835512
Description
Mind Map by claire.groves, updated more than 1 year ago
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Created by claire.groves
over 10 years ago
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Financial Services Industry - the main participants
- Retail Banking - Traditional
range of current accounts,
deposit account, lending and
credit cards
- Your average high street bank, taking
deposits and lending, money
transmissions. Network of public
branches, as well as telephone and
internet banking. Some larger retail
banks will offer investments, pensions
and insurance.
- UK sector has seen
consolidation, and integration
with non-bank institutions, e.g.
insurance companies.
- Your average high street bank, taking
deposits and lending, money
transmissions. Network of public
branches, as well as telephone and
internet banking. Some larger retail
banks will offer investments, pensions
and insurance.
- Insurance Companies
- Insurance industry is there to ensure risks are managed effectively.
Protection of your assets is key to financial planning advice, and the
insurance industry offers many products to meet need i.e. payment
protection (if an individual cannot meet payments on loan or mortgage), or
fleet insurance again risk of a plane crashing
- Insurance companies collect premiums in exchange for
their cover services. The premium income is used to
buy shares and/or bonds, and therefore makes money
but is also a huge player in the stock market. They will
use whatever their returns are from the investments to
pay out in the instance that a claim is made.
- Insurance companies also market investment products, and are
large in the structured products market - offering stock market
related bonds
- Insurance companies collect premiums in exchange for
their cover services. The premium income is used to
buy shares and/or bonds, and therefore makes money
but is also a huge player in the stock market. They will
use whatever their returns are from the investments to
pay out in the instance that a claim is made.
- Insurance industry is there to ensure risks are managed effectively.
Protection of your assets is key to financial planning advice, and the
insurance industry offers many products to meet need i.e. payment
protection (if an individual cannot meet payments on loan or mortgage), or
fleet insurance again risk of a plane crashing
- Investment Banks
- Investment banks provide
advice and arrange finance
for companies that want to
float in the stock market, raise
additional finanace by issuing
issuing further shares on the
market, or carry out M&A's.
Also offer services for those
who want to invest in shares
and bonds, i.e. pension funds
or asset managers. Most tend
to specialse in a few of these
offshoots...
- Corporate finance and advisory work - normally in
connection with first time shares (often therefore in
demand) to raise finance, take overs or M&A's.
- Banking - for governments, institutions and companies
- Tresury dealing - for corp
clients in FX, to protect them
from interest rate and
exchange fluctuations
- Investment management - for large
investors i.e. corp pension funds,
charities and UHNW. Either direct
investing for individual, or collective
investment schemes
- Securities Trading - in equities,
bonds and derivatives, broking
and distribution
- Corporate finance and advisory work - normally in
connection with first time shares (often therefore in
demand) to raise finance, take overs or M&A's.
- Investment banks provide
advice and arrange finance
for companies that want to
float in the stock market, raise
additional finanace by issuing
issuing further shares on the
market, or carry out M&A's.
Also offer services for those
who want to invest in shares
and bonds, i.e. pension funds
or asset managers. Most tend
to specialse in a few of these
offshoots...
- Savings Institutions -
Building societies,
specialising in saving
- Many building societies have collaberated, or
been taken over by larger ones. In the 1980's
legislation allowed them to become companies,
'demutualisation'.
- Many building societies have collaberated, or
been taken over by larger ones. In the 1980's
legislation allowed them to become companies,
'demutualisation'.
- International Banks - Banking that involves cross
border transactions, and the growth of the bank
reflects the increasing global nature of trade and the
banking associated with it
- Typical activityes involved in this sector deal in financing international
trade. The bank acts as an intermediary between EXPORTER who
needs an importer to pay in advance for goods before they are shipped,
but the IMPORTER wants documentation that the good have been
shipped before they pay. The importers bank will therefore provide a
letter of credit to exporter guarenteeing payment once documentation
shown that goods are shipped.
