| Module Code: MAN2068 |
Module Title: PERSONAL & RETAIL FINANCIAL SERVICES |
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Module Provider: School of Management
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Short Name: MAN2068
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Level: HE2
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Module Co-ordinator: AGYEI-AMPOMAH S Dr (SoM)
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Number of credits: 20
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Number of ECTS credits: 10
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| Module Availability |
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| Assessment Pattern |
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Unit(s) of Assessment
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Weighting towards Module Mark (%)
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Achievement of the learning outcomes for this module is assessed in two ways:
· via a coursework assignment; and
· via a written examination.
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Coursework assignment:
The assignment will take the form of case study questions. Students will be expected to collect information, undertake research, reflect on or analyse comparative perspectives. The assignment will focus on the customer/provider relationship, different types of customers, 'know your customer' principles and the application of the range of personal financial services to different customer situations.
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50%
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Examination:
Questions will be practical, application-based and focused at an operational level.
The paper will be structured as follows:
· two compulsory 20-mark questions on lending to personal customers and investments; and
· one 10-mark question, from a choice of two, covering the concept of protection and the termination of the customer relationship.
Time allowed: Two hours
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50%
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| Module Overview |
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This module focuses on working in the retail financial services environment responsible for a broad range of customer facing activities. These customers will have needs that initially relate to transaction-based banking facilities then, at some later point, borrowing, protection, investments and, potentially, specialist services. There will be different needs depending on the customers’ life stages and circumstances. There will be emphasis on knowledge and understanding of customers and their needs and the application of relevant services to meet these needs. Students will also have the opportunity to compare and contrast different options available to customers and to demonstrate their understanding of why a particular product or solution may be appropriate.
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| Prerequisites/Co-requisites |
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Financial Services Commercial Environment module.
Management in Financial Service Organisations module.
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| Module Aims |
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This module aims to provide the skills, knowledge and understanding to enable students to effectively manage personal customer relationships and to discuss with confidence the main range of retail financial services. The syllabus is arranged in such as way that it takes students from the inception of the customer relationship across the potential financial needs of that customer, through to the termination and ending of the relationship. The first few syllabus sections provide an overview of the different types of personal customers and their requirements according to lifecycle stages. The focus then shifts to ’know your customer’ requirements and goes on to look, in general terms, at the principles of the wide range of financial services available. Later sections discuss lending to retail customers, the need for security and how customers at risk of non-repayment can be managed; the availability of protection policies to mitigate risk and how more financially secure customers can invest surplus finds. The syllabus closes by considering in what circumstances the customer relationship can be terminated.
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| Learning Outcomes |
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On completion of this module, students will be able to:
· understand the legal and practical principles of effective personal customer management.
· assess personal lending propositions using techniques of credit risk assessment in order to justify lending decisions.
· explain and evaluate the practical principles of personal investment solutions.
· understand the methods of effective credit monitoring, control and recovery, and demonstrate how and when to apply them.
· understand the different types of customer and the nature of the formation/termination of the banker-customer relationship.
· discuss the general principles of security, and define and demonstrate the legal and practical implications of different types of security.
· discuss the general principles of insolvency, and define and demonstrate the legal and practical implications of insolvency.
· explain the major services available to personal customers of a mainstream financial services organisation.
