Financial advice/ MOT? how do you find someone who really knows their stuff?

[sellotape12]

I’m finding the world of financial advisors all a bit muddy. A lot of them just feel like middle-aged men in tired suits possibly trotting out advice we could find ourselves online or already have the knowledge of.
Then on the other end of the scale there seems to be grifters. We kind of just wanted some general advice like an MOT.
Any ideas how or where to find someone who’ll understand this market as best they can?

specific things I’d like to ask if we hired someone
• We’re thinking of buying a property that will push us but hopefully be our forever home. It will mean our repayments are 50% of our joint income. Dumb?
• if we apply for this mortgage, should we do a fixed term?
• should we use the capital in our stocks & shares ISA to pay the whopping stamp duty fee, or use it for some renovation, or put both of these things on the mortgage?
• should we get a 25 year term, even though we are both age 37?
• what are good portions of our income to put towards day to savings/replenish the stocks & shares ISA/ pension/ open an account for DS? (He is one)
• what else are we not thinking of?

is this the kind of thing you can ask them? Sorry if I’m being a bit green about this, I guess this is the first step.

I think a FA would struggle to advise on some of the matters you outline, because it's outside the scope of their remit.

A FA will help you establish financial goals; assess current financial situation and explore appetite for risk. They will then develop a plan based on this, and recommend suitable products and services. (They may well have access and knowledge of wider range products than is easily found online).

They advise on financial products and services, and making the most of the tax reliefs and allowances available, and financial protections.

All these things might prove very useful - and as you have already discovered, much of it is available online if you're willing to do your own research.

Asking about the wisdom of a house purchase, and whether to use savings to finance it is trickier, I think. A FA may well be able to look at affordability criteria, suggest suitable mortgage products, list the pros and cons of fixed term offers and relate it to your risk appetite; suggest protections such as loss of income insurance; but advising you on whether to stretch yourself to buy your dream home - no, I don't believe that would be part of their role.

If you are struggling to find a reputable FA - you could start with VouchedFor. They list FA's in your area with user ratings; and most offer an initial one hour
free appointment. You could perhaps try a few free appointments to see which one suits you best.

https://www.vouchedfor.co.uk/

I agree with the above, decisions on house purchasing are not really in the wheelhouse for IFAs who are more about formulating an investment strategy, a mortgage advisor might be a better bet as most of your questions are around buying a house. I will say that a mortgage for 50% of your joint income is a lot, much higher than is generally recommended (although is that 50% of gross or net income?), 35% is a rule of thumb maximum. Have you checked whether you can even borrow that much, 4 x annual joint income is the max you can usually borrow.

A mortgage advisor would be able to advise you on fixed term vs tracker options and the possibility and costs of adding extra borrowing vs using savings (this is some fairly simple maths on a basic level, what interest can you earn from the savings in an ISA or fixed term saver vs how much it will cost you in mortgage interest). Bear in mind though if you are already right at the top end of affordability calculations then adding on extra borrowing might not be possible.

You can also google the 50:30:20 rule which is a useful guide on how much you ought to be saving vs using for living expenses (there's an obvious problem if 50% of your joint income is gone on the mortgage alone!). Once you know how much you have available in each category I do find the money saving expert an invaluable resource for increasing your financial savvy/tools for planning in all sorts of areas, investments, pensions etc. I know it's a website not a 'person' who can advise you but there are also links on there to other sources of support and their money makeover tool is honestly excellent...

Ok that’s really helpful, thank you both. I still think it sounds worth it to use a FA for all the investment strategy stuff, and we isolate the house purchase stuff. Just want to get our financial house in order. Thanks

As for finding financial advisor, recommendations are a big thing. We have had the same advisor for almost 20 years.. He's much like us, same age, kids the same age etc etc so he can easily relate to what we want or need. But be prepared for the first few mtgs to be quite intense as they get a feel for what your priorities are, where you spend your money, your attitude to risk etc. They can't really advice on one thing like savings if they don't know that you've got everything else taken care of (like an emergency fund for repairs, insurance covering the mortgage etc)..