Who uses a financial advisor?

NVP said:
@Theophany I had a call with a Mortgage advisor today to discuss a new move for me and my family. As I haven’t worked (voluntarily) the past 11 months, and my wife is technically unemployed (after her maternity finished earlier this year) but has a couple of firm job offers for part time back on the NHS, consolidated with the fact underwriters are apparently no longer taking rental income into account... they said they could lend me 3k :D


This has put a stopper in our plans and has given me thought I wish to discuss with someone. My quandary:

Do I sell some rental properties now to purchase the house mortgage free? Or is it still better to keep the rental income and I pick up a permie job to facilitate a mortgage? I'm currently working on setting up my own business so my preference is to not tie myself down with office work, perhaps we don't move yet. I don’t know.
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I'd take the 3k and go full Mike Brewer come Phil Spencer, trading your way up from a yurt all the way to a mansion. ;)

Unless you can provide evidence of capital available to ultimately repay a mortgage, most lenders will take a risk averse approach as eligibility is now based on affordability rather than earnings. So even if you did pick up a permanent job today, it won't necessarily be a silver bullet. The downside to being self-employed though is that most lenders will want at least three years worth of accounts to see how profitable your business has been.

To my mind, selling some of the rental properties might allow you to buy mortgage free today, but it's going to deprive you of income in the interim. So whilst you wouldn't have to make mortgage payments, you're going to be down on income. I'd be asking myself if it's possible to sell properties to the nearest penny where the loss in rental income meets but doesn't exceed the monthly repayments you'd be making on a mortgage. Otherwise, if it's not desperate to move stay where I was.
 
Theophany said:
I'd take the 3k and go full Mike Brewer come Phil Spencer, trading your way up from a yurt all the way to a mansion. ;)

Unless you can provide evidence of capital available to ultimately repay a mortgage, most lenders will take a risk averse approach as eligibility is now based on affordability rather than earnings. So even if you did pick up a permanent job today, it won't necessarily be a silver bullet. The downside to being self-employed though is that most lenders will want at least three years worth of accounts to see how profitable your business has been.

To my mind, selling some of the rental properties might allow you to buy mortgage free today, but it's going to deprive you of income in the interim. So whilst you wouldn't have to make mortgage payments, you're going to be down on income. I'd be asking myself if it's possible to sell properties to the nearest penny where the loss in rental income meets but doesn't exceed the monthly repayments you'd be making on a mortgage. Otherwise, if it's not desperate to move stay where I was.
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Thank you Theo, very much appreciated. I'll have to get out my spreadsheets but I have 2 to mind which, iirc, sum close to the amount.

It is not a desperate move, it was more taking the chance to uproot and start fresh considering both myself and wife are on breaks in our careers and my children are still yet to start school.

I think I'm more willing now to stay put a little while longer, but then my wife showed me more places in Canada this morning which is a hard urge to fight.

Thanks @Theophany this helped :)
 
@NVP Canada wouldn't be a bad choice considering the way UK is going =/ I'm looking to possibly move back home to Sweden, even though I don't really want it, but financially it could be a better option than staying in UK post Brexit... Tricky situation.
 
Garp said:
I have a financial advisor that I meet with quarterly. They've helped me out in a few ways. I live in the US so this is slightly different from how things are in the UK:
  1. Helped ensure we maximise usage of tax free / deferred funds, like IRAs.
  2. Helped ensure we've got solid life insurance coverage so that should the worst happen and I'm either injured or killed, my wife and kids aren't going to be struggling and have no risk of eviction. The life insurance is a hybrid one that also includes long term elderly care insurance. It should give us a nice nest egg to cover the cost of care homes, or other forms of additional in-house assistance should my wife and I ever need it once we're retired. He's really helped shake up some foolish notions we had of how well sorted out we were for worst case scenarios.
  3. Organised tax free college funds for the kids. Both kids should get a nice nest egg towards university education should they choose to do that, or a slightly smaller nest egg should they opt not to go in to education (if it's used for non-college expenses they'll have to pay taxes on it.)
  4. Sorted out the retirement plan. It changes from quarter to quarter depending on how investments have gone, but I can see precisely when I'm due to retire (little more than a decade to go, should be retiring in my early 50s, and I'm just on the cusp of 40 now). I had a nice pay rise since we last met. I'm curious to see what happens once we account for that.
  5. Usual Hedge fund type stuff, he helps advise on the portfolio balance, re-organises from time to time. We've some rules about the types of companies we're willing to invest in, usually encompassed by the "ethical" branding on funds, but he's done a lot of research to ensure that we're lined up well for that. We fairly well spread among a number of funds and he keeps a careful eye on underperforming ones. He's also presented some interesting one-off "experimental" investment opportunities, like a Real Estate Investment Trust we bought in to a couple of years ago that focusses on Warehouses. It's a pretty safe market with the increasing growth of e-commerce, and all these self-storage places. It was done as a one-time buy-in, and we've got it just trickling money back in to itself. My wife and I were doing vanguard to some degree, and were great at saving up our money, but absolutely lousy at making it work for us.
  6. Free negotiation services. He loves a good haggle. My wife and I hate haggling. He's haggled down prices on car purchases and other bigger ticket items for us, helped advise on reasonable prices for work around the house and evaluate bids we've had. I'm not certain, but I think he may have saved us as much as we've ever paid him, just via this work alone.
On top of that, there's just the simple value in not having to worry about any of this stuff any more. He advises, we research, and we either go with what he suggests or choose not to. We pay a simple and reasonable annual fee, and he takes a load off our mind.

edit: Oh, one thing we don't do, is any tricks to minimise our tax burden, outside of the standard tax options. There are a lot of perfectly legal tricks we could use to reduce our tax burden further, and he can advise us on a number of them, however we've got this crazy idea about social responsibility. Go figure.
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Sounds great - particularly your age on point 4.

