Level 3 Advanced Diploma in Business, Administration and Finance
Advanced Diploma in Business, Administration and Finance
Planning for Personal Financial Stability
Guided Learning Hours: 60 (GLH all for teaching and learning activities)
The purpose of this unit is to give you the knowledge and skills necessary to plan and manage
your future finances. In the next few years you are likely to have increasing amounts of income
which are likely to be accompanied by additional demands for expenditure. It is therefore vital that
you know how to take control of your spending and the techniques you can use for avoiding debt.
You will learn about the different opportunities for investing your money, the most commonly-used
financial products and services and appropriate sources of financial advice. This unit will develop
the enterprise skill of financial awareness through development of skills in financial planning.
This unit is externally assessed.
The external assessment involves a written examination. The examination involves the application
of knowledge and understanding to case scenarios and learners will be required to prepare
personal financial plans to reflect changes over time.
For further information about the requirements, teachers should refer to the test specification
associated with this unit.
Learners will: 1. Be able to manage finances
Assessment Criteria Taught Content
Learners can: Learners will need to develop skills in evaluating the advantages and
disadvantages of financial products and services. To enable this,
1.1 Evaluate the learners need to develop understanding of the main types of financial
advantages and products and the various types of services available to the general public
disadvantages of and their potential benefits and uses. Products and services that must be
financial products and covered include current accounts and associated transactions, ISAs,
services (IE4) personal endowments and insurance policies, including pensions, share
dealing, other savings accounts; loans and mortgages, short-term credit,
1.2 Select financial products eg: credit cards, overdrafts. Learners will also need to develop skills in
and services to meet analysing and evaluating the terms and conditions that make up their
needs main features and how they function. Learners will develop skills in
evaluating the significance of factors such as: minimum/maximum
1.1 Prepare personal investment, AER % APR %, notice for withdrawals, management fees,
financial plans to reflect insurance tax, minimum investment period, penalties, commission,
changes over time repayment period/minimum repayment, credit limit.
Learners will need to develop skills in selecting financial products and
services to meet the needs of individuals. This must be underpinned by
understanding that different people have different attitudes to risk, levels
of income, credit rating and other financial commitments. Selection of
appropriate products must take into account these factors. Learners
should develop understanding of a range of financial services and
products including online providers of financial services/products and
identify the advantages and disadvantages associated with each
product/provider. Learners must understand the range of financial
companies that provide financial services.
Learners will understand the concept, purpose and sources of money, as
well as the value of money and how it can change over time due to
inflation and other factors. This should allow learners to develop skills in
preparing personal financial plans to reflect changes over time. This
must include using different sources of income in the short and medium
term to meet different items of expenditure, appreciating the need to take
personal responsibility for their financial decisions. Learners must find
out realistic levels of expenditure for different items to apply to their
plans. Saving and investment must be included in current expenditure. In
order to do this effectively learners will need to distinguish between
needs, wants and aspirations; compare risks and rewards.
The personal financial plans must include consideration of external
factors, for example, interest rate charges, inflation, job loss, exchange
rate changes, promotion and unanticipated expenditure. Learners will
need to develop skills to manage money in different situations and show
how these are met by income, savings, investments, insurance and/or
borrowing. They will also need to be able to calculate foreign currency
and show how it affects consumer’s plans.
Learners will: 2. Understand the principles of financial risk
Assessment Criteria Taught Content
Learners will develop understanding of the need for, and roles of,
Learners can: financial advisors who can help plan for current and future financial
needs. They will be able to distinguish between independent financial
2.1 Analyse sources of advisors, who are able to recommend products from a variety of
financial advice providers but are paid by commission, and ‘tied agents’, who are
restricted to the products offered by one company. In addition, learners
2.2 Explain the risks and must be aware of other types of financial advice, including online advice
benefits of opportunities about products and services, leaflets, direct mailing, Citizens’ Advice
for investment Bureau.
1.2 Evaluate the services Learners will need to develop understanding of the different features;
available to help risks and benefits associated with each type of product/service and be
individuals avoid or able to compare information from different providers to evaluate the best
resolve financial deals. Learners will also need to develop skills in distinguishing between
difficulties (EP4) the risks involved in direct investment, eg in a savings account or
shareholding, and a ‘pooled’ investment in a scheme where money is
invested jointly with other investors’ money in a variety of funds. Learners
must be aware of protection that is available to consumers, including the
role of the financial services authority.
