INSU07027 2022 QFA Investment - Practice

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.

Calculate and present the personal taxation liabilities, including the taxation treatment of savings and investment products for a customer; and

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

Act effectively under guidance in a peer relationship with qualified practitioners; learn to act in variable unfamiliar learning contexts managing tasks independently, professionally and ethically.

This module will be delivered through self-directed learning with the support of a supervisor and mentor in the student's workplace. This module complements the "QFA Investment" module and allows the student to integrate their academic knowledge gained into a practical work-based setting in the completion of a number of case studies and on-the-job tasks. The student will have ample choice to enable them to pick an agreed number of case studies and tasks from the work-based syllabus. The student should focus on case studies that are appropriate to their working environment. The completed case studies will be submitted through the learning management system having been signed off by their supervisor. The completed case studies will be reviewed by IT Sligo's academic programme leader.

There are specific requirements which must be met by the student in completing the experience-based syllabus. The work-based supervisor is required to validate that the case studies and tasks meet the attainment of the learning outcomes of the module. Specific criteria are provided for each of the case study areas. The student must answer the relevant questions posed in the prescribed format. The work-based supervisor will assess the case study/task on a pass / fail basis and the completed case studies (with the supervisor's report) are uploaded to the learner management system by the student. The case studies will not be considered/accepted as complete if they are not submitted with the supervisor's signature/report

This module will be assessed 100% by continuous assessment.

This module has been designed to complement the ‘QFA Investment module. The student will relate the topics covered in that module to their workplace environment and will work on these learnings in a business context.

This assessment examines the student's understanding and application of knowledge. These questions will require students to link pieces of information together in a cause-and-effect relationship and apply their knowledge and/or understanding to a given set of circumstances.

The answers will involve an essay-type response.

The work-based supervisor must sign-off on the student's submission. The student has a maximum of 3 opportunities to submit their work to their supervisor.

A submission will not be accepted or considered complete if the work-based supervisor has not signed off on the work and the sign-off sheet is not included with the submission.

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