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Mr Carter has requested that I research the financial needs of potential and current Canada Life customers based on their stage in life. I have been given seven generic stages life stages.

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Financial Services for Individuals Unit 2 I have been recruited as a Financial Advisor at Canada Life as a School leaver trainee. I will be placed on a comprehensive training campaign but before this begins my new boss, Mr Carter, wishes to ascertain my current financial acumen. Task 1 Mr Carter has requested that I research the financial needs of potential and current Canada Life customers based on their stage in life. I have been given seven generic stages life stages. Table 1 Financial Needs Appetite to Risk School age/ youth (-16) People at this life stage have limited needs. A Savings account would be enough, since they do not have much money to invest or spend. A cash card would do this. Their money may come from a paper-round job. Also, they may have savings from grandparents etc. This can then be used in a premium bond or a national saving bond. Most financial institutions are unavailable to people in this age group as they cannot be held accountable for any contract by law since they are under 18, so financial institutions may be unwilling to give credit to people in this age group as they is a high risk of them not paying back their money. There is a low risk because they are not yet mature enough to think of saving for the future, and since they have limited needs, they would not want to risk the little income they have. Teenagers and students (17-22) Slightly more diverse than the -16 category. They might be earning money and have a current account; this would enable them to have overdrafts and credit cards as they have expenses, such as telephone bills, which need to be paid on a regular basis. Savings account, Direct debits, which would enable them to automatically pay their bills. They might borrow money i.e. a student loan for university or for living expenses. ...read more.


This would appeal to young families, as they would know that their children would be financially secure if they were to die as the full sum is paid upon death. Established and mature households would consider getting this as it could be used to pay off a mortgage when the policy matures. This would guarantee a debt-free retirement. Mature households would also consider this option as it would provide a lump sum when they retire, and with it financial independence during their retirement years. Unit linked endowments A Unit Linked Endowment Policy is more appealing to investors and offers a wide range of different fund options. The policy premiums are invested in "units". There is no bonus allocation or guaranteed sum and the investment growth depends on the performance of the fund. As the unit price will change according to the fund performance, so will the value of the endowment policy. This would appeal to young families as they provide life assurance, meaning that in the event of death, a lump sum is paid. This would ensure the financial security for their children. There is also the possibility for making a profit if the fund invests in the correct shares. Established families would also favour because while it is higher risk than non-profit endowments, it has the possibility of earning the policy holder tax-free returns. National Savings Products The range of products is accessible directly from National Savings and Investments, from Post Offices or through Financial Advisers. National Savings Products are of a low risk nature, some of which are tax-free. It will be suitable for people under the age of 16 because it is risk-free and they would not want to risk their little income they have on a high-risk scheme. Pensioners may also be suited by this because they will not invest their money in a high risk scheme such as shares because they may save their retirement money for their grandchildren etc. ...read more.


Has a floating rate mortgage of �150,000. Property value of �280,000. Wife does not work. He has no life assurance. Has savings in a low interest account of �5,000. �5,000 in premium bonds but rarely wins. A credit card debt of �1,000. Has no pension provision. Dirk van Locke 43 Head of Currency Trading at CSFB. Divorced with two children. One child is 19 and just started university The other child goes to private school and is in year 9. Lives in rented accommodation in Chelsea. Wants to retire in 3 or 4 years time and live in Spain. Extremely busy individual and although he works in finance claims he does not have time to arrange own affairs. Does not own a property. Earns a basic of �120,000 per annum and a discretionary bonus. Recent divorce was hugely expensive; he gave his house and half his savings to his wife. His savings now amount to �750,000; half is invested in shares, which are showing a 10% paper loss the other half are in accounts which are not tax efficient nor offer a high interest account. He lives a lavish life style and does not put any money aside each month. Customer Name Age Personal Characteristics Financial Characteristics Mr and Mrs Ali 58 & 54 Mr Ali works as a Teacher in a local comprehensive school. Mrs Ali works part time as a learning assistant in the same school. Both are looking to retire at 62. Has a property with small mortgage. Mr Ali earns �35,000 per annum. Mrs Ali earns �6,000 per annum. Mr Ali has a final salary pension scheme through his work. Mrs Ali does not have a pension plan and will rely on the state pension. They have combined savings of �20,000. Has a repayment mortgage of �30,000 and a property value of �120,000. Chris Outen 67 Retired painter and decorator. Is partially sighted. Lives in council accommodation. Has savings of �30,000. Wants to leave the majority of this to his three grand children. ?? ?? ?? ?? Md. Shelim Chowdhury Academy of Finance Page 2 ...read more.

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