Learners need to develop understanding of the risks of getting into debt.
This should include the impact of possible factors such as illness, loss of
job and emergencies. Learners need to develop understanding of the role
of the Financial Services Authority, Trading Standards Offices, Citizens’
Advice Bureau, and other organisations in providing both advice and
guidance on debt management as well as general information. Learners
will also need to develop an understanding of how to identify
improvements that would benefit others’ financial position and their own.
Learners will: 3. Understand how financial needs vary.
Assessment Criteria Taught Content
Learners can: Learners will need to develop understanding of money management and
attitudes to risk, with particular reference to the impact of different
3.1 Analyse cultural and cultures on attitudes and approaches to money and financial services.
ethical attitudes to Learners will need to develop skills in considering the influence of
finance and financial circumstances, beliefs and attitudes on financial decisions. In particular,
planning (IE5) learners will need to develop understanding of how personal ethics
towards money are influenced by external factors and an individual's
3.2 Explain how individual circumstances, age, cultural background and attitude to risk. Learners
financial needs change must compare this with how they perceive their own behaviour as
over time consumers and their attitude to risk. Learners need to develop skills in
comparing different attitudes to risk whilst considering the reasons behind
3.3 Analyse factors that these attitudes and analysing how attitudes are affected or altering in
impact on an individual’s response to modern society.
Learners will need to develop understanding of how individual
situations can alter over time and how financial requirements can vary.
This will require understanding of the risks and rewards associated with
financial products and how these can have differing levels of significance
depending upon an individual’s changing circumstances. There should be
emphasis here on the need for individuals to be willing to take some risk
or be inconvenienced, for example by money being tied up for a
significant time to receive higher return on their investment. They will be
able to specify the different attitudes to risk associated with different
types of individuals and how this will relate to the products that they
choose, including financial protection plans and online products and
services. Learners must reflect on their own attitude to risk, including how
this might change over time.
Learners need to develop understanding of the factors that can impact
on an individual’s financial position, such as getting married, starting a
family, moving home, changing jobs, etc. They will need to understand
the purpose of other financial protection policies (including life assurance,
critical illness cover, payment protection schemes, etc) to identify
situations in which these would be appropriate. In doing so learners must
develop the skills to assess the potential rewards to consumers if affected
by external factors and problems associated with such policies.
Examples are included throughout this section, however these are not
designed to be exhaustive lists and centres can use alternative examples
The paper is marked out of a total of 100 Marks, As learners will need reading time for
material that they have brought into the examination this paper is out of fewer marks
than the other BAF level 3 papers. The split of marks according to learning outcome is
Learning Outcomes Percentage Marks Number of Marks
1. Be able to manage
2. Understand the
principles of financial risk
3. Understand how
financial needs vary.
Guidance for Centres
EDI has embedded Personal, Learning and Thinking Skills in specific assessment
criteria within this unit. This is to ensure learners have the opportunity to develop these
generic skills and competences within the context of learning experiences specifically
related to planning for personal financial stability. The identification and application of
specific PLTS within individual learning outcomes and assessment criteria also allow
learners to plan and review their personal achievement and development.
There are further opportunities for a range of PLTS to be developed through the
teaching and delivery of this unit. The following sections highlight some of these
additional opportunities for PLTS development and provide guidance for how these
development opportunities can be implemented. Further information about PLTS and
their application within the principal learning for the Diploma in Business, Administration
and Finance can be found in the guidance document.
The following PLTS are assessed as part of the requirements of individual learning
outcomes and assessment criteria and it is therefore necessary that they are delivered
as part of the taught content.
Independent enquirers (4) (5)
The outcome statement for this particular PLTS, as identified in AC1.1 requires young
people to “analyse and evaluate information, judging its relevance and value” (IE4). At
level 3 and within AC1.1 this will involve learners in identifying a variety of financial
services and products and evaluating their value to individuals and organisations,
according to their needs and circumstances.
Similarly, the outcome statement for IE5, as identified within AC3.1, requires young
people to “consider the influence of circumstances, beliefs and feelings on decisions and
events”. At level 3 and within AC3.1 this will involve learners in developing an
understanding of how cultural and ethical attitudes will influence the types of financial
products and services deemed appropriate for different individuals and organisations.
The assessment for this unit will require learners to demonstrate that they can analyse
information about cultural and ethical attitudes to finance and financial planning, judging
the relevance of this information to the provision of financial advice.
