R01 Flashcards
(250 cards)
1
Q
What is financial planning?
A
It’s helping people manage their money to meet their goals.
2
Q
What do financial advisers do?
A
They guide people on saving, investing, and protecting money.
3
Q
What does a regulated financial service mean?
A
It’s checked by rules to make sure it’s safe and fair.
4
Q
What is the FCA?
A
The Financial Conduct Authority—makes sure firms treat customers fairly.
5
Q
What is the PRA?
A
The Prudential Regulation Authority—checks that banks and insurers are strong enough to stay in business.
6
Q
Why are rules important in finance?
A
To protect people and keep trust in the system.
7
Q
What is TCF (Treating Customers Fairly)?
A
It means always putting the customer’s interests first.
8
Q
What’s a stakeholder?
A
Anyone affected by a company—like customers, staff, or investors.
9
Q
What is a financial product?
A
Something people use to manage money, like insurance or savings.
10
Q
What is a pension?
A
Money saved to use after you stop working.
11
Q
What is a mortgage?
A
A loan to buy a house, paid back over many years.
12
Q
What’s life insurance for?
A
To give money to your family if you die.
13
Q
What is risk in finance?
A
The chance of losing money.
14
Q
What’s diversification?
A
Spreading your money so all of it isn’t at risk.
15
Q
What is an investment?
A
Putting money in something to try and grow it.
16
Q
What is a financial adviser’s duty?
A
To give the best advice for the client, not for themselves.
17
Q
What’s a regulated firm?
A
A company that must follow the FCA and PRA rules.
18
Q
What is the purpose of regulation?
A
To protect customers and keep markets working well.
19
Q
What is ethics in finance?
A
Doing the right thing, even if it’s not in the rules.
20
Q
Why is honesty important in finance?
A
Because people trust you with their money.
21
Q
What’s a conflict of interest?
A
When your own benefit might hurt the client’s best interest.
22
Q
What’s the role of the Ombudsman?
A
To solve complaints between customers and financial firms.
23
Q
What is compensation?
A
Money paid if a firm does something wrong and causes loss.
24
Q
What is anti-money laundering (AML)?
A
Stopping criminals from hiding stolen money.
25
What’s financial crime?
Illegal acts like fraud, bribery, or stealing money.
26
What is the FSCS?
The Financial Services Compensation Scheme—pays money if a firm goes bust.
27
What is a client fact-find?
A form advisers use to collect information about the client’s finances and goals.
28
What is suitability?
Making sure advice fits the client’s needs and situation.
29
What is a key feature document?
A short guide that explains a financial product in simple terms.
30
What is a cooling-off period?
A few days when a client can change their mind and cancel a product.
31
What is an authorised firm?
A firm the FCA allows to give financial advice or sell products.
32
What does the term ‘capital’ mean?
Money used to invest or start a business.
33
What is inflation?
When prices go up and money loses value.
34
What is interest?
Money earned on savings or paid on loans.
35
What is a bond?
A loan you give to a company or the government, and they pay you interest.
36
What are shares?
A small piece of a company you can buy to earn money if it grows.
37
What is the difference between saving and investing?
Saving is for short-term safety; investing is for long-term growth with more risk.
38
What is a trust?
A way to hold money or property for someone else’s benefit.
39
What is power of attorney?
Legal permission for someone to act for another person.
40
What is bankruptcy?
When someone can’t pay their debts and gets legal help to deal with it.
41
What is a will?
A legal paper saying who gets your money and things when you die.
42
What is intestacy?
Dying without a will—your things go to family by law.
43
What is a regulated product?
A product checked and approved by financial regulators.
44
What is a compliance check?
Making sure firms follow the rules.
45
What is fraud?
Lying or tricking to steal money or gain unfairly.
46
What is bribery?
Offering money or gifts to get someone to do something wrong.
47
What is data protection?
Rules to keep people’s personal information safe.
48
What is due diligence?
Checking carefully before making a deal or giving advice.
49
What is client confidentiality?
Keeping clients’ personal details private and secure.
50
What is a complaint procedure?
A process to sort problems between a customer and a firm.
51
What is a financial objective?
A goal someone wants to reach with their money, like buying a home.
52
What is cash flow?
The money coming in and going out each month.
53
What is a budget?
A plan for how to spend and save money.
54
What is over-indebtedness?
Owing more money than you can afford to pay back.
55
What is a secured loan?
A loan backed by something you own, like a house.
56
What is an unsecured loan?
A loan not backed by any property—like a credit card.
57
What is credit scoring?
A number that shows how likely you are to repay loans.
