LiBF Unit 2

1.1 Outline the need for financial planning. - Answer- Make better financial decisions Avoid unnecessary debt Help make decisions on savings, spending and progress in reaching goals Helps show what you have to do to get to where you want to be 1.2 Explain the personal factors which influence financial planning. - Answer- Factors influenced by stage in life cycle Attitude to risk Attitude to Risk - Answer- a. Risk tolerance - how does the individual feel about the possibility of losing money? b. Capacity for loss - how much money can the individual afford to lose? Stages in life cycle - Answer- Childhood 0-12 Teenage 13-19 Young Adult 18-25 Mature Adult 26-40 Middle Age 41-54 Late Middle Age 55-65 Old Age 65+ Each of the stages has its own typical opportunities, challenges and needs. 1.3 Identify sources of financial planning information and advice. - Answer- Advisory services (CAB, Money Advice Service, charities, financial advisers) Financial service providers (banks, building societies, credit unions) Citizens Advice Bureau - Answer- Citizens Advice provides free, confidential and independent advice to help people make the right choices, including help to deal with debt problems, how to avoid losing their home and how to get their finances back into shape. Money Advice Service - Answer- Free and impartial money advice, set up by government. Offers advice and guides to help improve finances. Tools and calculators to help keep track and plan ahead. Support over the phone and online The Money Charity - Answer- empower people across the UK to build the skills, knowledge, attitudes and behaviours, to make the most of their money throughout their lives Financial Advisers - Answer- Independent financial advisers (IFAs) must recommend products and solutions from the whole of the market Restricted advisers can offer products from one company or a lim