Effective participators (4)
The outcome statement for this particular PLTS, as identified in AC2.3, requires young
people to “identify improvements, which will benefit others as well as themselves” (EP4).
At level 3 and within AC2.3 this will require the learners to carry out research into the
different financial advice services available to individuals, evaluating and making a value
judgement about which services are most appropriate for different individuals and
different personal circumstances. Learners will also need to be able to differentiate
between similar products offered by different organisations in order to make informed
recommendations to help individuals. As part of this assessment criteria, learners will
need to be aware of the consequences of providing unreliable advice to others.
There are a range of PLTS, which can be developed through the teaching and delivery of this
unit. Some opportunities for PLTS development are highlighted below, although the examples
listed do not form an exhaustive list.
Creative thinkers (1) (2) (6)
Through the delivery and teaching of this unit, learners should be encouraged to develop
skills in thinking creatively about solutions for establishing financial stability. In particular,
learners will need to develop the ability to “adapt ideas as circumstances change” (CT6)
when selecting financial products and services to meet the needs of a variety of
individuals. Learners should be made aware that individuals may appear to have very
similar needs, although in reality they may require very different financial products and
services because of their cultural background or attitude to risk.
Creative thinking plays a key part in an individual’s short and long-term financial
capability and learners should be encouraged to develop skills in demonstrating
creativity when making decisions about sources of financial advice and strategies for
financial risk management. Creative thinking in relation to financial capability is expected
to be both innovative and realistic. In particular, learners should be encouraged to
“generate ideas and explore possibilities” (CT1) in using creativity to become
enterprising and selecting financial services and products which are suitable for different
individuals. This will also involve the learners asking questions of the providers of
financial advice and services in order to understand how the products or services would
suit different individuals.
Team workers (1) (2) (4) (5)
Learners should be provided with the opportunity to carry out investigative activities both
independently and as part of a group. Learners could be asked to work as part of a
group in order to review how the financial needs of a group of individuals vary (LO3).
This will allow learners to develop skills in working with others in order to achieve a
common goal (TW1) and reaching agreement (TW2) about the different attitudes
towards finance and how financial needs differ or evolve. This activity will also allow
learners to develop skills in listening to the other members of the group and taking into
consideration other people’s opinions.
Learners could also be encouraged to work together and develop teamworking skills
through delivery of AC2.1, when they are asked to analyse sources of financial advice.
They could “collaborate with others to work towards common goals” (TW1) by joining
together in small teams with each member of the team taking responsibility for
researching a number of sources of financial advice before reporting back to the group.
There are a wide range of opportunities for this unit to be delivered through investigative
activities, which could be carried out in groups. For further information please see the
delivery guidance section of this specification.
Learners at this level must achieve ‘mastery’ in the functional skills of English, ICT and
Maths at Level 2. Learners who have already achieved Level 2 in functional skills must
be supported to develop further functional skills to a higher level to prepare for
employment or higher education. ‘Mastery’ means that the learners are able to apply
their skills in English, ICT and Maths at that level, in any situation related to living and
working. The activity, which is given below, has been set at beyond Level 3 on the QCF
(Qualifications and Credit Framework), in order to give learners the opportunity to show
their autonomy in preparing for their chosen career path.
The knowledge and understanding required is:
Use practical, theoretical or technical understanding to address problems that
are well-defined but complex and non-routine.
Analyse, interpret and evaluate relevant information and ideas.
Be aware of the nature and approximate scope of the area of study or work.
Have an informed awareness of different perspectives or approaches within the
area of study or work.
Each functional skill has a separate, externally set and marked summative assessment.
However, if learners are to acquire ‘mastery’ of the functional skills, it is preferable for
them to be provided with integrated learning opportunities in which to demonstrate
application of all 3 functional skills. In providing such opportunities, teachers will find it
relatively easy to integrate English and some sections of ICT into projects, but
integrating the functional skill of Maths will require more thought. However, prior to
embarking on full projects, learners will need to practise demonstrating competence in
applying functional skills during simple classroom exercises.
Teachers should focus on the right hand column of the standards for the functional skills
of Maths and English to ensure that learners achieve full coverage of the standards, ie
‘mastery’, and to ensure that they are prepared for the external summative assessment.
With regard to ICT, however, the middle and right hand columns need to be covered.
