The world we live in is increasingly on-demand and technology has made it possible for us as consumers to easily get what we need from multiple sources. Personal finance advice and products are no different. But is that the best way to make important financial decisions about your future specified to your needs?
When it comes to entertainment, the world is no longer linear. The very idea of having to plan a night’s television viewing, for example, is preposterous. TV shows, film and music is now just a download away, allowing us to build our viewing and listening experiences into the demands of modern life.
Our online environment has made ownership of our personal finance environment similarly accessible. At the stroke of a key or click of a mouse, we can compare hundreds if not thousands of different personal finance products, from loans and credit cards to mortgages and insurance.
And while that’s obviously very convenient, does it actually serve our best interests? If we visit a mortgage comparison website, we can see the interest rate and the repayment amount – but do we understand what that means in the context of our own lives?
Some of us are savvy enough to be able to look at a range of mortgage products and take a step back to consider how our lives might change as the years pass, making decisions about our borrowing accordingly.
Some people will be able to look at economic trends or industry patterns and make calculated decisions about their long-term employment prospects, and that will help them to make key decisions about the level of income protection they might need.
Many people will know there’s a difference between standard buildings and contents insurance and the property insurance they might need if they rent out their property.
Similarly, there are lots of people who can look at their family medical history and draw pragmatic conclusions about their own long-term health and the advantages of having health insurance in place.
But does everyone possess this ability? Is everyone able to take a long pace back and look at their financial options in the context of their own lives? More importantly, do you have the knowledge and objectivity to do that – and to get it right?
Part of the problem with living in an on-demand world is that price becomes the key to everything.
Type ‘health insurance’ into Google and at the top of the results page that comes back will be a load of adverts from price comparison sites. And that’s the problem – price comparison sites are not detailed enough. They don’t know you and they can’t tailor the product to you.
All they can do is present you with a list of products, starting with the cheapest. And that isn’t the same as presenting you with the best, even if the price is likely to be a factor in your decision.
The same is true of any similar search around mortgages, property insurance, or income replacement cover. The online market is geared to giving you choices that are defined by cost first and benefit second.
That carries an obvious risk: that in choosing the cheapest product available, you’ll be buying a product that doesn’t actually offer you the cover or benefit you expected it would. And if that happens, the chances are you’ll find out when it’s too late.
There are all sorts of products that are directly available online or promoted as part of a price comparison service that could be said to be a relatively low risk: car insurance, pet insurance and appliance cover are three that spring easily to mind.
That’s not to say choosing the wrong cover in those cases isn’t costly. On the contrary, in fact – an error can be painfully expensive.
But borrowing hundreds of thousands of pounds to buy a property, insuring its value or being able to pay your bills and keep your home in the event of being unable to work is a step up from those kinds of annual policies where relatively small – or at least well-defined – sums of money might be involved.
That’s why asking advice from a professional adviser is always a good idea. A professional mortgage or insurance provider will be able to offer you advice ‘in the round’ – in other words, advice that’s informed by your complete financial circumstances.
He or she will recommend policies or options that will give you the peace of mind and certainty you need, without jeopardising your financial security or your ability to meet your financial obligations.
Taking decisions in isolation by yourself is a right and privilege that comes with digital empowerment. It has many positive things to commend it. But it can also be a dangerous environment that can have a serious impact on your future security.
No reputable adviser will charge you for an initial chat, so you have nothing to lose by calling a professional individual or business you trust and fin ding out how they can help.
If you’d like to talk about your own circumstances and needs, we’re listening.
Want to find out about your mortgage options? Take a look at our short guide to remortgaging.
To find out more about our friendly and professional mortgage service, fees and what we can do to help make sure you’re not paying over the odds for your mortgage, why not visit www.oportfolio.co.uk or give us a call on 020 7371 5063.
Oportfolio Limited is an appointed representative of Primis Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority
Your property may be repossessed if you do not keep up repayments on your mortgage.
Oportfolio Ltd fees are payable on application. We charge a broker fee for property purchases of £495 and a remortgage/further advance fee of £395. Our product transfer fee is £295.