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RO1 Flashcards

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

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

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

A

Purchased from other capital, or tax fee cash.

Separated into an income and capital statement.

22
Q

FCA- Operational objectives

A

Set up by FSMA act 2000.

Protecting consumers

Protecting financial markets

Promoting competition

23
Q

FCAs overarching strategic objective…

A

Ensure that the relevant markets function well

24
Q

Prudential Regulation Authority- PRA

A

Banks, building societies, credit, insurers, investing.

‘Promoting safety and soundness of the firms it regulates’

25
Q

PRA approach to regulation and supervision

A

Judgement based

Forward looking

Focused

Maintain a stable financial system

26
Q

FCA level of supervision

A

Risk Category C1-
Large banking and insurance groups with very large # of retail clients.

C4- Smaller firms including most intermediaries.

27
Q

FCA three pillar supervision model

A

Proactive firm/group supervision.

Event-driven, reactive supervision.

Thematic approach- issues + products supervision.

28
Q

FCA Compliance monitoring

A

Procedure= reports, time limits, information from authorised firms -> take action.

Business, personnel and customer matters.

29
Q

Sale + Rent back

A

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
Q

Buy to let mortgages

A

Long term investment

Commercial buy to lets not negotiated by FCA

31
Q

Loan Types

A

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
Q

Data controllers charge

A

£10- max - subject access

Up to £50 for Health and education records

33
Q

Complaints

A

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
Q

OM Budsman can claim:

A

£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
Q

Pensions ombudsman (TPO)

A

Problems with pension plans and small occupational schemes

Free (funded by DWP)

Has legal procedures

36
Q

The pension advisory service (TPAS)

A

Evidence on pens, specialist and volunteer.

Free advice.

37
Q

The pension protection fund (PPF)

A

Compensation for those with DB pens.

Fraud fond.

Funded by annual levies

38
Q

Principles and practices of financial management (PPFM)

A

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
Q

Best execution

A

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
Q

P.I.P.S.I

A

Protection

Income protection

Pension

Savings and investments

Investments

41
Q

Outcomes

A

Based ONT regulation

Intensive supervision

Making judgement on what might happen in future

42
Q

Principles based regulation- PBR

A

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
Q

Portfolio Management

A

UK stock market

Big amounts

44
Q

Discretionary service

A

Taking relevant decisions to meet objectivise of investor.

45
Q

Differences between advisory and discretionary.

A

Advisory- Suggestions re invest only

Discretionary- Actions only

RO1 (4 decks)

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