The activity below is an example activity which shows how functional skills can be
developed through the delivery of this unit. There is no requirement for learners to
complete the activity highlighted below and teachers may prefer to deliver the learning
outcomes within this unit through other delivery strategies. However, teachers should
refer to the following example as a specification for how functional skills can be
addressed through delivery activities. Further information about how the unit may be
delivered can be found in the delivery strategies section of this unit specification.
Suggested Case Study and Activity
Carol and Bob have been in a relationship for 2 years and have shared rented
accommodation for one year. They are both 28. Carol is a manager with a local primary
health care trust and earns £30,000 per annum. Bob is a car sales manager and his
basic salary is £15,000 per annum but he does get a percentage of the sales made by
the sales team which can boost his earnings to £30,000 to £35,000 per annum, but this
cannot be guaranteed. They are getting
married next September and Carol is adamant that in addition to saving up for a wedding
and honeymoon, they should buy a house. Bob does not think that they can have the
wedding and save up for a deposit on a house. They have savings of £10,000 at the
moment, they pay £650 per calendar month to rent the flat and Carol will need to change
her car this year.
Activity Functional skills addressed
What are the advantages/disadvantages ICTU1.1, 1.2, 1.3, 1.4; 2.1, 3.1, 3.2, 4.2,
of getting a loan to pay for the cost of the 5.1
wedding? Carol has said they would ICTFS1.1, 1.2, 2.1, 2.2, 2.3
need between £6,000 and £7,000 but
they also want a honeymoon in the ER1.1, 1.2, 1.3, 1.4,
Caribbean. How could family and friends
help them to cut the cost of the wedding? M1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.10, 1.11,
What is the average cost of a small, semi-
detached house in the north west of
England? How much deposit are they
likely to have to offer? What kind of
mortgage are they likely to be offered?
Would it be worth Carol trying to make
her car last a bit longer? She has 30,000
miles on the clock and does need it to get
ICTD1.1, 1.2, 1.3, 1.4, 1.6, 1.7, 1.8, 2.1,
Consider all the options and prepare a 2.2, 3.1, 3.2, 4.1, 4.2, 5.1, 5.2
report for Carol and Bob recommending
possible ways forward. Role play giving EW1.1, 1.2, 1.3, 1.4, 1.5, 1.6
them a summary of your findings face-to- ESL1.1, 1.2, 1.3, 1.4
ICTU1.1 etc = ICT Use ICT systems 1.1 ICTFS1.1 = ICT1.1 Find and select
ICTD1.1 etc = ICT1.1 Develop, present and communicate information
M1.1 etc = Maths 1.1
ESL1.1 etc = English speaking and listening 1.1
ER1.1 etc = English reading 1.1
EW etc = English writing 1.1
Please refer to the EDI Guidance for Centres, which gives tables showing the full list of
learning outcomes for functional skills.
The functional skills identified as being addressed are dependent upon the scope of the
project as presented by the learner.
It is expected that learners will make extensive use of ICT to prepare charts, graphs etc.
Also the use of PowerPoint for presentation and use of images in text and presentation.
This is a High control unit and as a result the task is an exam paper set and marked by
Guided Learning Hours
This is an externally assessed unit and as a result centres should use the whole GLH for
teaching and learning activities. Learners must have the opportunity to carry out
facilitated individual and group research to prepare for this paper.
Throughout this unit the primary aim should be to encourage learners to think about how
they can manage their finances now and in the future. Learners should be encouraged
to consider their future aspirations and make plans towards these. The unit should be
linked to Unit 1: Realising Business Enterprise and students should be using the skills
acquired in devising budgets to help develop their business plan. The unit could also be
linked to Unit 5: Managing Finances in Business. Examples of how the topic could be
Encourage learners to visit Banks and Building Societies to obtain their own
leaflets and other materials. As there is such a large amount of information
available it may create an opportunity for a useful project in establishing a leaflet or
information “bank” in a classroom.
Carry out searches into different financial products on the internet using financial
service providers’ own websites and product comparison sites.
Use of promotional materials from banks, building societies, insurance
companies and other financial organisations. These could be used as a discussion
theme for groups to consider the different market segments the materials are
targeted towards and evaluate the effectiveness of different materials.
