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 Should I Use An Independent Financial Advisor 
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Post Should I Use An Independent Financial Advisor
by: Michael Sterios

In recent times, Independent Financial Advisors (IFAs) have been used by many people as an alternative to mortgage brokers. The main reason for this is that there is a crossover between the services they offer.

IFAs and mortgage brokers usually receive their qualifications from the same few training institutions. These institutions include the IFS School of Finance and the Chartered Insurance Institute (CII). When a person receives their qualification as either a mortgage broker or financial advisor they only need to complete a reduced number of exams to receive the other qualification. This is one indication that mortgage advisors and IFAs undertake similar activities.

Because mortgage repayment costs account for the largest expense in a normal household, having the right product is seen as a necessary element to prudent financial planning. It is for this reason, more than anything else, that people have been turning to their financial advisor to source the right mortgage deal for their needs.

Many IFAs will have completed the qualifications and training necessary to become a mortgage broker and will be able to assist their clients in obtaining a home loan with ease. IFAs have access to the same software as mortgage brokers that can scan the entire UK mortgage market to ensure their clients receive impartial advice on their home loans.

Mortgage expenses are one of the most important factors to consider for a household budget. An IFA will be able to offer advice regarding whether to fix your interest rate in order to stabilize your budget or apply for a mortgage with a variable rate that may reduce over time. An IFA will also be able to help you prepare a financial plan taking into account your mortgage expenses throughout the term of the loan.

Mortgages are also interlinked with insurance. Interest only products will usually require some sort of insurance to cover the event of the mortgagor being unable to meet their obligations due to accident, sickness, or unemployment.

IFAs have an in-depth understanding of the insurance market and can therefore offer advice in such matters when a client applies for a mortgage with them. Many mortgage brokers also offer insurance products to their clients as an additional service which demonstrated the crossover from the mortgage broker’s point of view.

Even if your IFA does not offer a mortgage broking service, it is likely that they will be able to refer you to someone who they regularly put their clients’ business through. However they quite often do offer both services so if you already have an IFA and are looking for mortgage advice, it may not be necessary to seek out the services of a separate mortgage broker.

You may therefore decide to apply for your next mortgage through your existing IFA and keep all your financial affairs with the same entity. Alternatively, if you do decide to engage the services of a separate mortgage broker, you should ask your IFA for recommendations. That way, you may be able to co-ordinate your financial activities with both parties.

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Sun Dec 14, 2008 10:55 am
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