Life, Pensions and Investment Companies
Life and pensions is the historic term for the part of the financial services sector that aims to support life and health, and through investments aims to ensure people have financial security in retirement.
The main business involves:
- Life assurance policies [life cover] - these provide a lump sum of money, or a monthly income in the event of the policy-holders death before an agreed date. The funds of the policy will go to the policyholder's beneficiaries - usually the policyholder's family, or can be used to pay off certain large debts, such as a mortgage.
- Income protection policies - these can be taken out to ensure an income is maintained in the event of a policy-holder being unable to work due to long term illness, injury or disability.
- Pensions - investment to provide financial security in later life. This is now one of the most important areas of the sector, drawing significant media coverage and political attention thanks to demographic trends.
- Investments - as well as being the means by which funds are built up to pay out against the promises made in policies or pension schemes, investments are also an important way of saving for significant future payments - from properties to private education, or simply to make the most of spare funds for the future. Whatever the reasons, there are factors to consider such as the length of time available to build up the pot of money, what sort of risks can affect how that money grows, or even how we feel about taking risks with that money.
Predicting how much money someone might need or want in the future is a tricky business and making sure that that amount is reached even trickier. Understanding the risks involved and the needs of clients means that this can be a very challenging part of financial services but ultimately very rewarding, knowing that you are part of preparing someone's future and helping them reach their goals.
Financial advisers, who are concerned with life and related insurances as well as other forms of retail investment product, are required to hold, as a minimum, the Certificate in Financial Planning, a qualification run by the Chartered Insurance Institute (CII). There are three different kinds:
- Independent financial advisers who can choose from all available products to select the one that will best suit an individual's needs.
- Multi-tied advisers who can only sell products from a limited number of companies - the ones to which they are "tied". They still have to find the best product in their range to suit you.
- Tied advisers who only sell products from the one financial company to which they are "tied" - usually their employer. They will choose from the limited range of products available but will still try to find the best one in their range for you.
Because this is such a crucial part of everyday life now and for the future, the Financial Services Authority [FSA] - an independent body, regulates the activities of the companies, banks and financial advisers operating in this sector in the UK.
** Source: Association of British Insurers site - 'Introducing Insurance'
Chartered Insurance Institute (CII)
42-48 High Road, South Woodford, London E18 2JP
Tel: 020 8989 8464
www.cii.co.uk
The Personal Finance Society
20 Aldermanbury,London, EC2V 7HY
Tel: 020 8530 0852
www.thepfs.org
The Pensions Management Institute
PMI House
4/10 Artillery Lane
London
E1 7LS
Tel: 020 7247 1452
www.pensions-pmi.org.uk
The Association of Independent Financial Advisors
Austin Friars House
2-6 Austin Friars
London EC2N 2HD
Tel: 020 7628 1287
www.aifa.net
Financial Services Skills Council
51 Gresham Street
London EC2V 7HQ
Tel 020 7216 7366
Email info@fssc.org.uk
Web www.fssc.org.uk
Financial Services Authority (FSA)
www.fsa.gov.uk
Association of British Insurers
51 Gresham Street
London EC2V 7HQ
Tel: 020 7600 3333
e-mail: info@abi.org.uk
www.abi.org.uk
