Unit 1 Topic 7 Flashcards
(41 cards)
Who is the Chancellor of the Exchequer?
The British Cabinet minister responsible for financial and economic matters and in charge of the Treasury.
What is a common bond?
An interest or circumstance shared by a group of people, for example working for the same employer or living in a certain area.
What is a communication channel?
Refers to the way a customer can contact their provider and manage their account. Also referred to as a distribution channel.
Explain what demutualisation is
The process whereby a mutual organisation (eg building society) legally becomes a shareholder-owned join stock company. (eg a bank)
What is a dividend?
A payment of profits from a company to its shareholders, often at twice-yearly intervals, either as cash or (depending on the plan) as further shares or reacquisition of shares.
Who are the FCA?
Financial Conduct Authority
One of the two main regulators of financial services in the UK.
What is insurance?
Products that give financial protection against certain events. For example, someone who has travel insurance might be able to claim back the cost of a holiday if they have to cancel through illness.
What is the interest rate margin?
The difference between the interest rate that a bank charges on borrowing products and the interest rate that it pays on savings.
What is life assurance?
A type of insurance policy that pays out a sum of money if the insured person dies.
What is a premium bond?
A lottery bond, issued by NS&I, entered into a monthly prize draw with tax-free prizes or ‘premiums’. Bonds must be held for a full calendar month after the month in which they were purchased, and retain an equal chance of winning until cashed in.
Who are the PRA?
Prudential Regulation Authority
One of the two main regulators of financial services in the UK.
What is a PLC?
Public Limited Company
A large company whose shares are sold and traded to the general public. The shareholders have limited liability, up to the value of their investment, for the company’s debts.
What are savings bonds?
Savings products held for a fixed period, eg two years. The holder can only make a limited number of withdrawals, or none at all, during that period without incurring a penalty.
What is travel insurance?
A product providing coverage for unexpected events such as trip cancellation, medical expenses, travel delays and other losses incurred while travelling.
What is the Treasury?
Her Majesty’s (HM) Treasury, the government department responsible for development and implementation of financial and economic policy.
Name 5 main providers
Banks
Post offices
Building societies
Credit unions
NS&I
Name 3 factors to consider when people choose a financial services provider
The advantages and disadvantages
How they wish to operate their account + communicate with their provider
How safe their funds will be
Name 5 communication methods
Branches
Online Banking
Telephone
Mobile
Post
Name 2 advantages of Branches
Offers a personal service as it’s face-to-face communication
The branch can advertise all of its products
Name 2 disadvantages of Branches
Sometimes inconvenient
Expensive to run
Name 2 advantages of online banking
24/7 access
immediate transactions
low cost
Name 2 disadvantages of online banking
security issues
lack of personal contact to ask questions
Name 2 advantages of telephone communication
can contact bank from wherever
call centre has longer opening hours than branches
call centres are less expensive
Name a disadvantage of telephone communication
Risk of potential fraud
