Topic 14 - Understanding and satisfying customer Flashcards
(16 cards)
What suitable products should be recommended to:
School-age young people.
(Somewhere to save their pocket money and gifts from relatives)
Building society accounts.
CTF account
Junior ISA
Friendly society bond
What suitable products should be recommended to:
Teenagers and students.
(Somewhere to put their earnings from a part-time job. Borrowing to buy a car. Borrowing to fund education)
Bank current account
Personal loan
Student loan
Overdraft facility
What suitable products should be recommended to:
Post-education young people.
(Savings for a deposit for a house. Protection against loss of income due to illness. Loan to buy a house)
Building society account
IPI
Mortgage
Building society account
IPI
Mortgage
IPI
Life assurance
Bigger mortgage
Pension (with employer or via personal provision)
What suitable products should be recommended to:
Established families.
(Planning for retirement. Protection against loss of income, bigger mortgage and pension commitments. Life cover protection (for children still at home). Savings/investments over long term for surplus income and/or inheritances).
Increased pension contributions.
IPI
Life assurance
Savings and investment products (unit trust, bonds, etc)
Tax planning (IHT)
What suitable products should be recommended to:
Mature households.
(Planning for retirement. Savings and investments over the medium term to be accessible at retirement)
Increased pension contributions
Savings
Investment products (unit trust, bonds, etc)
Tax planning (IHT)
What suitable products should be recommended to:
Retirement.
(Creating as much income as possible from pension plans and savings policies. Realising capital from property. Possible long-term care needs)
Annuities
Investment that provide income
Equity release
Long-term care annuities
What is a common Savings pattern?
Cash
Current account
Instant access/short-notice deposit account
Fixed-term bonds
Equity-based investments eg unit trusts
What is a Fact find?
To ensure that any advice offered is suitable for the client, it is necessary to ask the following questions:
financial situation
existing and future needs
ability to provide for them
attitude towards providing for them
objectives
knowledge and experience of investment
What basic information is needed?
Full name, address, telephone number.
Date and place of birth
Marital status
Family details
What client Financial information is required?
Employment status
Income and benefits
Previous and/or additional employment
Income and expenditure
What does the FCA describe as a vulnerable customer?
Someone who is especially susceptible to detriment as a result of their personal circumstances, particularly when a firm is not providing appropriate levels of care.
What are the Five areas of financial need?
1) Protecting dependents from the financial effects of either a loss of income or a need to meet extra outgoings in the event of premature death
2) Protecting self and dependents from the financial effects of losing the ability to earn income in the long term.
3) Providing an income in retirement, sufficient to maintain a reasonable standard of living.
4) Wanting to increase and/or protect the value of money saved or invested; wanting to increase income from existing savings or investments; wanting to build up some savings in the first place.
5) Saving tax
What should be explained to the client when making a specific recommendation?
The purpose of the product and the client’s needs that the product will address
The benefits that the client will enjoy
The risks and limitations inherent in the product
Any options that exist within the product that may be appropriate to the client
A summary of reasons why the product is being recommended.
What is Proactive servicing?
Proactive servicing involves instigating action by contacting the client to discuss further needs.
What is Reactive servicing?
Reactive servicing happens as the result of a request from the client, for example a request to discuss the recommendation after comments made in the media or by competitors.
