As a Financial Adviser engaging with clients about their financial well being I am often surprised by how little they understand about the borrowing commitments. I ask a simple question, which is, “tell me a little about your existing home mortgage”
In many instances I find that clients have taken for granted how much they owe, are not sure if their interest rate is fixed and if it is they don’t know when the interest rate rolls over. Believe it or not sometimes they can’t even tell me what their loan repayments are.
For most of us our home mortgage is the single biggest commitment we enter into in our life time and I ask myself, “why is it that we actively shop to get a better deal on things like home power and insurance but we ignore the one thing that has the opportunity to make the single biggest difference in our lives”
Interestingly when I talk to someone about a new mortgage they will frequently say to me “they want the best deal” but once negotiated from that day forward the impact of the cost of the mortgage is frequently forgotten. Why is that?
Well firstly buying a home is an emotional event. People focus on whether or not they can obtain finance and relieved when they obtain a loan approval they forget to ask the one pertinent question of themselves. Does what I have been offered suit my circumstance?
Now, I think we can be forgiven for not being more assertive in the past. After all there wasn’t a lot of choice, but those days have gone. The advent of the Financial Adviser brings a new dynamic to the table. Not only does a Financial Adviser bring choice but like never before his or her role is to help consumers make much better informed decisions about what suits them best. The role of the Financial Adviser in part is to challenge the mindset so that better decisions are made.
The simple reality is that Banks’ are not created equal and someone who relies solely on their own Bank to provide advice is only getting one opinion based on that Bank’s policies and procedures. That’s not choice.
The time to talk to a Financial Adviser is right at the start of the buying process. As a consumer if you don’t do that you will not even know if you are looking in the right market.
As a sales consultant if you do not include finance early in your sales process you likewise fail to provide your customers with the best opportunity.
Likewise we should prudently review the structure of what we have on a regular basis, at least every couple of years. That in part is because even good decisions are based on assumptions and circumstances change over time.
In a nut shell that is why Pivotal exists. Pivotal Advisers are here to help Sales Consultants and their customers make better informed choices and to help make sure all options have been explored. Worth thinking about isn’t it?