Prepare budgets from sample case-studies and own figures gathered from
research. Learners can use scenarios to examine how objectives vary for different
stages in people’s lives ranging from university students, young single working
people, young newly-weds, middle-aged parents and people working towards
Identify current annual income and expenditure from all sources and prepare a
personal budget from this information. Learners should be encouraged to build in
typical goals such as matching short-term financing to short-term needs and
longer-term loans to ‘capital’ assets such as houses and cars.
Prepare budgets on spreadsheets using templates and adjust formulae. Develop
different situations so that learners can appreciate that there is not necessarily a
“right” answer when budgeting.
Learners could be encouraged to work as teams and discuss different cultural
attitudes towards borrowing and lending, with possible consideration of the
reasons behind such attitudes.
Arrange a talk from a local bank and insurance company and ask the provider
to give examples of situations where individuals have got into problems through
poor financial planning or awareness.
Use case studies to identify the most appropriate financial product or service for
different situations. Run mock saving and borrowing exercises so learners can
calculate and compare the performance of different investments or loans over
periods of time.
Run mock investment games where learners create fictional portfolios of shares.
This can be run as a group exercise where each team is given the same notional
amount to invest and the teams can “buy and sell” shares at actual prices. Teams
can compare performance at set times each week to identify which group has the
best portfolio. Teams can be required to provide simple reports to explain how they
have reached decisions concerning which company shares to buy or sell.
All of the units included in the Diploma are distinct but will also have significant links to
some of the other Diploma units. This section highlights where there are opportunities for
centres to develop a holistic approach to the Diploma, based around the opportunities to
link units with some related or matching content.
This personal finance unit develops learners’ skills in business enterprise:
Business awareness – learners will develop knowledge and understanding of the
financial industry and the different products that they offer to customers. This knowledge
can be used in terms of learning about potential careers but also by applying the
knowledge to business situations.
Risk management and taking – learners will develop understanding of the different
risks and rewards of financial products and services. This will include an understanding
that it is often necessary to take some risk to give an opportunity for significant reward.
The following units have important, direct links with Unit 4: Planning for Personal
Unit Link to Unit 4: Planning for Personal Financial Stability
Unit 1 – Realising Level 3 Unit 4 Planning for Personal Financial Stability
Business Enterprise develops learners’ skills in risk management and risk-
taking. It will give learners an idea of what their own
personal attitude to risk is, and therefore this knowledge
can be used in Unit 1. Additionally, knowledge and
understanding of financial products will give learners
information about some potential sources of finance that
may be available and ideas about how to sell their idea to
Unit 5 – Managing Level 3 Unit 5 Managing Finance in Business requires
Finances in Business learners to evaluate the potential sources of business
finance available. The knowledge and understanding of
financial products gained in Unit 4 will contribute towards
this. Additionally, Unit 5 requires learners to set up
budgets for business situations; this skill will have already
been developed in a personal context.
Revised Business & Administration Student Handbook L3 (cFa 2007)
Arnold G: Financial Times Guide to Investing (FT-Prentice Hall 2004)
Glasgow F: Personal Finance & investing (John Wiley 2007)
Gowthorpe G: Business Accounting for non-specialists (Thomson Learning 2005)
Hall, Raffo and Jones: Business Studies (Causeway press 2004)
Levy & Post: Investments (Prentice Hall 2004)
McLaney E and Atrill P: Accounting, an Introduction (Prentice Hall 2004)
Tyson E: Personal Finance for Dummies (John Wiley 2006)
The Independent (Money section)
The Guardian (Finance section)
Mail on Sunday (Finance section)
Sunday Express (Money section)
Sunday Times (Finance section)
www.fsa.gov.uk (Financial Services Authority)
www.moneysupermarket.com (Guide to various financial services)
www.thisismoney.co.uk (Guide to various financial services)
www.moneyfacts.co.uk (Guide to various financial services)
www.find.co.uk (Guide to various financial services)
www.moneyextra.com (Guide to various financial services)
www.Fool.co.uk (Guide to various financial services)
www.Which-Bank-Account-4u.co.uk (Guide to various financial services)
www.confused.com/ (Guide to various financial services)
www.hsbc.co.uk (Bank website)
www.halifax.co.uk (Bank website)
www.alliance-leicester.co.uk (Bank website)
www.natwest.com (Bank website)
www.lloydstsb.com (Bank website)
www.barclays.co.uk (Bank website)
Personal Finance + Student CD-ROM + Personal Financial Planner + SkillBooster
(McGraw Hill 2003) ISBN 0072952407