#6 did make me chuckle, not pretending I'm any good at it of course :)
 
NVP said:
Thank you Theo, very much appreciated. I'll have to get out my spreadsheets but I have 2 to mind which, iirc, sum close to the amount.

It is not a desperate move, it was more taking the chance to uproot and start fresh considering both myself and wife are on breaks in our careers and my children are still yet to start school.

I think I'm more willing now to stay put a little while longer, but then my wife showed me more places in Canada this morning which is a hard urge to fight.

Thanks @Theophany this helped :)
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No sweat, glad it was useful. :)
 
tlrBeta said:
Sounds great - particularly your age on point 4.

#6 did make me chuckle, not pretending I'm any good at it of course :)
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Honestly, I wish I'd seen one sooner. I should never have put this off as long as I did. Learned a lot, grew a lot, made better financial decisions.
 
An IFA found me a few years ago. Cold call so I was initially very suspicious (I know all the horror stories about pension funds getting transferred into inappropriate assets and promptly becoming untraceable) but did my own due diligence on them and everything looked right so I let them sort out my retirement plan. It's come through this year's turmoil relatively unscathed so I think I made the right choice. As others have said though, an IFA is unlikely to offer advice on shares, but may offer advice on fund managers. They may also set their fees based on the size of the investment (bigger is better) so going to an IFA with a few K may well cost you.
 
I'm using one currently, for pension reasons. As it concerns an old DB pension I have, by law I need an IFA to look at it and agree to any transfers I want to make.
 
neviditelny said:
@NVP Canada wouldn't be a bad choice considering the way UK is going =/ I'm looking to possibly move back home to Sweden, even though I don't really want it, but financially it could be a better option than staying in UK post Brexit... Tricky situation.
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Sorry mate, missed this one.
Yes definitely, although it's not the leaving of the EU which is the main issue as I'm relatively positive about that in the long term. It is the decline in social order and safety, the attraction of crime and gangs for children, the severe decline in funding of our infrastructure and most of all the weather :D which is making emigrating extremely palatable.
 
Berserker said:
An IFA found me a few years ago. Cold call so I was initially very suspicious (I know all the horror stories about pension funds getting transferred into inappropriate assets and promptly becoming untraceable) but did my own due diligence on them and everything looked right so I let them sort out my retirement plan. It's come through this year's turmoil relatively unscathed so I think I made the right choice. As others have said though, an IFA is unlikely to offer advice on shares, but may offer advice on fund managers. They may also set their fees based on the size of the investment (bigger is better) so going to an IFA with a few K may well cost you.
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Whist I'm glad it appears to have worked out ok for you, this should have been reported to the FCA immediately.

Cold Calling was banned on 9th Jan 2019 and fines of up to £500k.

No proper IFA would cold call clients in this day and age.

I'm lucky that any new clients I take on come from personal referrals from my existing clients,
 
booyaka said:
Whist I'm glad it appears to have worked out ok for you, this should have been reported to the FCA immediately.

Cold Calling was banned on 9th Jan 2019 and fines of up to £500k.

No proper IFA would cold call clients in this day and age.

I'm lucky that any new clients I take on come from personal referrals from my existing clients,
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"A few years ago" suggests it was pre 9th Jan 2019.
 
booyaka said:
Whist I'm glad it appears to have worked out ok for you, this should have been reported to the FCA immediately.

Cold Calling was banned on 9th Jan 2019 and fines of up to £500k.

No proper IFA would cold call clients in this day and age.

I'm lucky that any new clients I take on come from personal referrals from my existing clients,
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What’s your favourite fund?
 
coolsurfer said:
What’s your favourite fund?
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Not dodging your question but I don't have a favourite fund. I have to also separate my own personal investment choices, for my SIPP/ISA (usually higher risk) from those I use professionally with my clients. (majority are middle of the road/medium risk)

I have various funds that I use for clients based on their own particular appetite for risk - However these are regularly reviewed to ensure they are hitting the benchmarks I look for. Also then are they looking for growth or income or a combination of both.

I prefer, but not 100%, lower cost funds and have no issue with passives or active funds. Passives are a great low cost way of starting an investment/pension.

To name but a few -

Vanguard LifeStrategy 60% Equity A Acc
Baillie Gifford Managed B Acc
Royal London Sustainable World Trust C Acc
Royal London Sustainable Diversified Trust C Inc
Architas MA Passive Progressive S Acc
L&G Multi-Index 7 I Acc
Royal London Governed Portfolios for low cost pension investment
VanEck Vectors Video Gaming and eSports UCITS ETF (for me - not my clients)

None of these form any part of a recommendation or constitute advice, they are merely for information purposes only. Past performance is not a guide to the future. You should do your own research before investing.
 
I have a wealth manager who helps me ensure I'm getting the best out of my portfolio (property, investments, pensions, savings etc,..). It's been really useful to help me plan for retirement and appreciate my existing situation and what I can do to change it and how it impacts me long term. I just don't have time to spend doing it myself.
 
It's funny how these things turn out - the OP seemingly wanted to talk about stockbrokers but apparently didn't know what a stockbroker was so called them financial advisors in the thread title and now the thread is all about IFAs... :)
 
We used a mortgage advisor when purchasing our first home. I feel that our return on his fee was excellent as
he secured a better value mortgage, sold us moving insurance (for £1!) which we used to claim ~£1000 back following a failed move and helped maximise the benefit of a gifted deposit (we purchased from a relative).
 
booyaka said:
I'm lucky that any new clients I take on come from personal referrals from my existing clients,
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My IFA seems to get the vast majority of his business through personal recommendations. Glad I took a chance on it several years ago because I'd be in a far more disorganised state right now otherwise.
 
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