58
What is APR?
Annual Percentage Rate—the true cost of borrowing.
59
What is protection insurance?
Insurance that pays out if you die, get ill, or lose your job.
60
What is critical illness cover?
Insurance that pays if you get a serious illness.
61
What is income protection?
Insurance that pays you if you can’t work due to illness or injury.
62
What is term assurance?
Life insurance for a set number of years.
63
What is whole-of-life insurance?
Life insurance that lasts your whole life.
64
What are state benefits?
Money from the government to help with living costs.
65
What is the State Pension?
Weekly money the government gives when you retire.
66
What is a private pension?
A pension you or your employer pay into yourself.
67
What is auto-enrolment?
When workers are automatically put into a workplace pension.
68
What is tax relief on pensions?
The government adds extra money to what you save.
69
What is an ISA?
A savings account where you don’t pay tax on interest or profits.
70
What is diversification in investing?
Spreading money to lower risk.
71
What is a collective investment?
A fund where many people’s money is pooled together.
72
What is a fund manager?
A professional who chooses where to invest your money.
73
What is a tracker fund?
A fund that copies a stock market index.
74
What is a stock market index?
A list that shows how a group of shares is doing.
75
What is a portfolio?
A mix of different investments.
76
What is capital gains tax?
Tax on profit when you sell something valuable.
77
What is inheritance tax?
Tax on your estate when you die.
78
What is a trust fund?
A fund set aside for someone’s future needs.
79
What does “fiduciary duty” mean?
A legal duty to act in someone’s best interest.
80
What is a regulated adviser?
Someone approved to give financial advice.
81
What is suitability reporting?
A document that explains why advice fits your needs.
82
What does “restricted advice” mean?
Advice from a limited range of products.
83
What does “independent advice” mean?
Advice from the whole market.
84
What is soft fact?
Personal info, like goals or feelings.
85
What is hard fact?
Clear data, like income or debt.
86
What is capacity for loss?
How much money someone can afford to lose.
87
What is attitude to risk?
How much risk someone is willing to take.
88
What is a risk profile?
A tool to find out someone’s comfort with risk.
89
What is a fact-find?
A full review of a client’s personal and financial info.
90
What is advice gap?
When people want advice but can’t afford it.
91
What is robo-advice?
Online automated financial advice.
92
What is holistic planning?
Looking at the whole picture of someone’s finances.
93
What is lifestyle planning?
Financial planning based on life goals.
94
What is equity release?
Getting cash from your home without moving out.
95
What is annuity?
A product that gives you regular income after retirement.
96
What is drawdown?
Taking money from your pension while it’s still invested.
97
What is a scam?
A trick to steal your money.
98
What is whistleblowing?
Reporting illegal or bad behaviour in a company.
99
What is insider trading?
Using secret info to make unfair profits.
100
What is market abuse?
Doing anything unfair or dishonest in the financial market.
101
What is the Financial Ombudsman Service (FOS)?
A service that helps settle disputes between customers and financial firms.
102
What is the main aim of the FCA?
To protect customers and keep markets honest.
103
What is the PRA mainly responsible for?
Checking that big firms like banks are safe and strong.
104
What is dual regulation?
When a firm is supervised by both the FCA and PRA.
105
What is conduct risk?
The risk of a firm acting in a way that harms customers.
106
What is a regulated activity?
A financial service that needs permission from the FCA.
107
What is a cooling-off notice?
A letter reminding you of your right to cancel a product.
108
What is the Senior Managers & Certification Regime (SM&CR)?
Rules for leaders in financial firms to take responsibility.
109
What does “fit and proper” mean?
Being honest, skilled and suitable for the job.
110
What is money laundering?
Hiding illegal money to make it look clean.
111
What is terrorist financing?
Giving money to help carry out terrorism.
112
What is customer due diligence (CDD)?
Checking a customer’s identity and background.
113
What is a PEP (Politically Exposed Person)?
Someone in public office who needs extra checks.
114
What is suspicious activity reporting (SAR)?
Telling authorities if something doesn’t seem right.
115
What is GDPR?
A law to protect personal data in the UK and Europe.
116
What is a data breach?
When private information is stolen or leaked.
117
What is a compliance officer?
A person who checks if rules are being followed.
118
What is product governance?
Making sure products are fair and suitable.
119
What is the Product Intervention Power?
Allows the FCA to ban or change bad products.
120
What is a Key Information Document (KID)?
A summary of a product’s risks, costs, and returns.
121
What is MiFID II?
EU rules to protect investors and make markets more open.
