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Good financial advice? DH suspicious!(12 Posts)
We are due to have our mortgage renewed and do I got a financial advisor down. Whole of market advisor so not pushing any particular products. During the two hours he was with us I thought he gave us some good advice albeit he was a bit patronising at times. Pointed out that our home insurance wasn't valid as we don't get our alarm serviced. Queried why we had a loan rather than borrowing against the mortgage (still trying to get my head around that one but basically much cheaper rate of interest). Spoke to us about making a will and severing joint tenancy. Pointed out we didn't have critical illness cover (I thought this was covered under life insurance). Overall I thought he was very thorough - DH just thought he was trying to sell us stuff. What do you think?
Well the point about your insurance will probably save you money in the long run.
He is not going to write your will so won't make any money there. It is better to have one look for mumble chums advert for good priced will.
Check your life insurance to see what it covers one of mine has terminal illness benefit, but none of them have critical illness cover.
With the loan you have to work out if a higher interest rate over shorter period is cheaper or more expensive than lower interest rate of mortgage, but probably over longer period.
Not certain about joint tenancy, but that is my wasn't there summary of points.
He was trying to sell you stuff. That's how they make their living. Frankly buy a good book on finance and you can work most of the stuff out yourself. 'Whole of market' is misleading. It generally means we choose the one paying the best commission. Treat a patronising IFA (or any in fact) with care
Check with your home insurers - it may or may not be a condition of your insurance to get an alarm serviced. And the only advantage of a loan is it isn't secured on your house if you default - adding to the mortgage if you can will be cheaper, but may not have been an option pre-renewal
And life insurance is for if you die - critical illness might be covered but probably isnt.
If you don't know the details of all those issues, he's done you a big favour alerting you to them - insurance is the only one he's likely to be able to sell you and may well get you a good deal - and yes get commission.
A will is vital if you have kids, and if you want your house in trust so they don't have to pay inheritance tax when the second of you dies, then you need to sever the joint tenancy.
If all this stuff was new to you and DH, I can understand him coming across as patronising. If you aren't paying him, then he gets paid by commission, but as our IFA explained, 90% of the products on the market pay him commission, so that makes him reasonably independent!
I agree with the above. Life insurance is not necessarily critical illness insurance which pays out if you're diagnosed with a serious disease. A will is important to have if you don't want to leave the people behind with a headache. Adding extra to a mortgage is often a cheaper way of borrowing money than a loan, especially when it's for things like home improvements. It's his job to make your money work harder and point out what products are available. I don't think he's suggesting anything outrageous.
I agree, I think he was giving us some sound financial advice and then it is up to us to decide what we do with it. I am happy to hold my hand up and say that we are not very savvy financially but he really was patronising at times - he must have thought we were a right pair of numpties ! He checked our insurance and so that is true and needs sorting. The loan onto the mortgage was to do with a car loan that my DH took out a couple if years ago - a bone of contention with me as the interest rate was so high. Thanks for sharing your thoughts, I feel reassured.
Personally, I would never borrow the money for a depreciating asset like a car against my house because, whilst I don't mind sending a car back I can't afford any more, I really wouldn't like to end up homeless because I've defaulted on the mortgage! However, from a strictly mathematical POV, if you have high interest loans/HP/credit cards, a lot of equity in a property and plenty of disposable income, an increased mortgage might be a good way to bring down your expenses. Most IFAs would look at your total debt burden and suggest consolidating it in some way.
IFA commission disappears in 2013, so many IFAs are trying to get people to sign up to stuff now so they don't have to justify the fee in the new year. Your IFA should fell you how much kick back they are getting, but most don't.
My impression is that it's a bit of a mixture of advice designed to make it sound like you need to do lots of stuff immediately.
Insurance and will, fair enough. Critical illness insurance is the one they always without fail try to sell you; my feeling is that it is very expensive and difficult to get a policy that will cover every eventuality, but that's only my impression. I have always felt it was better to just try and save more, but it's easy to say that and hard to do.
That's interesting Alad. I wanted to ask him how/how much commission he gets paid but I didn't get a chance as I had to see to my DS.
Joan - I was thinking similar about critical illness. I wonder how many people do actually take it out. I know you can never say never but me and DH are fairly fit and healthy, don't drink and no family history of any early cancers etc.
At the end of the day we asked him down for mortgage advice and he will hopefully come up with something good for that. I need to sort the insurance out and DH has been encouraged to try and claim back a PPI but he is going to do it the Martin Lewis way and not through a broker.
Lol, that is a blatant lie about not drinking! We don't smoke though.
I'm always offered critical illness insurance by IFAs and I never take it out. In part, because it's relatively expensive and, like you, because there is no family history of serious illnesses, but also because I've heard so many stories of companies trying to wriggle out of claims that I don't have much confidence in the products.
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