The free money check-ups that can really pay off
First published 26 July 2016 • Updated 23 January 2017
Unbiased is partnering with Moneyhub to help you understand your finances better. Besides inviting you to try out the revolutionary Moneyhub way of organising your money, we’re offering a range of free financial health checks to help you spot the opportunities you may never have considered.
If you’ve never seen a financial adviser, or not for a while, then it may not be clear why you should. Unless you have a specific concern (such as ‘I’m moving house’ or ‘I want to draw my pension’), it may not occur to you to seek advice. Never mind the answers – you don’t even know what questions to ask.
That’s why many financial advisers offer a free initial meeting. This is a chance to discuss your current circumstances informally, so you can find out whether formal advice would be useful to you. If you don’t proceed to advice there’s no charge (but you may have learned some useful things nevertheless).
However, many advisers take the free initial meeting a step further. You can ask them to focus on a particular area of your money such as your mortgage, your pension, investments, or just your finances in general. Every adviser will have their own way of going about this, but in each case the end benefit will be similar: you come away with a much clearer picture of your situation and of the kind of action you may wish to take.
We surveyed a number of advisers listed on Unbiased to find out what their free financial healthchecks involved. Here is what you can expect.
Free mortgage review
These days it’s easy to go on a price comparison site to try and find yourself a better mortgage, but a mortgage review is quite different. As well as looking at your current mortgage deal, your mortgage adviser will look in detail at your other financial circumstances. This is because choosing the right mortgage means finding the one that fits the best with your other financial arrangements. A mortgage is your single biggest commitment in terms of money, so should not be viewed in isolation. Essentially an adviser will ‘measure you up’ to find the one that fits you best.
Having done this, an IFA or whole-of-market mortgage adviser can then search the entire marketplace for the best deals, including those not found on the high street or even on price comparison sites. As well as interest rates, they compare charges, penalties and other potential pros and cons for a proper all-round comparison. A mortgage review may also turn up unexpected savings. For example, when people remortgage by themselves they are often sold term insurance each time, and can end up with multiple unnecessary policies. Getting rid of these can deliver savings of up to £100 a month. In general, you should end up with a mortgage far more suited to your circumstances.
Free pension check
A pension check is helpful no matter what your time of life – whether you’re close to
retirement or still in the saving-up stages. However, to get maximum benefit you should try and arrange one at least 10 to 15 years before your intended retirement date. Regular check-ups every few years are also advisable, to ensure your plans remain on track.
As with a mortgage review, an IFA will assess your pension in the context of your finances as a whole. You need to ask yourself, ‘What is your pension for?’ – that is, what do you want to do in retirement? Only then can you tell whether your pension will be enough. So your adviser will assess your aspirations and your other finances as well as your pension pots.
Your IFA will project your likely income from pensions and other assets, and measure these against your retirement goals to see if they are realistic. If there is a mismatch, you may need to adjust one or the other. When considering ways to boost your retirement income, the adviser should assess your attitude to risk. You may find that you are able to take on more investment risk than your current pension fund offers, and so take the opportunity for higher growth. Conversely, you may discover that you are exposed to more risk than you’re comfortable with. The adviser can show you how you could tailor your pension to fit you better.
A pension check won’t offer formal advice about what you should do, but it will make you more aware of both your own needs and of the opportunities that are available. It’s also a great way just to engage with the issue of retirement in good time, rather than putting it off until the last moment.
Free investment healthcheck
If you hold investments, you’ll recognise the dilemma: part of you wants to be patient and
let them grow in their own time, while another part wonders if they’re growing as fast as they could. An investments healthcheck can put your mind at rest by assessing your portfolio objectively from an expert perspective.
As with a pension check, this is as much about finding out what you’re like yourself – including a similar assessment of your risk profile. Your adviser will then look at your existing investments to see if they are suitable from a risk perspective. They will also check how well those investments are aligned with your life goals (these two elements are closely related).
This check-up will also look at any fees or charges your current investments might attract, as you may find you are paying more than you need to. Your adviser will also be able to tell you whether formal advice could enable you to find more suitable investments (this would involve a full fact-find that goes beyond the scope of a free healthcheck). Consequently you will get a clear idea of whether or not advice could deliver value for money, and a much better understanding of what you’re doing.
Free financial healthcheck
If you’re not sure which aspect of your finances needs most attention, or indeed whether
you need advice at all, this type of check-up is the easiest way to find out. Your adviser will ask you to bring along all documents relating to their finances – savings, investments, mortgages, loans, insurance, pensions and so on – so that they can build up a complete picture of your affairs.
The meeting itself is typically focused on you as an individual, talking as much about your plans and lifestyle as about your money. This helps to build up a template for any possible future advice.
One thing that may surprise some people about these free financial check-ups: generally, advisers won’t talk to you about products at all. The process of choosing the right products comes later, after the adviser has built up an understanding of you as a person and your financial planning needs. Only then will they recommend products, if asked to do so – but what an IFA will never do is ‘sell’ you a product, because by definition they are not affiliated to any providers and earn no commission from them. Any recommendations they make are thus solely based on your best interests.
A free check-up from an IFA is a great way to learn more about financial advice. To find participating advisers, either head to our special offers page or search on unbiased.co.uk and look for the special offer badges.
Bringing all your finances together
The free financial healthchecks from Unbiased advisers all have one thing in common – they encourage you to think about your finances as one connected whole. This is one of the reasons that Unbiased is partnering with Moneyhub.
Moneyhub is a revolutionary digital service for managing your money. It lets you check your savings and investments, keep tabs on your mortgage and pensions, and track your income and spending – all in one place and in real time from a whole range of devices. Moneyhub updates all your accounts automatically, so you can clearly see what your money’s doing, where there’s room for improvement and when you might need financial advice. Best of all, certified bank-level security means your data is safe at all times.
To find out more, head over to our Moneyhub page.