In praise of in-person financial advice
Atimely email popped into my inbox this week. It stated that fewer than half of prospective and current homeowners use a mortgage broker, according to research from insurance company Metlife UK.
At the time I was stuck on a call to my bank, listening to endless loops of music. The wait gave me plenty of time to digest the details of the poll – accompanied by Boyzone.
Many respondents stated that cost is the biggest barrier to seeking advice from an independent broker.
But Metlife UK states that this shows: “A widespread misconception about the advice market. In some cases mortgage brokers don’t charge buyers a fee and will instead take commission from the mortgage provider. The advice or help the buyer has been given can be invaluable.”
I’m inclined to agree. In the past, according to the older generation, things were much more civilised.
Instead of poring over comparison websites before making any financial decision, you would go to see your bank manager.
Much depended on their personal view of your fiscal responsibility, but they probably had a better handle on your ability to pay back a loan than any algorithm.
I’m old enough to remember such tailored financial services. We had an insurance agent, who used to visit annually to discuss home, car, life and travel policies, over lunch.
But as online services became more competitive, we opted to trawl websites for the cheapest deal and our broker was unable to compete. I now realise that the policies he offered had much better customer service, a more comprehensive and bespoke cover and were more likely to pay out fairly, so savings were probably moot.
Similarly, 30 years ago my bank manager knew each customer and their family. The data protection laws we have now would probably have frowned on her method of warning if I went over my overdraft limit, however. Nowadays you might get an automated text message, in the 1980s, faced with unreturned calls, she would phone my parents and ask them to pass on the unambiguous message that I was a “naughty monkey”. The shame forced me to deposit funds as soon as possible.
The phone-line security checks at the time consisted of branch staff recognising my voice. I yearn for such times when I’m trying to recall my “memorable” information to get through to a human.
The last 18 months have meant that – more than ever – computerised decisions are not fit for complicated financial situations.
Employment statuses have changed, with more people being self-employed, part-time or furloughed, meaning they need a more specialised financial product.
But walking into a bank was already difficult with high street closures, and during lockdown appointments were unavailable.
Finance is personal and many people avoid seeking advice for fear of being judged. But establishing a relationship with a financial advisor can make a significant difference in accessing the right products.
And surely anyone who doesn’t make you wait for 20 minutes of agonising music to ask a simple question is worth their weight in mortgage payments?
“The last 18 months have meant that – more than ever – computerised decisions are not fit for complicated financial situations”