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RO1 Flashcards

(45 cards)

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1
Q

Who are the UK financial authorities?

A

HM treasury

Bank of England

Financial policy committee (FPC)

Prudential Regulation Authority (PRA)

Financial conduct authority (FCA)

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2
Q

Friendly society

A

No shareholder will take profits repayable to members.

Investors had complete exemption from taxation.

Tax efficient savings.

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3
Q

Trust

A

Arranging property to be for the benefit of other persons without giving them full control of it.

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4
Q

Settlor

A

Gives away assets.

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5
Q

Beneficiary

A

Benefits.

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6
Q

Trustee

A

Controls asset in interest of beneficiaries

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7
Q

Trustees possess…

A

Legal ownership.

Once created trustee become legal owners.

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8
Q

Financial action task force (FATF)

A

To set international standards against money laundering and terrorist financing.

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9
Q

Will

A

Leave to whom ever they wish

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10
Q

Law of succession.

A

Beneficiaries succeed to property on someone’s death

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11
Q

Intestacy

A

Do not make will.

Spouse/Partner/No kids- Spouse sole benefit

Spouse/civil partner/kids- spouse/ chattels.

£250 k statutory legacy= 1/2 of the rest.

No partner- kids

No relative- crown (government)

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12
Q

Executors

A

Distribute assets aka personal representatives

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13
Q

Valid will

A

Writing (print + writing)

Signature

Attestation (witnessed by 2 or more)

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14
Q

Revocation of will

A

Full = marriage

Part = divorce

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15
Q

Cat standards

A

(Government approved products)

Charges access terms

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16
Q

The level of uk base interest rate

A

Main tool used to influence economic activity by the Bank of England

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17
Q

Who to speak to RE: Debt

A

Citizens advice bureau

National debt line

Pay plan

Step change debt charity

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18
Q

Capital and interest payment mortgage

A

Repayments to lender include a sum go repay capital plus a sum for interest

Payments can rise or fall in line with interest rates

Loan is gradually repaid and interest payable reduced

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19
Q

Interest only mortgage

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A

Lower monthly cost but higher overall borrowing

Only interest is paid and outstanding capital remains the same.

Idea is to pay at the end of the term
(Pension, investments, sale, ISA)

20
Q

Compulsory purchase annuity- CPA

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A

Bought from the proceeds of a pension.

Takes as earned income on whole of income paid @ 20%, 40% and 45%

21
Q

Purchased life Annuity- PLA

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A

Purchased from other capital, or tax fee cash.

Separated into an income and capital statement.

22
Q

FCA- Operational objectives

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A

Set up by FSMA act 2000.

Protecting consumers

Protecting financial markets

Promoting competition

23
Q

FCAs overarching strategic objective…

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A

Ensure that the relevant markets function well

24
Q

Prudential Regulation Authority- PRA

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A

Banks, building societies, credit, insurers, investing.

‘Promoting safety and soundness of the firms it regulates’

25
PRA approach to regulation and supervision
Judgement based Forward looking Focused Maintain a stable financial system
26
FCA level of supervision
Risk Category C1- Large banking and insurance groups with very large # of retail clients. C4- Smaller firms including most intermediaries.
27
FCA three pillar supervision model
Proactive firm/group supervision. Event-driven, reactive supervision. Thematic approach- issues + products supervision.
28
FCA Compliance monitoring
Procedure= reports, time limits, information from authorised firms -> take action. Business, personnel and customer matters.
29
Sale + Rent back
No cold calls or promotions. Sell home at discount and agree to stay Fixed for 5 years Must be an adviser sale Check client checked ongoing entitlement to benefits Cooling off period 14 days Independent valuation Provide additional information Not to be called fast sale/ mortgage rescue + quick cash.
30
Buy to let mortgages
Long term investment | Commercial buy to lets not negotiated by FCA
31
Loan Types
Unstructured- (commercial) possible to increase Loan repayments, reducing capital and interest. Can be repaid anytime. Structured- (smaller purchase) eg car. Fixed rate of interest payable over term of the loan Higher risk + cost = penalty for early redemption. Increased interest, unsecured loan.
32
Data controllers charge
£10- max - subject access Up to £50 for Health and education records
33
Complaints
Eligible complains- consumer, charity, trust, enterprise. Must investigate competently, diligently and impartially. Assess fairly, consistently and promptly the subject matter If it’s another company refer within 5 days of days of complaints and inform complainant. Include other forms of contact details. Send prompt written/acknowledged then keep informed of progress. Final response in 8 weeks Can refer to FOS within 6 months. If it is upheld offer remedied action/ compensation
34
OM Budsman can claim:
£150,000, complaint cost, interest Cannot award respondent costs against complainant but can charge complainant it’s own costs if conduct improper or unreasonable
35
Pensions ombudsman (TPO)
Problems with pension plans and small occupational schemes Free (funded by DWP) Has legal procedures
36
The pension advisory service (TPAS)
Evidence on pens, specialist and volunteer. Free advice.
37
The pension protection fund (PPF)
Compensation for those with DB pens. Fraud fond. Funded by annual levies
38
Principles and practices of financial management (PPFM)
With profits Must send a consumer friendly PPFM to all existing clients with annual statements and existing where a change and new policy holders.
39
Best execution
Stocks and shares. Does NOT apply to life or pension contracts or collective investments. A stock broker will obtain highest price for a selling client and lowest price for buying.
40
P.I.P.S.I
Protection Income protection Pension Savings and investments Investments
41
Outcomes
Based ONT regulation Intensive supervision Making judgement on what might happen in future
42
Principles based regulation- PBR
Neither possible or desirable to write a rule to cover every specific situation. Over-riding approach ‘A firm must conduct its business with due skill, care and diligence.’
43
Portfolio Management
UK stock market Big amounts
44
Discretionary service
Taking relevant decisions to meet objectivise of investor.
45
Differences between advisory and discretionary.
Advisory- Suggestions re invest only Discretionary- Actions only

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