122
What is the role of HM Treasury?
It’s the UK government department in charge of finance and policy.
123
What is a financial ecosystem?
All the people, rules, and tools that help manage money.
124
What is quantitative easing?
The Bank of England adding money to the economy.
125
What is the Monetary Policy Committee (MPC)?
The committee that sets the interest rate in the UK.
126
What is inflation targeting?
Trying to keep price rises at a steady, low level.
127
What is fiscal policy?
Government spending and tax decisions.
128
What is monetary policy?
Managing money supply and interest rates.
129
What is corporate culture?
The values and behaviour shared in a company.
130
What is ethical behaviour?
Doing what’s right, even when it’s not the easiest option.
131
What is a compliance mindset?
Only doing things because the rules say so.
132
What is an ethical dilemma?
A tough choice between right and wrong.
133
What is the Code of Ethics?
A guide on how to act fairly and honestly.
134
What are the five ethical principles?
Integrity, honesty, competence, fairness, and care.
135
What is integrity?
Always doing what’s right, even when no one is watching.
136
What is competence?
Having the skills and knowledge to do your job well.
137
What is fairness?
Treating everyone equally and without bias.
138
What is diligence?
Paying attention and doing your best work.
139
What is the role of leadership in ethics?
Leaders set the example for doing what’s right.
140
What is sustainable advice?
Advice that helps the client and society long-term.
141
What is inclusive advice?
Advice that works for people from all walks of life.
142
What is transparency?
Being open and honest with information.
143
What is accountability?
Taking responsibility for your actions.
144
What is whistleblowing protection?
Rules to keep people safe if they report wrongdoing.
145
What is professional development?
Learning new skills to stay good at your job.
146
What is Continuing Professional Development (CPD)?
Ongoing training to keep your knowledge up to date.
147
What is the CII?
Chartered Insurance Institute—sets exams and standards.
148
What is professionalism?
Acting with skill, care, and honesty in your work.
149
What is a vulnerable customer?
Someone who may need extra help to understand or decide.
150
What should you do if a client is vulnerable?
Be patient, clear, and make sure they understand everything.
151
What is a client mandate?
Permission a client gives you to act for them.
152
What is a discretionary service?
The adviser makes all decisions about investments.
153
What is an advisory service?
The adviser suggests ideas, but the client chooses.
154
What is an execution-only service?
The firm just carries out the client’s request—no advice given.
155
What is a fact-finding meeting?
A meeting to understand a client’s financial situation.
156
What is segmentation?
Grouping clients by needs or value.
157
What is client retention?
Keeping customers happy so they stay with you.
158
What is a needs-based approach?
Giving advice based on what the client truly needs.
159
What is churn?
Switching products too often just to earn more commission.
160
What is soft selling?
Gentle, helpful advice without pressure.
161
What is cross-selling?
Offering a client more products they may need.
162
What is up-selling?
Suggesting a more complete or expensive version of a product.
163
What is the Know Your Customer (KYC) rule?
You must understand the client’s situation before giving advice.
164
What is suitability letter?
A document explaining why the advice suits the client.
165
What is a key risk warning?
A note explaining what could go wrong with a product.
166
What is best execution?
Getting the best deal for the client when buying or selling.
167
What is time horizon?
How long the client wants to invest or save for.
168
What is the retail market?
Financial services for individuals, not companies.
169
What is a benchmark?
A standard used to compare investment performance.
170
What is a liquidity need?
How quickly a client might need access to their money.
171
What is leverage?
Using borrowed money to try to increase returns.
172
What is gearing?
Another word for borrowing to invest more.
173
What is asset allocation?
Choosing how much to invest in each type of asset (shares, cash, bonds, etc.).
174
What is rebalancing?
Adjusting investments to keep the original mix.
175
What is pound cost averaging?
Investing a fixed amount regularly to reduce risk over time.
176
What is volatility?
How much an investment’s value goes up and down.
177
What is an investment wrapper?
A structure like an ISA or pension that holds investments.
178
What is financial resilience?
How well someone can handle money shocks, like job loss.
179
What is inflation risk?
The risk that rising prices reduce your money’s value.
180
What is interest rate risk?
The chance of losing out if interest rates move.
181
What is market risk?
The risk of investments losing value due to market changes.
182
What is credit risk?
The chance someone won’t pay back what they owe.
183
What is liquidity risk?
The risk you can’t sell an asset quickly without a loss.
184
What is tax risk?
The chance a tax change could reduce your returns.
185
What is counterparty risk?
The risk that the other side of a deal defaults.
186
What is diversification benefit?
