HND Financial Services∶ Group Award Graded Unit 1第一篇.doc

1. Planning Action Plan 1.1 Likely resources to be used -P1 1.2 Strategy for carrying out report -P1 1.3 How the project will be managed -P3 1.4 Timescales for project -P3 1.5 Source of information -P42. Developing-Case Study Report 2.1 Key factors in case study -P 4 2.2 Likely financial needs of the clients 2.2.1. Saving -P 5 2.2.2. Mortgage needs -P 7 2.2.3 Protection needs -P 8 2.3 suggestions for improvements -P 10 2.4 Likely providers -P 10 2.5 Relevant products and services -P 11 2.6 Benefit-needs analysis -P 122.7 Comparison among providers -P 132.8 Effect on tax position -P 142.9 Justification for selections -P 173. Evaluation 3.1 Criteria for Evaluation -P 173.2 Changes made during project compared to original action plan -P 183.3 Effectiveness of process -P 19Introduction I am an Investment Services Manager with the Cadogan Back plc. In this report, I will assist busy, well-to-do clients by providing solutions to their saving, borrowing and person insurance needs .1.Planning1.1 Likely resources to be used Information was gathered from Egg Savings Account and First Direct Account, Legal & General Group, Association of British Insurers ,the textbook of Financial Service , a meeting and the Internet . 1.2 Strategy for carrying out report(1) Case study analysis: Above of all，I will analyze the case study given and find out the Mr. Alexander financial status, family members information, age and health, housing condition. In conclusion I must learn about business operation condition and business potential, etc. I will further figure out and summarize the Mr. Alexander needs in terms of financial services. (2)Relevant information collectionAccording to the Mr. Alexander need, seeks belongs suits their managing finances information， but I must know all about their situation. It mainly contains they family members information, age and health, housing condition. And business operation condition and business potential. (3)Information sort-out and selection Sort out the information which I had acquisition , For them to develop a comprehensive plan.(4)Drafting In 8 th May 2009 before , I will be the initial development of financial management program . (5) Inquired the clients opinion Then I development of financial management program, With the Mr. Alexander communication, understanding their comments and suggestions (6) Revising After the Case study analysis, relevant information collection, information sort-out and selection, drafting and inquired the clients opinion, I will discuss with my colleagues about the reliability of plans in order to better provide customers with the help. And revising again.(7)Final version To consider carefully and ponder, I think the way of managing finances will suit the customer the need. And a better life for their convenience.1.3 How the project will be managedAt the beginning, I will analyze the case study given and find out the Mr. Alexander financial status, Search for relevant information , Information sort-out and selection and Inquired the clients opinion , Revise and Final version.Secondly, I can Key factors in case study, know likely financial needs of the Mr. Alexander , suggestions for improvements and looking for a number of likely providers when relevant products and services . According to benefit-needs analysis to comparison among providers 1.4 Timescales for projectNo.StrategyTimescales (year of 2009)1Case study analysisMay 5th 2Relevant information collectionMay 6 th to May 7 th3Information sort-out and selectionMay 7 th to May 8 th4DraftingMay 9 th5Inquired the clients opinionMay 10th 6RevisingMay11 th to May12 th 7Final versionMay13 th 1.5 Source of information The information shown in this report was gathered from :The way of First Direct Managing finances October 2008 Textbook of Financial Service published by Scottish Qualification AuthorityA meeting with both the clients and the Financial Manager held on 10 th May 2009A part of information is comes the Internet ( .uk/index.htm /nara/cfr/waisidx_01/12cfr204_01.html/visitor/0,3_11060-View_819,00.html.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4015739/.uk.uk/Taxation/zh-CN-list.html.nav)2. Developing-Case Study Report 2.1 Key factors in case study (1) Financial Status : The annual income of Alexander is 42,ooo per , while the annual income of Janet is 55,000 per. They have two older children attend a local private school ,which charges 3,000 per child per annum is school fees . And another child is very younger . The couple intends to send she to the same school as soon as she is old enough. So, due to this is a lot of school fees, the Mr. Alexander must have saving . (2) Family members : This Family has five people . Alexander and Janet has three children , Adam , Sheila and Carina. (3) Age and health : Alexander , who is 48 years old and Janet is aged 44. The couple has three children , Adam , Sheila and Carina ,aged 14,10 and 3 respectively . Everyone is healthy.(4) Housing condition: The Mr. Alexader lives in a large six-bedroom bungalow in an expensive part of town ,which is conservatively estimated at a value of 1.25m . They have lived there for six years and have an outstanding mortgages of 45.,000 on the property The couple has recently want to build an extension to their home at a cost of 300,000.