- Typical activityes involved in this sector deal in financing international
trade. The bank acts as an intermediary between EXPORTER who
needs an importer to pay in advance for goods before they are shipped,
but the IMPORTER wants documentation that the good have been
shipped before they pay. The importers bank will therefore provide a
letter of credit to exporter guarenteeing payment once documentation
shown that goods are shipped.
- Pension Funds - Variety of pension schemes
available, from employer schemes to self
directed schemes.
- Large, long term investors in shares,
bonds and cash. Some also invest in
assets such as property.
- Large, long term investors in shares,
bonds and cash. Some also invest in
assets such as property.
- Fund Mangagers (aka asset
managers or investment
managers)
- Professional management of portfolio's for private and institutional investors. Assets of the
total global funds are made up of:
- Conventional / Institutional Fund manager - works on
behalf of an institutions i.e. investing for a companies
pension fund or insruance companies fund, or
investment of a unit trust
- Private wealth fund Manager - private investors. They will run
collective investment schemes, OEIC's and unit trustsfor private
clients
- OEIC's - Fund that is structured to invest in
other companies with the ability to adjust
constantly its investment criteria and fund
size
- Unit Trusts - a fund that that offers a fixed, unmanaged
portfolio, generally of stocks and bonds, as redeemable
"units" to investors for a specific period of time. It is
designed to provide capital appreciation and/or dividend
income
- OEIC's - Fund that is structured to invest in
other companies with the ability to adjust
constantly its investment criteria and fund
size
- Conventional / Institutional Fund manager - works on
behalf of an institutions i.e. investing for a companies
pension fund or insruance companies fund, or
investment of a unit trust
- Professional management of portfolio's for private and institutional investors. Assets of the
total global funds are made up of:
- Stockbrokers
- Stockbrokers arrange stock market
eschanges on behalf of their clients
(mainly private, but also fund managers or
investment institutions). The can execute
only (buy or sell), but also advise.
- Stockbrokers arrange stock market
eschanges on behalf of their clients
(mainly private, but also fund managers or
investment institutions). The can execute
only (buy or sell), but also advise.
- Trade and Professional Bodies (e.g IFA)
- The investment industry needs co-operation between firms to ensure that the
views of various industry sectors are reprosented to governements and
regulators. Verious bodies exist for the secors such as:
- Bonds - International
Capital Market
Association ICMA
- Fund Mangagers -
Investment Manager
Assiciation IMA
- Insurance -
Assosiation of
British Insurers ABI
- Bonds - International
Capital Market
Association ICMA
- The investment industry needs co-operation between firms to ensure that the
views of various industry sectors are reprosented to governements and
regulators. Verious bodies exist for the secors such as:
- Custodian Banks
- Custodian banks specialise in
safely looking after portfolios of
shares and bondss on behalf of
fund managers, pension funds or
insurance companies
- Holding assets in
safekeeping, like
equities and bonds
- Arranging settlements of sale
or purchase of security
- SECURITY - A tradeable
asset e.g. debt security,
equity security etc
- SECURITY - A tradeable
asset e.g. debt security,
equity security etc
- Collecting income
from assets i.e.
dividends or interest
- Managing cash
transactions
- Performing FX
echanges
- Providing
reporting of
their activities
to clients
- Holding assets in
safekeeping, like
equities and bonds
- Custodian banks specialise in
safely looking after portfolios of
shares and bondss on behalf of
fund managers, pension funds or
insurance companies
- Third Party Administrators
- TPA's do all the investment administration on behalf of
other firms, and specialise in doing only this. There is an
increasing use of firms outsourcing, and so TPA's have
grown. Outsourcing means that a firm can focus on its
core business, while the TPA does the admin efficiently
and cost effectively
- TPA's do all the investment administration on behalf of
other firms, and specialise in doing only this. There is an
increasing use of firms outsourcing, and so TPA's have
grown. Outsourcing means that a firm can focus on its
core business, while the TPA does the admin efficiently
and cost effectively
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