The Finance Industry
Policy number, Premium, Policy holders, Additional policy holders, exclusions and limitiations
Information found in an insurance agreement
<250 employess
SME
Keeps everyday functions on track. Focuses on maintaining the efficiency of the production process and helps teams make smart decisions.
Operations
War
Political instability in major trading nations
Climate change
Events that cause instability in global financial markets
There are some major exceptions to the accounting rules but, overall, financial statements are fairly presented.
Qualified Opinion
A group of people put all their money together to invest.
Pooled investments
Individuals that use financial services for personal use
Private / Personal
Gathers information from clients to assess their insurances needs and risks, researches policies and negotiates best policy terms with insurers
Insurance broker
Refers to the below-average credit score of the individual taking out the mortgage, indicating that they might be a credit risk
Sub prime
A change to regulation that keeps customers informed on their financial balance and any changes that happen to it.
Guidance on financial health warnings
+ Flexibility (income in lump sums)
+ Inheritance
+ 25% tax free
- No guarantee it will last
- Capital value / market volatility
Pros and cons of IncomeDrawdown (Pension Options)
Larger businesses seeking financial services as a source of finance
Corporate
Internal auditors keep track of bookkeeping making sure the business is recording finances correctly.
Interrelationship of Audit and Finance team
A sudden drop in asset prices
Run on the banks
Level of regulation of financial services insufficiently robust
Financial factors that may cause a financial crisis
Regulates the UK financial services industry, protects consumers and promotes healthy competition between financial service providers.
Financial Conduct Authority (FCA)
Enables companies, public sector organisations, governments and financial institutions to raise short term finance and long term capital to fund growth.
Wholesale Financial Markets
Banking – use of current account
Saving – e.g. using a savings account / ISA
Mortgages – so they can buy a residential property
Products / Services for a Personal client
provide expert impartial advice on financial planning including pensions and investment and wealth management; research investment opportunities; provides objectivity when investing funds on behalf of their clients; not linked to specific suppliers of financial services
Role of an Independent Financial Advisor
Set by a central bank
Targets inflations
Independent from the political process
Monetary Policy
The broker ensures the recommendation is suitable for the customer based on the customers investment profile
Practices to address mis-selling: Client Suitability
The stage of the corporate lifecycle where sales decrease slowly, profit margins get thinner and cash flow remains stagnant.
Phase four - Maturity
‘Market Maker’ – can influence the market with trades‘
Will have specialist roles that research the market and have access to more information
Institutional client
Operate in an advisory capacity with the final decisions being the responsibility of the client.
Limitations of an Independent Financial Advisor
Decrease in Unqualified Opinions
Increase in Disclaimer of Opinions
Less chance of audit switching
Impact of the 2008 crash on audit opinions
Published policy, designated officer, display screen equipment, employee training, risk assessments, regular fire drills
Business law: health and safety