1. Understand who is who in the financial world
Topic 2
Understand who is who in the financial world

2. Financial Intermediaries: are
Banks
Building societies
Credit Unions
Insurance Companies

3. What is a bank The services they offer are:
Current accounts – Savings accounts
Investments for larger sums
Loans
Credit cards
Overdrafts
Mortgages
Life assurance
Pensions (long term – saving for retirement
General insurance – house, car, medical
Foreign currency
Share dealing – business advice

4. Who owns banks in the UK The are Plc’s Public Limited Companies
Owed by shareholders
They charge more interest for borrowing
They have fees and charges for their services

5. What are building societies
They do not have shareholders
They are owned by the people who use them – ‘their members’
Their profits are used to benefit their customers/ members
There interest rates are competitive
They make money through charging interest to their borrowers and charging fees for services they provide

6. Number of Banks and B.Societies
51 Building Societies (regional)

7. Insurance Companies – they offer:
Life assurance
General assurance
Some offer both

8. They also offer: Pensions Investments Long term-sickness insurance
Endowments
Whole-of-life policies
They are owned by shareholders and the shares can be bought and sold on the stock exchange – some are owned by banks and offered in their branches

9. Mutual insurance companies
They do not have shareholders
They run for the benefit of their policy holders

10. Credit Unions They are financial co-operatives
Controlled by their members
They offer savings and loans
They are local
Ethical
They know what their members want
Members can take an active part in managing them
There is a common bond, where they live, work worship

11. How do Credit Unions work?
Members pool their money together
Rates of interest are not very high
Non-profit making
Rates of interest restricted by law

12. Providers that are not mainly financial providers
Supermarkets
Retailers i.e. Marks and Spencer – Debenhams
Online retailers – Amazon
Motoring organisations - AA and the RAC

13. FSA – Financial Services Authority
Oversees the behaviour of the whole of the financial services industry
It is there to ensure customers get a fair deal and that their money is safe
They are ‘regulators’ to the financial industry – they can take action against disreputable firms
They have 4 objectives:
To protect consumers
To help consumers to understand the financial system
To maintain confidence in the market
To fight financial crime

14. The FSA has regulations
They regulate firms and 165,000 individuals
They reduce financial scams and crime i.e. money laundering

15. Financial providers have to give their customers:
The correct advice
They have to send the customer regular statements on how their investments are progressing
They have to inform the client on their qualifications and commission received

16. Ethics Some banks will not lend to companies that run: Sweat shops
Employ children in the 3rd world to make products
Arms dealers
The Co-op is and ethical bank