(5) Business operation condition and business potential：As a consequence of his previous redundancy , and due to the face that he was never felt secure over the long-term future of the company , he was always been ultra-cautions with his finances.2.2 Likely financial needs of the clients 2.2.1. Saving In times of crisis, providing emergency funds to be possible to help your pull through。(1) Act as an alternative to borrowing, saving may be set aside pay for larger and more expensive items . Such as a car, TV , a dream holiday etc.(2) Provide down a deposit for the purchase of a house.(3) Pay for private education for child .(4) Cover future cost e.g. childrens wedding , future or higher education cost , or help children set up their own home ,etc .(5) Set up a business or re-equip an existing one .(6) Ensure a good income in retirement2.2.2 Mortgage needsBecause of they lives bungalow have an outstanding mortgages of 45,000 on the property. So they need mortgages for the house .2.2.3 Protection needsTerm assurance policies has Life Insurance and Death insurance ,which are the most common and cheapest assurance contracts. It not only security, but also for the protection of life.With Profits Endowment Policies, Mortgage Protection Policies provide a basic sum assured and ensure a good income.2.3 suggestions for improvements In order to ensure the life by the financial crisis, they should have One to two years of term savings. I will suggestion they can handle Instant Access pay for large and more expenses . Childrens Bonus Bonds cover future cost e.g. future or higher education cost . And the house to repay the loan as soon as possible. At the same time, the home loan is the safeguard. The insurance is for own security concern. . 2.4 Likely providers The provider shown in this report was gathered from: First Direct Bank UK The Bank of Egg Building society account Legal & General Group Association of British Insurers UK Trade & Investment 2.5 Relevant products and services Savings Account (1) Instant Access Instant Access savings accounts vary considerably in terms of the interest rates they pay to savers and the additional features they provide . It pays the save to “shop around” for the best saving deals. Instant access saving account provide immediate access to saving without penalty .In general the interest rate paid by banks to savers will depend upon the balance of the saving held in the account .The approach used whereby banks pay higher interest for higher deposits is known astiered rates.Some providers still offer passbooks to show a record of the saving and these have to be handed over to the bank every tome a deposit or withdrawal is made.(2) Childrens Bonus Bonds When a new arrival comes to a family it is both common and understandable that the parents, and other close members of family, would wish to make some financial provision for its future . Childrens Bonus Bonds are Pay for a education for children ,Cover future costs e.g. childrens weddings, further or higher education costs, or help children set up their own homes Childrens Bonus Bonds reach maturity on the 21st birthday of the individual for whom the bonds were bought. Before this date, the bonds also accrue a bonus every five years, encouraging the child to hold onto the bonds for longer. If access to cash is needed, however, the bonds can be redeemed at any point during their term. Until the 16th birthday of the child the bonds are under the control of their parent or guardian, even if the bonds were bought by someone else. However, from the date of purchase the bonds are the legal property of the child, and after their 16th birthday their control passes to the owner. Childrens Bonus Bonds are sold in Issues Each issue has its own rate of return and savings limitNo interest is earned if the bond is the first year after purchase The Bond will earn interest at a fixed rate over five years(3) Fixed Interest Savings Certificates Fixed Interest Savings Certificates provide savers with a tax-free return and offer guaranteed interest rates over a fixer term Fixed Interest Savings Certificates are lump sum investments Exempt from UK Income tax and Capital Gains Tax The investor does not have to declare any interest or capital growth earnedThere two different savings terms * 2 year-term *5 year-term 2.5.2. Mortgage Traditionally lending has been categorized as:Short Term periods of up to 3 years Medium Term - periods of 3 years up to 10 years Long Term - periods of up over 10 years Mortgage types (1) Interest only repayment method(2) Capital and interest repayment method(3)Capital and interest mortgages A capital and interest repayment mortgage facility is one that requires the borrower to repay a part of the capital borrowed and an interest payment charged on that capital each time a payment is made . The mortgagor is the borrower who grants temporary ownership of his property to a lending institution for the period of a loan . The mortgagee is the lending institution that has granted the loan to purchase the property , or against the property ,for the agreed period and that now has a title to it.The parties to any mortgage are known as the mortgagor and mortgagee . If the borrower fails to repay the loan the security given to the lender may need to by sold to repay it . .Mortgages are long-term loans and for large sums of money2.5.3 Protection Insurance and