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Flashcards in Serving The Retail Customer Deck (124)
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1

What is the client information you should obtain as an advisor

Basic client details, financial situation, investment objectives, risk profile, understanding and experience

2

When making recommendations what must you ensure

You know your client
Recommendations match risk profile
Recommendation is the most appropriate and you explain why
Provide the level of service committed to at the initial disclosure

3

What should all communication be

Clear, fair and not misleading

4

What should the characteristics of a suitability report be

Tailored
Specific to demands and needs
Explain reasons and disadvantages of recommendation
Highlight needs not covered by recommendation

5

What is the main priority for financial needs

Budgeting and managing debt

6

What is debt consolidation

Negotiates a new loan to pay off others often with lower interest rates, however charging fees can be high

7

What is the transfer of property in exchange for a mortgage called

The assignment

8

What are the two main types of mortgage

Interest only
Capital and interest repayment

9

What are the different interest rate options (9)

Capped
Cap and collar
Discount
Euro
Equity linked
Fixed interest
Flexible reserve
Offset

10

What are the 2 equity release schemes

Lifetime mortgage
Home reversion plans

11

What is a home reversion plan

Sell all or part of a home for cash lump sum, regular income or both and continue living in the home

12

What is a lifetime mortgage

Mortgage until you die. At which point in a roll up contract interest is repaid when house is sold or a fixed repay,net when you don't pay interest but pay a fixed higher charge or finally a home income plan where the money you borrow buys a regular income for life

13

What are home purchase plans

Help to buy a home without paying interest

14

What are the 2 types of home purchase plan

Ijara and diminishing musharaka

15

What is the other name for sale and rent back

Mortgage rescue

16

What is the purpose of sale and rent back schemes

Allows the clearance of the mortgage but you can stay in your home

17

What are the risks of sake and rent back

You may have to leave when term ends
You could be evicted if breach the tenancy agreement
The property could be repossessed if the buyer falls into financial difficulty

18

What are the 2 types of loan

Unstructured and structured

19

What is an unstructured loan

You can repay the loan at any time without penalty

20

What is a structured loan

Fixed rate interest, high costs and penalty for repaying the loan early

21

What top priority protection products for most

Life insurance, health cover and pension provision

22

How can death benefit easily be calculated

10x salary

23

What is the most commonly used policy to account for INT

Whole of life policy written on a last survivor basis in trust

24

What are the three stages of the financial life cycle

The vulnerable years
The relaxed years
The anxious years

25

What are the vulnerable years in the lifecycle

Early years of family and marriage where there are high protection needs and relatively low incomes

26

What are the relaxed years of the life cycle

In the 40s when dependent are becoming financially independent and disposable income increases

27

What are the anxious years in the life cycle

50+ when earning power peaks, mortgage is paid off but more likely to become ill with little time to make up any pensions shortfall, cost of cover increases and IHT becomes a consideration

28

What are the 3 main types of life insurance

WOL
Term assurance
Endowments

29

What is term assurance

Lump sum on death if die during set term.. Can be level, increasing or decreasing, family benefit which pays an annual amount for remainder of term, convertible to wol and renewable

30

What is an endowment policy

Primarily savings vehicle which also pays lump sum on death (although not much as most incest net directed to investment). Option to add CI