Economics and Legal Context in Financial Planning

ECONOMICS AND LEGAL CONTEXT IN
FINANCIAL PLANNING

SECTION A
Question 1: Economic impacts on strategy
LO1. Explore the role of intermediaries in financial markets
A financial intermediary is an element that promotes the exchange of money between two
collections. Such a mediator or intermediary could be an organization or center. There are some
situations of average people associated with money banks, insurance agencies, social care stores,
bank profitability and the sky is the lowest of these. It can also be said that the essential objective
of the budget transition is to restore viability. These intermediaries charge a fee for their
administrations.
Role of intermediaries in financial market
Intermediaries connect a ceiling between speculators and account lenders in the currency
indicators their essential function is to collect assets with financial experts in general and to pass
through the funds of a wide range of lenders. As a result, they benefit to compensate for their
risk. Similarly, they overcome exposure deficits by reducing exchange costs within the currency
years made by buyers and traders. In addition, they also address the unity between buyers and
sellers in the budget markets. In addition, they offer some form of support to both meetings on
collecting items and administrative transportation methods to adequately address their problems.
LO2. Explain the impact of current issues and key economic and financial
indicators on the Australian and global financial markets.
Current Issues: Taxes, innovation theft, duplication and ownership of ships are on the rise in
money markets in Australia and worldwide from various governments. These problems have had
a tremendous impact on inclusiveness, exchange. Markets around the world must emphasize the
issue of exchange taxes imposed by different countries that remove facilitated trade from
different countries. In addition, exchange commission’s affect the assessment of items around the
world that interrupt exchange relationships. In addition, the issue of innovation theft is causing
problems for markets around the world, thus influencing the acquisition of these structures from

the business sectors. Third, the redistribution of loads by different governments affects universal
exchange.
Potential impacts of the US Interest Rate
Ability to purchase the property
Rising borrowing costs in the U.S. lead to a surge in the US currency against the Australian
currency. When lending taxes rise, this shows the development of the country's economy or vice
versa. By the time the US surge has raised loan taxes and outperformed Australia's financing
costs, the U.S. show is proving to be engaging with speculators around the world. and these
returns in the Australian dollar are losing respect to the US dollar. This can affect Jane's ability to
purchase her property with the money from her non-hardcore home. The loan rate would affect
the loan costs. An increase in loan rates would increase debt costs in currency markets. The
higher measures of the high price affect the progression of profitability starting from a region
and therefore on the expected level of negotiation, attracting higher estimates in US dollars in
several U.S. buyers of the property compared to residential buyers, it is increasingly expensive
for local buyers to acquire the property as the appreciation of money in this way damages the
purchase. An increase in loan commissions on money markets is impacting costs as it increases
and this could affect China's current purchases.
Timing of the property purchase
The time of purchase of the property depends on the rate of cost of the loan and the
reasonableness of the property. The best buying opportunity is the rate at which the loan costs
are low and small for the purchase. Extended US borrowing costs affect properties in Australia.
The more interesting the information, the higher the property costs. Jane has to consider it first as
it would cost the purchase. Rising expansion rates create borrowing costs in the budget market.
Extension of loan fees is affecting the extra cash on the back. The higher the financing costs, the
lower the additional cash that will be accessible to China, this would affect the time a property is
purchased.
US interest rates impact on Jane:
Objectives 1: Is she able to buy her own property?
Potential impact:
1. Due to increasing in the interest rate; she will not be able to purchase her own property due to
increase in the prices of real state.

2. The interest on loan will also get increased and tax on property will also get impacted.
Objective 2: Is it the right time to buy a property?
Impact:
1. Buying any property at this time will increase potential cost of owing it; due increased rates of
real state.
2. A high amount of tax has to pay if she purchases a property.
Objective 3: Should she invest her cash elsewhere?
Impact:
1. If she invests in bank; then she will get good interest rate at low risk as; there is increase in
interest rates by US government.
2. If she planned to invest in security market; then the return she will get will be higher than all
but at the same time sequential risk need to be mitigated.
Question 2: Regulatory framework
LO5. Explore the main sources of law and the regulatory structure of financial
services law in Australia
ASIC was established under the Australian Securities and Investment Commission Act 2001
(Cth) (ASIC Act) and controls financial administrations in Australia under the Corporate Act.
ASIC also has authorization controls under the Corporate Act and National Credit Act. APRA is
established under the Australian Prudential Regulation Authority 1998 (Cth) and directs the
Banking Act 1969 (Cth) (Banking Act), the Insurance Act, the Life Insurance Act 1995 (Cth)
and the SIS Act.
The intention and strength of the RBA are established in the Reserve Bank Act 1959 (Cth).
The sources of regulation include both domestic/national laws (laws that apply to activities
within the jurisdiction of a sovereign nation) and international laws (agreements between
sovereign nations).
Domestic law: Each country has an important set of laws. The constitution of the country is the
unparalleled rule that everyone must follow and is usually written in terms of the broad structure