It lowers risk by mixing different investments.
187
What is correlation in investing?
How much two investments move in the same way.
188
What is beta?
A measure of how risky a share is compared to the market.
189
What is alpha?
Extra return made compared to the market.
190
What is a synthetic fund?
A fund using financial tricks (like derivatives) to match a market.
191
What is a passive fund?
A fund that just follows a market index.
192
What is an active fund?
A fund where a manager picks investments.
193
What is a structured product?
A product that offers fixed outcomes based on market conditions.
194
What is a guarantee in investing?
A promise you won’t lose more than a set amount.
195
What is a stress test?
A way to check what happens if things go badly.
196
What is financial literacy?
Knowing how money, saving, and borrowing works.
197
What is simplified advice?
Help with a small financial issue—not a full review.
198
What is guidance?
General information—not tailored advice.
199
What is personalised advice?
Advice that fits one person’s full situation.
200
What is execution-only risk?
Risk of making a bad choice when no advice is given.
201
What is stewardship in investing?
Looking after investments in a responsible way.
202
What is ESG investing?
Investing with care for the environment, society, and good governance.
203
What is greenwashing?
Pretending a product is more eco-friendly than it is.
204
What is a prospectus?
A legal document explaining a new investment offer.
205
What is insider information?
Private facts not yet known to the public that affect share prices.
206
What is front-running?
Breaking rules by trading before clients to profit.
207
What is churning?
Unfairly switching a client’s investments to earn more fees.
208
What is best interest duty?
Acting in a way that helps the client most.
209
What is outcome-based regulation?
Checking if the results for clients are fair—not just the process.
210
What is the FCA Principle of Integrity?
Be honest and do the right thing at all times.
211
What is the FCA Principle of Fair Treatment?
Treat customers fairly and respectfully.
212
What is the FCA Principle of Communication?
Give clear, fair, and not misleading information.
213
What is the FCA Principle of Financial Prudence?
Firms must be financially strong and well-managed.
214
What is the FCA Handbook?
A big rulebook with all FCA rules.
215
What is the Conduct of Business Sourcebook (COBS)?
FCA rules about treating customers properly.
216
What is the Training & Competence (T&C) regime?
Rules to make sure advisers are skilled and up to date.
217
What is the importance of record keeping?
To prove what advice was given and protect everyone involved.
218
What is personal accountability?
You are responsible for your own actions.
219
What is disciplinary action?
Punishment for breaking the rules.
220
What is a sanction?
A penalty for doing something wrong.
221
What is a fine?
A money penalty for breaking financial rules.
222
What is a ban?
Being stopped from doing financial work.
223
What is enforcement?
Making sure people follow the rules.
224
What is a regulator’s investigation?
Looking into whether someone broke the rules.
225
What is a firm’s governance?
How it’s run and checked at the top level.
226
What is oversight?
Keeping an eye on processes and staff.
227
What is accountability in a firm?
Knowing who is in charge of what.
228
What is corporate social responsibility (CSR)?
Companies acting in a good and ethical way.
229
What is sustainable finance?
Helping people invest in ways that help the planet.
230
What is stakeholder engagement?
Talking with everyone affected by your business.
231
What is the aim of regulation?
To protect consumers and keep trust in finance.
232
What is an effective complaint process?
A fair and easy way for clients to raise concerns.
233
What is transparency in charging?
Being clear about all costs and fees.
234
What is inducement?
A gift or benefit that may influence someone unfairly.
235
What is cooling-off cancellation?
Time to change your mind after buying a product.
236
What is customer-centric service?
Putting the customer’s needs first.
237
What is trust in financial advice?
Believing the adviser is honest and acts in your best interest.
238
What is informed consent?
Agreeing to something after fully understanding it.
239
What is long-term client value?
Helping clients grow and protect their money over time.
240
What is professionalism in communication?
Clear, respectful, and accurate messages.
241
What is ethical leadership?
Leading by example and doing the right thing.
242
What is the value of qualifications?
They prove your knowledge and boost trust.
243
What is good customer service?
Helping clients in a fast, friendly, and useful way.
244
What is a breach?
Breaking a rule or policy.
245
What is remediation?
Fixing a problem or mistake that hurt the client.
246
What is an exit strategy?
A plan to leave an investment or financial plan.
247
What is digital advice?
Using technology to offer financial guidance.
248
What is behavioural finance?
How people’s emotions affect money choices.
249
What is trustworthiness in finance?
Being honest and reliable in everything you do.
250
Why does ethics matter in financial advice?
Because clients depend on your honesty and care.
