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Save yourself money or enhance policy benefits!!!
We mentioned it before in an April blog and we believe very strongly about it so we are mentioning it again.
REVIEW, REVIEW, REVIEW!!
Reviewing various financial products and policies you own can lead to a saving in valuable euros. In some cases it might lead to enhanced benefits for the same cost but most of all after carrying out a review you will go away fully understanding what you have and how you and your family will benefit from it.
Whether by design or not, some products have names which could in the eyes of the customer, be readily termed as misleading. For example one could be forgiven for assuming that a whole of life policy covered you, based on current premiums, for the whole of your life. Unfortunately, in many situations this is not the case.
3 key ingredients for making sure that the product you have is right for you are;
1. Expertise – deal with a QFA who is truly independent and one that you can trust to build a long term relationship with.
2. Transparency for all parties – in terms of charges but also in terms of product knowledge. What a customer purchases should be exactly what the customer thought they purchased.
3. Alignment of goals – client and advisor working together with a common goal without a conflict of interest.
Products are changing constantly, customer’s needs and circumstances are changing constantly and the financial services industry is changing constantly. Therefore what you took out some years back might have been the right product at the right price then but today you might be able to achieve better terms.
Review the financial products that you have to make sure that none of the following usual suspects are lurking:
· Mortgage repayment protection policies – these policies are meant to safe-guard loan repayments if a borrower loses their job or is unable to work due to illness. This cover can be expensive and there have been very mixed experiences when people have tried to make a claim. Very much a bank product and usually sold as part of the mortgage. In Britain lenders are not allowed to sell these products at the same time as the loan is been agreed to allow people more time to shop around.
· Bid offer charges – A bid offer charge is usually 5% and it means that although your product may have stated a 100% allocation rate, only 95% of your money was invested on your behalf. Many older pension contracts would have this charge while newer ones may not.
· Older products – this is really the be all and end all of why someone should have a financial check up. What was good and competitive in days gone by might not be the case not. Open the old files gather the information and make an appointment.
· Unit linked whole of life products – Even saying it is hard never mind getting an explanation on what it means. It can be sold as a low cost whole of life policy which would be a good thing but in reality the policy is dependent on too many factors to remain “low cost”. How it works is this. Your premiums are paid into an investment fund, with the idea that as you get older and the cost of your cover increases, the future investment gains pay for your protection benefits. What happens when markets fall and to the scale that we have witnessed over the last 18 months? Well the client is hit with an unexpected jump in premium or reduction in benefits which is not good if the purpose of the policy was to cover a mortgage. If you need a protection plan that should last for 20 years or more you are better off with a term product, where you know what you will pay over the period chosen.
· Non disclosure of commission – on some products like company pensions there is no obligation by the intermediary to disclose the commissions being earned. To be on the safe side and so that it will never become an issue into the future, ask for voluntary disclosure. If you don’t get it, it might be something you need to think about.
· Lack of review/update – As mentioned earlier in this article, our financial circumstances are always changing, it only makes sense to review your affairs regularly.
Call us to arrange a review of your financial well being today 0719159222.