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| Module Content |
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Purpose of the relationship
This section provides an introductory overview to the module where students explore the reasons why customers require banking facilities and what influences their choice of provider. It gives an appreciation of the different choices of delivery channel available to customers and the business reasons why organisations have made these choices available. Building upon previous studies, students will have the opportunity to revisit the contractual and ethical aspects of the relationship between the financial services provider and the customer.It covers the following issues:
· a customer’s motivation to hold banking facilities
· choice of delivery channel for the customer and the organisation
· importance of the contractual relationship
· corporate responsibility and ethics
Types of customer The term ’personal customer’ covers a number of different customer types. This section aims to explore each of these types, drawing on differences and similarities, so enabling students to start to understand different customer needs. Crucially, to lending and investment scenarios, these customer types derive their income and capital in a variety of ways and this section seeks to make these differences clear. It covers the following issues:
· minors
· individuals
· joint accounts
· mental incapacity
· executors and trustees
· residency/domicile issues
· sources of income/capital for customers
· types of employment
Know your customer
‘Know your customer’ principles are key to any financial relationship. This will be considered by students in relation to the aspects of financial crime, perceived lack of financial literacy amongst customers and the necessity to collect sufficient relevant information from customers to enable advisers to give appropriate financial advice. To manage the customer relationship effectively, it will be recognised that customers’ financial needs change throughout their lives and the advice should change accordingly. It covers the following issues:
· regulatory: customer identification, money laundering, selling
· non-regulatory issues: role and personal skills of customer advisor, identifying customer needs
· managing the customer relationship: life cycle considerations
Know your services
Customers’ financial needs can be fulfilled from a wide choice of services provided by a large range of financial service providers. This section aims to give a general overview of the principles of the main services available, which sets the scene for later sections. It covers the following issues:
· deposit and money transfer (interest bearing accounts, current accounts, payment systems)
· borrowing (unsecured, secured)
· protection (general, life)
· investments (direct, indirect)
· specialist services (tax planning, private banking, safe custody)
Protection
This section looks at particular client needs in relation to key areas of vulnerability such as premature death, severe illness or disability and redundancy and how the financial impact of events such as these can be mitigated. It covers the following issues:
· why customers need protection: the concept of insurable interest
· when: the link to life cycle events
· how protection can be provided: main types of policy (general, life, health, redundancy)
Investment Customers may have needs that relate to the investment of surplus funds either from monthly income or from one-off lump sums. This section aims to provide general coverage of the types of issues that will be important to customers in this position and the merits of various types of services to meet those needs. Financial investments, with their attendant risks, are subject to a regulatory regime, this and the compensation available to customers, is discussed. It covers the following issues:
· Why customers want to invest: savings vs investments, levels of liquidity
risk and reward (security of capital invested, income or growth, term of investment)
o tax efficiency/non-UK residency
o ethical investment
o benefits and how they are taken
· When: the link to life cycle events
· How: types of investment/financial services products (including lump sum/regular, direct/indirect, collective, life assurance based, stakeholder/personal pensions, ISAs, offshore)
· Safeguards for the customer: mis-selling, compensation schemes, Ombudsman
Lending to retail customers
· Introduction to the canons of lending for personal customers
The canons of lending provide a framework around which personal applications for credit can be assessed. However, there is a certain amount of information gathering that has to be undertaken before the assessment stage can be reached. Different assessment methodologies are now available to lenders and students should be able to explain the main drivers behind their usage and the relative advantages and disadvantages. There will be a focus on the practical application of theory to scenarios. It covers the following issues:
o the information required and the corroboration of that information in a lending proposition
o assessing the credit risk of different types of personal applicant for credit
o tools for credit risk assessment
o evaluation of a lending proposition
o the role of various credit bureaux in lending assessment and control
· Establishing the need for security
This section focuses upon the circumstances in which a lender would require security and helps students to understand the strengths and weaknesses of various assets that can be offered. This includes ease of valuation and realization and the suitability as a secondary source of repayment. Students are not expected to know the detailed procedures for perfecting security. It covers the following issues:
o forms and types of security: nature, legal effect/implications, use and enforcement of each
· Post Draw Down Lending Matters
This section considers aspects of lending after the advance has been agreed and drawn down. Students should understand the conditions placed upon customers by lenders in order to manage their risk to ensure, where possible, that lending is repaid. There will be instances where repayment does not occur as planned, and the steps taken by lenders to manage the risk on non-payment are explored. The options for customers who fail to repay are covered, along with external sources of help for those that get into severe difficulty. It covers the following issues:
o terms and conditions of lending
o credit monitoring, control and recovery
o personal insolvency: implications and outcomes, including impact on security
o safeguards for the customer (statutory, codes of practice, external agencies)
Termination of the relationship
There is a variety of ways in which the customer relationship can be severed, by either the customer or the financial services provider. This section deals with a number of these occurrences and the actions that the service provider needs to take to manage the risk of non-payment where funds have been lent. It covers the following issues:
· notice of termination
· mental incapacity
· death
· insolvency
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| Methods of Teaching/Learning |
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The teaching and learning strategy is designed to ensure that the students achieve the learning outcomes by the end of the module. The teaching and learning methods include formal lecture and tutorial, private study of text and other supporting materials, a formal coursework assignment, informal exercises, both individual and group-based and pooling of experience and knowledge through class and individual discussion.
Assessment Strategy
The assessment strategy is designed to achieve a balance between testing the student's skills of knowledge recall and understanding and those of analysis, research, reflection and application. This distinction is reflected in the different assessment instruments and the balance between the coursework assignment and the final written examination.
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| Selected Texts/Journals |
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| Last Updated |
| 06/08/2010 |
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