INSU07026 2022 QFA Investment - Theory

Identify the functions of and key participants in the financial services market, and appraise the main financial services provided to consumers.

Appraise the main features of, and the main factors affecting, the economy.

Evaluate savings and investment products, including life assurance investment policies, collective investment funds, tracker bonds, Exchange Traded Funds, derivatives and unquoted transferable shares.

Appraise the main investment asset classes, including shares, bonds and deposits.

Assess the savings and investment product needs of consumers.

Evaluate personal taxation liabilities, including the taxation treatment of savings and investment products; and

Calculate sums accumulated or discounted at compound interest and the impact of inflation overtime on a consumer’s financial needs and resources.

This module is delivered with a blend of self-directed study supplemented by e-learning resources such as pre-recorded webinars and revision masterclasses. The teaching and learning modes will include:

Textbook

The Textbook is revised on an annual basis to reflect changes in legislation and regulation.  It is equivalent to the lecture notes students would receive in formal education institutions.

Revision Masterclass

Online lectures utilise lecture notes with extra reading material.  In these sessions real time practical examples will be used.  These classes provide the opportunity for the lecturer to maximise the use of formative assessment which helps the lecturer identify areas which the students are having difficulty with, so that adjustments can be made to the lecturing techniques, content of lessons and academic support.

In class discussion

Based on the theories/concepts underpinning business, in class discussion will be used to establish the level of understanding of the retail financial products.  Students will be encouraged to identify the application within their own place of employment and from the general business environment.

Self-Directed Questions

Self-Directed Questions will be used to determine their ability to review, fact-find and make recommendations while applying the knowledge they have acquired from the course textbook. 

Individual Work

Working as an individual will allow for the further development of self-discipline and enquiry.  

Personal Reflection

The personal reflection allows the student to look back over the learning experiences and identify areas for improvement and areas that worked well.

The assessment strategy for QFA Investment is by way of a two-hour 100 multiple-choice question (MCQ) summative examination.

The repeat assessment will be 100% final examination.

Financial Services

• Functions
• Key Participants
• Main Financial Services Provided
• Capital Markets
• The Irish Stock Exchange (ISE)

The Economy

• Instruments of Economic Policy
• Economic Growth
• Inflation and Deflation
• Unemployment
• International Trade
• Economic and Monetary Union
• The European System of Central Banks (ESCB)

Investment Asset

• Main Investment Asset Classes
• Historical Returns
• Alternative Asset Classes
• Volatility of Investment Returns
• Correlation of Returns
• Optimising Investment Returns
• Diversification
• The Yield Gap
• Equity Risk Premium

Deposits

• Introduction
• Deposit Account Features
• Benefits of Deposits
• Limitations of Deposits
• Risks in Holding Funds on Deposits
• Taxation of Deposit Interest
• Features of State Savings Schemes
• Comparing Deposit Accounts
• Deposit Intermediaries
• Regulation
• Deposit Takers Reporting Obligations to Revenue
• Deposit Guarantee Scheme (DGS)

Shares

• A Company
• Types of Companies
• Company Formation
• Company Accounts
• Shares
• Types of Shares - Features
• Benefits of Investing in Shares
• Limitations on Investing in Shares
• Types of Shares - Features
• Benefits of Investing in Shares
• Limitations on Investing in Shares
• Factors Affecting Quoted Share Prices
• Risks of Investing in Shares
• Taxation of Returns from Shares
• Assessing Share Values
• Buying and Selling Quoted Shares – Changing Ownership
• Stock Market Indices
• MiFID Investment Firm Services
• Derivatives
• Employment and Investment Incentive Scheme (EII)

Bonds

• What is a Bond?
• Types of Bonds (Treasury Bonds, Corporate Bonds)
• Features
• Returns on Bonds: Calculating Bond Yields
• Benefits of Investing in Bonds
• Limitations on Investing in Bonds
• Risks of Investing in Bonds
• Taxation of Returns
• Pricing: Clean/Dirty Price
• What Factors Affect Returns Offered by Bonds?
• Buying and Selling Bonds

Collective Investment Funds     

• What is a Collective Investment Fund?
• Features
• Advantages of Investing in Collective Investment Funds
• Disadvantages of Investing in Collective Investment Funds
• Limitations on Investing in Collective Investment Funds
• Risks of Investing in Collective Investment Funds
• UCITS
• Investment
• UCITS Regulation
• Alternative Investment Funds (AIFs)
• Exchange Traded Funds (ETFs)
• Collective Investment Fund Charges
• Taxation of Returns

Employee Share Incentives        

• Introduction
• SAYE Schemes
• Approved Profit Sharing Schemes (APSS)
• Key Employee Engagement Programme (KEEP)
• Restricted Share Schemes

Tracker Bonds & Structured Retail Products      

• Introduction
• Life Assurance Tracker Bonds
• Deposit Tracker Bonds
• Benefits of Investing in a Tracker Bond
• Limitations on Investing in a Tracker Bond            
• Risks of Investing in a Tracker Bond         
• Taxation of Returns        
• Governance/Regulation: Consumer Protection Code        
• Structured Retail Products           

Unit Linked Policies

• Unit Linked Savings Plans
• Unit Linked Bonds
• Benefits of Unit Linked Bonds
• Disadvantages of Unit Linked Bonds
• Limitations of Unit Linked Bonds
• Risks of Unit Linked Bonds
• Taxation of Returns
• Premium Stamp Duty
• Policy Ownership
• Reporting Benefit Payments to Revenue

Taxation

• Income Tax
• Capital Gains Tax
• Corporation Tax
• Partnerships Tax Treatment

Financial Maths             

• Understanding the ‘Time Value of Money’
• Inflation and Deflation
• Compound Interest
• Reduction in Yield (RIY)
• AER

Consumer Protection Code Obligations

• Advertising
• Obligations on Product Producers

Comparing Investment Products            

• Options
• Comparison Factors
• Comparing Investment Products – Summary

Providing Investment Advice

• Personal Financial Needs
• The Financial Planning Advisor Process
• Regulation

• Knowing the Consumer
• Investment Needs and Objectives
• Suitability
• Assessing a Consumer’s Attitude to and Capacity for Investment Risk
• Making an Investment Recommendation
• Execution Only
• Provision of Information about the Investment Product
• Client Reviews