In the financial markets, customers can select options most suitable to their needs from the large number of services and service providers on offer. It pays to read the prospectus and the contractual terms and conditions for the service thoroughly and consider whether the services are suitable for one's own purposes.
The provision of financial services is a rigorously regulated area. Laws and regulations determines not only who may provide financial services but also what type of code of conduct must be observed in providing services to their customers. Many sectors have also issued their own rules and policies.
These pages provide an overview of the most frequently provided services in the financial sector: banking and payment services, investment services, and insurance services. If you do not find what you searched for here, it is also worth examining the section ‘Financial products’. Information on loans and deposits, for example, is available in both sections.
Comparison of services is worthwhile
When you are making a choice between different services, it is sensible to compare the contents of the services provided by various service providers and the charges and other costs involved. When comparing costs and expenses, one should ensure that the information is provided in a comparable manner.
If necessary, do not hesitate to ask for further information on the contents and prices of the service offered. For example, when you compare insurance offers, examine the indemnity clauses of different insurance companies carefully before you sign an insurance contract.
It is important to read contractual terms and conditions
When agreement is reached on the provision of a service, it often requires the signing of a written contract. Before you sign a contract, always read the terms and conditions of the contract. When you are entering into a contract, also ascertain for example whether the contract can be terminated and on what grounds.
The contract can often be terminated in a manner defined within the terms and conditions of the contract itself. Typically, the termination of a contract becomes valid after a period of notice. In some cases, the customer may be required to pay the costs arising from the termination to the service provider. On the other hand, certain contracts, such as agreements on long-term saving where the funds cannot be withdrawn before retirement, are tied and can be terminated only in situations provided for in law.
Information to be supplied to service providers
It is in the customer’s own interest to give adequate information on himself and his financial situation to the service provider. This enables the service provider to provide essential information on the services, products and related risks to the customer.
In providing investment services, for example, the service provider is required under law to obtain information on the customer’s investment objectives, financial situation and investment knowledge and experience, in order to be able to recommend products or transactions suitable for the customer. Similarly, insurance companies need information on their customers’ requirements for insurance protection in order to be able to offer the appropriate coverage, and banks need information on a customer’s financial situation when extending credit.
Provision of services requires authorisation
Provision of financial services normally requires authorisation from an authority that supervises financial markets, in Finland this is from the Financial Supervisory Authority (FIN-FSA).
Services may also be provided from one EEA member state to another on the basis of authorisation granted in the home member state. In such a case, the operations are mainly supervised by the supervisory authority of the service provider’s home member state. Marketing conducted in Finland as well as contractual terms and conditions and procedures with respect to the customer relationship are also supervised by the authority of the host member state, in Finland this is the FIN-FSA.
If you intend to purchase services from an unknown service provider, always make sure that the service provider has valid authorisation.