Assurance Term Assurance Policies A proposer arranges to take out a term assurance contract with an assurer. If the life assured survives beyond the specified period of time no benefits accrue and the policy expires. Policies can be arranged in more than one name . The term of the policy is agree at the outside and can be arranged on a short term (days or months) or for several years or decades. First party death policies are most important where the surviving spouse would suffer financially or where there are children . Mortgage Protection PoliciesThere are the cheapest and simplest of the term policies that are currently available on the market Life assurance cover is arranged for the full original value of the agreed loan.The assured value reduces as the outstanding capital balance reduces.The risk to the insurer reduces over time and this is reflected in lower premiums that would be charged for a level term assurance.Premiums remain constant throughout the term. With Profits Endowment Policies With Profits Policies provide a number of benefits to mortgage borrowers. Policies are taken out for a fixed term that ends in the month of the last mortgage repayment. The insurer pays an annual bonus to the policyholder. They guarantee that the loan is repaid on the death of the borrower , or on the death of either borrower in a joint mortgage. Monthly premiums remain constant throughout the term of the loan. Once reversionary bonuses are added to the policy they cannot be removed.2.6 Benefit-needs analysis Comparison with the bank of First Direct and Egg about saving , mortgage and Iona , I will offer best financial plan to reduce tax payment . As a consequence of Mr. Alexander previous redundancy , and due to the fact that he has never felt secure over the long-term future of the company, he has always been ultra-cautious with his finances , But the Bank of First Direct company saving account can provide an emergency fund to deal with any unexpected financial difficulties and the interest rate is better. It can reduce the potential risk in Alexander Companys business. First ,savings accounts require funds to be kept on deposit for a minimum length of time, but most permit unlimited access to funds. Secondly ,Savings Account of Interest ratesis cheaper.Balance Aer(1)Gross(2)% p.a.Net(2)% p.a.100,000 and over0.05%0.05%0.04%50,000 - 99,9990.05%0.05%0.04%5,000 - 49,9990.05%0.05%0.04%250 - 4,9990.05%0.05%0.04%1 - 2490.05%0.05%0.04%Third ,Personal Loans - standard rates dependent on your individual circumstances.Loan amountstandard typical %APRLoans from 1,000 to 2,45015.9%Loans from 2,500 to 4,95013.9%Loans from 5,000 to 7,95011.9%Loans from 8,000 to 9,95010.9%Loans from 10,000 to 14,9509.9%Loans from 15,000 to 25,0008.9%2.7 Comparison among providersType of savings Name of the productsAdvantageDisadvantageSavings AccountEGG saving account 2.50% gross pa/AER variable Notice period for withdrawals100,000 will receive no interest on that portion of their money during the first 12 months. First Direct saving account save up to 3,600 tax-free this tax year no maximum limits on the amount pays 0.05% AER variable (0.05% gross p.a.). Fix interest saving Certificates AccountEGG saving accountEasy access 24 hours a day, every dayMin Investment-25First Direct saving accountstart saving from just 13.10% AERType of MortgagesName of the productsAdvantageDisadvantageCapital EGGs LoanFunds transferred directly to your bank account Repayment flexibility No early repayment charges EGG Loans - 8.1% APRFirst Direst s Loan 10.9% APR (typical)Delay your first repayment for up to 90 days Flexible repayment periods - 1 to 5 years Type of Protection Name of products AdvantageDisadvantageWith profits Endowment Polices Commenercial General Norwich UnionThe insure pay an annual bonus to the policyholder cashed after 10 yearsLegal and general GroupMonthly premiums remain constant the term of the loan A term bonus may paid at the end of the term.2.8 Effect on tax position （1） Income Tax An income tax is a tax levied on the financial income of people, corporations, or other legal entities. Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs).（2） SolutionThere are many ways to avoid paying tax on your savings, and fortunately, some of them are even legal. With a cash e-ISA, you can watch your cash grow tax-free while enjoying instant access to your money. Its so simple; you can complete your account application online and manage your account by phone, electronically through Internet Banking or by post.First Direct Bank UK (Internet) was merely reduce paying tax, it cannot avoid paying tax . Tax treatment depends on may be subject to change in the future and individual economic circumstances2.9Justification for selections I would choose :TypeSaving Instant Access Saving AccountChildrens Bonus Bonds Fixed Interest Saving CertificatesMortgageCapital and interest mortgage Protection Term Assurance PoliciesMortgage Protection PoliciesWith Profit Endowment PoliciesI stated my reasons are as follows: Each issue has its own rate of return and savings limit .It is a free-tax saving account Instant access saving account provide immediate access to saving without penalty3. Evaluation 3.1 Criteria for Evaluation This familys revenue was less than payment , clients faced a sharply issue ,this plan can help them to deal with some events. I will take ef