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  Improve Your Financial Knowledge - Part 8

  1-Sep-2022

  24. The Investment Industry's Players:

  * Providers of capital (lenders)

  * Users of capital (borrowers)

   

  25. Types of Securities:

  1. Equities are shares, issued by a corporation for the share owners (Common shares * Preferred shares)

  2. Fixed income securities are issued by governments and corporations, to borrow money (Money market instruments * Bonds * Debentures)

  3. Derivatives are contracts, to give the holder the right to buy/sell an asset and its value is derived from the asset (Options * Futures)

  4. Investment funds, issue the fund units to investors. (Mutual funds * Closed-end funds * Exchange-traded funds * Alternative funds)

   

  26. Types of Securities Issuers:

  1. Corporations issue bonds, stocks, debentures, or money market instruments

  2. Governments issue bonds.

  3. Some issuers, known as manufacturers, create investment products, such as investment funds, limited partnerships, and structured products, and receive management fees, etc.

   

  27. Who are Distributors?

  Distributors sell securities to investors, including Investment, Mutual fund, Exempt market, and scholarship plan dealers. 

   

  28. Distributors receive:

  1. Dealing fees from issuers 2. Commissions or Fees from investors 3. Trailer fees from fund manager.

   

  29. Commission-based and Fee-based Distributers

  * Traditionally earned according to the commission-based model, there is an evolving trend of distributors, moving to a fee-based model.

  * Under the fee-based model, the investor opens a fee-based account and pays a pre-determined fee based on the assets under management monthly, quarterly, annually.

   

  You can book your consultation at 

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  Or call us at 647-830-8080

   

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