, how someone can go ab making financial plans to deal w it, financial products that may be useful + how they work
44
What info does MoneyHelper give on the topic ‘everyday money + benefits’?
- advice, tips + tools to help some1 get finances under control + to make money go further
- inc. budgeting, reviewing or dec. borrowing, money-saving tips etc.
45
What info does MoneyHelper give on the topic ‘money topics’?
- sections on:
- saving
- investing
- borrowing money
- debt management
- work
- insurance
- pensions
- retirement
46
What info does MoneyHelper give on the topic ‘tools + resources’?
- inc:
- calculators + budget planners
- comparison tables
- letter templates
- action plans
- blog ab financial news
47
What is the aim of the FCA?
- to protect consumers
- to ensure that the financial services industry remains stable
- to promote healthy competition between financial services providers
48
What does the FCA website contain lots of info on?
- main groups of financial products
- how customers can protect themselves against bad products
- mis-selling + scams
- making complaints + receiving compensation
49
What is the aim of the UK’s Competition + Markets Authority?
- to make markets work well for consumers by promoting + protecting consumer interests while ensuring businesses are fair + competitive
50
What does the Competition + Markets Authority contain info ab?
- it’s announcements
- consultations
- publications
51
What is citizens advice?
- a registered charity + is the membership organisation for Citizens Advice Bureaux 
52
Where does citizens advice deliver advice services from?
- > 2500 community locations in England + Wales + is run by 280 individual charities
53
What does Citizens Advice help to do?
- resolve legal, money + other problems by providing free, independent, confidential + impartial advice on their rights + responsibilities
- + by influencing policy makers to improve policies + practices that affect ppl’s lives
54
What do successful Citizens Advice campaigns from recent years inc?
- promoting awareness of scams
- improving customer service + choice for prepay energy customers
- fair treatment for ppl using payday loans
- changing law so customers can choose to cap mobile phone bills
- a ban on letting agent fees for tenants
55
What was StepChange Debt Charity formerly called?
- the Consumer Credit Counselling Service
56
What does StepChange Debt Charity provide?
- free expert + impartial advice that ppl need when debts get out of control + suggests practical solutions
57
What are the 3 steps StepChange sets out for a debt-free future?
- decide to get debt help
- access debt advice via its anonymous online Debt Remedy tool, or call telephone debt helpline + speak to an expert adviser
- use practical solution that works for them
58
What is National Debtline?
- a national telephone helpline for ppl w debt problems in England, Wales + Scotland
59
What does National Debtline do?
- give specialist advice over telephone + discusses ppl’s options
- free, confidential + independent service
60
What does National Debtline’s debt advice inc?
- a self-help pack
- fact sheets
- guides + review packs
- a personal budget sheet
- debt options
- sample letters
61
What are financial advisers?
- ppl holding a qualification to give financial advice to customers
62
What are the 2 headings financial advisers can be classed into?
- independent
- restricted
63
What is the distinction between the 2 types of financial advisers covered by?
- the Retail Distribution Review rules + are monitored + authorised by the FCA
64
What do independent financial advisers provide?
- independent advice that considers all types of retail investment product that may meet a client’s needs + objectives
65
What must a financial provider do to be classes as independent?
- offer a broad + comprehensive range of retail investment products
- give consumers unbiased + unrestricted advice based on comprehensive + fair analysis of relevant market
- tell consumers they operate as an independent advisor before providing any advice
66
What can restricted advisers do?
- recommend only certain types of products from 1 or a limited number of providers
- only offer advice on particular products of particular companies
67
What may restricted advisers choose?
- to specialise in a particular market (e.g. pensions or ethical investment) + will be able to recommend products from all providers that operate in this market
68
What is ‘execution only’?
- when a customer chooses to get a mortgage w/o any advice
69
How were many advisors paid before the Retail Distribution Review?
- by receiving a commission from the firms whose products they sold
- client paid indirectly bc cost of advisors commission was inc. in cost of product
70
What does the Retail Distribution Review prevent?
- financial advisors + sales staff from being paid commissions by firms whose products they’re selling
71
What does the Retail Distribution Review apply to?
- sale of investments (e.g. pensions, annuities + unit trusts)
- not to some mortgages + insurance policies
72
What is the aim of the Retail Distribution Review?
- to stop sales ppl from pushing the sale of products paying them biggest commission
73
What is the purpose of the rule ‘each adviser or sales person must declare their status to customer’?
- to ensure financial advisors give customers a service that’s relevant to their circumstances + in their best interests
74
What is the disadvantage of the rule ‘each adviser or sales person must declare their status to customer’?
- financial advice is expensive + many ppl wouldn’t be prepared to pay for a consultation if they realise cost
- only wealthy ppl can afford high-quality advice
75
Why might a person wanting advice, go to family + peers?
- may feel confident some1 close to them has their interests at heart
- has a good knowledge of personal circumstances, personality + want + aspirations
76
What are the disadvantages of using family + peers as a source of advice?
- may be unreliable
- may not have good knowledge of financial products
- don’t know if product suits person they’re advising
- key aspects of product might have changed
