Tips for choosing a Financial Advisor

Posted By, Neil Shillito

A good financial advisor will help you wade through the overwhelming choice of investment products on the market and help you to choose those best suited to your particular circumstances.

But how do you settle on the right person to guide you? And how do you know that they will be committed to you and focused on meeting your needs? Here are some tips to bear in mind when choosing someone to entrust with your financial affairs.

• Choose a financial advisor who is independent

Banks and building societies usually have “tied” financial advisors – that is, those who can only recommend products from the companies that they represent. By choosing an Independent Financial Advisor (IFA), you will not be restricted to the offerings of one particular organisation; an IFA is able to recommend the products that are most suitable for you, regardless of which company they come from.

• Choose a financial advisor who offers a full service

In order to give you the best possible service, an advisor needs to examine the whole of your financial affairs and take time to understand your requirements and aspirations.

They need to have an accurate idea of your current financial situation and what you hope to achieve by the products that you invest in. They also need to know your short term needs and your long term aspirations.

It is important to recognise that financial advice is not a one-off event, but an on-going process. Choose an advisor who will regularly review your financial affairs to see if your needs are being met and propose any changes that may be necessary to achieve your goals.

• Choose a financial advisor who has relevant experience

You are likely to get the best advice from someone who is experienced in dealing with people who are in a similar situation to you. Make sure that you choose someone who is used to giving advice to people from your background and outlook.

• Choose a financial advisor that other people are willing to recommend

Personal recommendation is the best advert for a good financial advisor. Ask for testimonials from satisfied clients who can vouch for the results they have achieved over a period of time, say five to ten years, from following the advice they have been given.

• Choose a financial advisor whose costs are transparent

Currently, UK financial advisors can be paid in two ways: by taking commission on the products that they sell or by a direct charge for their services.

Although it might appear at first glance that the first method is preferable, do not make the mistake of thinking that you are not paying for your advice: the commission is included in the ongoing administrative costs that are deducted from your fund or account.

Only when a financial advisor makes a separate charge for their services – as will become the law from 2013 – are they able to offer truly independent advice which will not be influenced by the variations in commission payable on different products.

Neil Shillito is co-founder and director of SG Wealth Management, a forward-thinking, FSA regulated company offering impartial, fee-based financial advice in Norwich, Norfolk.

Can High Interest Loans Improve Your Credit Score

Written by, Money Tips Staff

Bad credit is bad news for anyone. It’s a scarlet letter that keeps you from achieving the financial goals you want. With bad credit you’re basically eliminated from any sort of reasonable borrowing from a bank. In tough economic times when everyone moves toward austerity measures, this tendency only gets worse. It creates an unfortunate situation where those with bad credit who’ve learned their lessons are still unable to even get approved for an Android phone. That’s because in order to build a good credit score, you have to borrow, but in order to borrow, you have to have good credit.

Options are obviously incredibly limited. Yet those with bad credit are not totally incapable of mending their credit scores and building themselves up to a more acceptable level of borrower. In fact those with bad credit can improve their credit by taking advantage of an otherwise avoidable source of borrowing: high interest loans.

You can’t drive through a seedy part of town without seeing bright neon lights designed to lure people into payday loan businesses. It’s predatory lenders like these that you need to turn the tables on.

Payday loan providers and title loan lenders thrive on those with little to no credit. The interest that can be activated on such loans after a certain period of time is staggering: over 400% in some states. But you won’t be borrowing money from these people to spend it. You’ll be borrowing money with the intention of paying it back almost immediately.

Most payday loan and title loan lenders give first-time customers a month or two before the audacious interest is tacked on. It’s a lure that works to trick unsuspecting borrowers into paying back hundreds and even thousands more than they took out, since rarely do they pay the loan back in the one-to-two months before the high interest kicks in.

Deposit the loan in the bank, then turn around and pay it back with the loan money itself. Try and make as many payments as possible before the high interest kicks in, as the more payments you make on a loan the more it affects your credit score.

Do this enough times and you’ll start to see some serious improvements to your credit score. What’s great is that there are probably enough payday loan lenders in your area to repeat this process several times while taking advantage of their first-time customer no-interest offers.

It’s a little crooked in concept, but it’s not like you’ll be exploiting orphans or something. You’ll be taking advantage of an industry that makes hundreds of millions of dollars every year by ripping off people in similar situations as your own.

It’s not only practical, it’s poetic.

Dealing with Debt Collectors

Posted by Troy Fix

During troubled economic times, more consumers find themselves struggling with debt. This can lead to issues including personal bankruptcy, job loss, marriage problems and invasion of privacy.

The last thing you need to worry about when you’re faced with unpaid bills is dealing with debt collectors. That’s why both parties of Congress worked together in creating the Fair Debt Collection Practices Act, which spells out what a debt collector absolutely cannot do:

1. Call you earlier than 8am, later than 9pm, or anytime which you’ve told them is inconvenient for a call.
2. Tell your family, friends or neighbors that you owe a debt.
3. Phone you at your job after being told you can’t accept their calls at work.
4. Use language that’s abusive, profane or harassing.
5. Engage in any kind of harassment, oppression or abuse.
6. “Misrepresent” or shade the truth regarding how much you owe, what they might do to collect the debt, or anything else.
7. Threaten you with criminal prosecution or arrest.
8. Give the credit bureaus any kind of false information about you.
9. Make your phone ring any “unreasonable” number of times.

What You Can Do

Frequently consumers don’t realize that a debt collector who violates the Fair Debt Collection Practices Act can face serious consequences. Since keeping track of any violation makes it easier to seek redress, be sure to document every contact you have with debt collectors.

Keep a call log that records

• Times & dates of their phone calls
• The collectors’ name/s and number/s
• Brief highlights of the conversation

In some states, you can record actual phone calls without the other party’s consent.

Other Steps To Follow

Even if you cannot record the phone call, there are other steps you should take upon hearing from a debt collector.

Decide whether the debt is correct or an error on their part. If you disagree that you owe this debt and refuse to pay, send a letter stating that to the collector.

Provide a written dispute of the debt. Even if you’ve already received their letter advising you to seek validation of your debt within 30 days, you can still dispute the debt in writing after more than 30 days. This will require the creditor to note your dispute if they report the debt to any credit agency.

Send a “cease and desist all communications” letter. This will keep the collector from repeatedly contacting you.

Protecting Your Rights

Whether it’s related to a mortgage, a vehicle loan, a credit card or anything else, make a point of knowing your rights when faced with debt collection. Companies that protect consumer rights can provide you with handy information and, in some cases, legal assistance as well.

Talk to a consumer rights protection expert and be sure you understand your rights and your choices. Debt can be stressful, but taking steps to protect yourself can provide relief.