Menu X

 

Hi everyone! 
 
Welcome to the September edition of our newsletter which focuses on the compelling reasons why contractors and SME owners should consider using a mortgage broker and on whether a DIY approach or paying for advice for financial planning is best for your circumstances.
 

 

Why Should Contractors use a Mortgage Broker?

As a contractor you may find securing a good mortgage or remortgage deal somewhat more problematic than that of someone who is employed fulltime for a single company and who has a more regular income stream.

Certain mortgage providers can often fail to take into account your full potential earnings due to having a more staggered remuneration process. This can affect how much a mortgage provider is willing to lend to you and the interest rate offered.

A mortgage broker can help contractors secure more suitable mortgages or remortgage. They are professionals who helps borrowers find and compare mortgage products from different lenders. A mortgage broker can also assist with the application process and negotiate better terms and rates for the borrower.

Using a mortgage broker can have many advantages, especially if you are looking for a mortgage that suits your unique personal and financial circumstances. In this blog post, we will discuss some of the key reasons why you should use a mortgage broker in the UK.

Save time and hassle. Finding a mortgage can be a time-consuming and stressful process. You have to do a lot of research, compare different options, fill out paperwork, and deal with lenders. A mortgage broker can do all of this for you, saving you time and hassle. They can also speed up the approval process by dealing with the lender directly and resolving any issues that may arise .
Access more options. A mortgage broker can usually access a wider range of lenders and products than you can by yourself. They can also find lenders who specialise in mortgages for contractors, self-employed, bad credit, or other niche situations . This means you have more chances of finding a mortgage that meets your needs and preferences.
Get a better deal. A mortgage broker can help you get a better deal on your mortgage by using their expertise and relationships with lenders. They can negotiate lower interest rates, fees, and charges for you, as well as advise you on the best type of mortgage for your needs and goals . This can save you money in the long run and help you achieve your financial objectives.
Receive tailored advice. A mortgage broker can provide you with tailored advice and guidance based on your individual circumstances. They can help you with issues such as credit history, affordability, deposit sise, contract length, and future plans . They can also answer any questions you may have and explain the pros and cons of different options.
Enjoy ongoing support. A mortgage broker can also offer you ongoing support and service throughout the lifetime of your mortgage. They can help you with any changes or queries that may arise, such as remortgaging, switching lenders, or making overpayments . They can also keep you updated on the latest market trends and opportunities.

As you can see, using a mortgage broker in the UK can have many advantages for finding and securing a mortgage that works for you. However, it is important to remember that not all brokers are the same, and you should always compare different brokers before choosing one. You should also check their qualifications, fees, reputation, and customer reviews to ensure they are trustworthy and reliable.

Here at Danbro financial Planning all of our mortgage advisers are fully qualified and independent, which means that we can access the whole of the market instead of being tied into only a few lenders. Furthermore, we work with contractors, freelancers and the self-employed every day and so we understand the market.

If you would like to discuss your mortgage or remortgage needs feel free to book in a free meeting where we can go through the options available to you.

Book a Call

Please note: Please note: Your home maybe repossessed if you do not keep up repayments on your mortgage or other loans secured on it.

DIY Financial Planning or Paying for Advice: Which is Better?

If you are looking to invest some money, start a pension plan or take out some protection insurance, you may be wondering whether you should do it yourself or use a Financial Advisor to help you. Both options have advantages and disadvantages, and the best choice for you may depend on your personal situation, goals, knowledge and budget. This article will explore the pros and cons of each option, and may help you decide which one suits you better.

What is DIY Financial Planning?

DIY financial planning is when you manage your own money and make your own decisions about how you invest it. You do your own research, choose your own investments and financial products, monitor your own performance and adjust your own strategy as required.

Some of the benefits of DIY financial planning are:

• You have day to day control over your money and can choose investments that match your risk appetite, objectives and values.
• You avoid paying fees to advisors or brokers, which can reduce your returns over time.
• You learn more about finance and investing, which can help you improve your skills and confidence.

Some of the drawbacks of DIY financial planning are:

• You need to spend more time and effort on managing your money, which can be stressful and time-consuming.
• You need to have sufficient financial knowledge and skills to make informed decisions, or else you may make mistakes that could cost you more money and time than it might have done with an adviser on your team.
• You may miss out on some opportunities or benefits that professional advisors can offer, such as access to exclusive products, lower investing charges, tax-efficient strategies or ongoing support.

Paying for Professional Financial Advice?

This option is for when you hire a professional Financial Advisor to help you with your money and investment decisions. They are able to provide you with different levels of service, such as one-off advice, ongoing advice or execution-only service, among others.

Some of the benefits of paying for advice are:

• You get expert guidance from someone who has the qualifications, experience and knowledge to help you with your money matters.
• You should receive a tailored plan that suits your specific needs, goals and circumstances, and that takes into account factors such as tax, inflation and market conditions.
• You get ongoing support and feedback from someone who can monitor your progress, review your performance and make adjustments as needed.
• The costs of advice can often be well worth paying. According to Vanguards “Adviser Alpha” studies, using an adviser can amount to around 3% per annum additional investment return over time, source Vanguard Adviser Alpha study June 2020.

Some of the drawbacks of paying for advice are:

• You have to pay fees for the services you use, these can vary depending on the type of service, the amount of money involved and the complexity of the situation.
• You have to trust someone else with your money and be comfortable with their recommendations, which may not always align with your preferences or expectations.
• You may lose some control over your money and have less involvement in the investing process.

Which is Better?

There is no definitive answer to which option is better, as it depends on your personal situation and preferences. However, some factors that may help you decide are:

• How much money do you have to invest? If you have a large amount of money, you may benefit from professional advice that can help you diversify your portfolio, reduce your risk and optimise your returns. If you have a small amount of money, you may prefer DIY investing that can save you fees and give you more flexibility.
• How confident are you in your financial knowledge and skills? If you have a good understanding of finance and investing, you may enjoy DIY investing that can challenge you and reward you. If you have little or no financial knowledge, you may benefit from professional advice that can educate you and guide you.
• How complex are your financial goals and circumstances? If you have simple and straightforward financial goals you may be able to achieve them with DIY investing that can suit your needs. If you have complex and specific financial goals, such as retiring early or leaving a legacy, you may benefit from professional advice that can help you plan ahead and achieve them.
• How much time and effort are you willing to spend on managing your money? If you have a lot of time and interest in managing your money, you may enjoy DIY investing that can keep you engaged and involved. If you have little or no time or interest in managing your money, you may benefit from professional advice that can save you time and hassle.

Summary

DIY financial planning and paying for advice are both viable options for investing your money, but they have different pros and cons. The best option for you may depend on your personal situation, goals, knowledge and budget. You may also use a combination of both options, depending on your needs.

While DIY financial planning can give you more control, flexibility and satisfaction, it also requires more time, effort and responsibility and can be equally frustrating. Paying for advice can provide you with expert guidance, a tailored plan and ongoing support.

However, if you are unsure about your financial situation or goals, or if you have specific needs that you are not comfortable addressing yourself, you may find that paying for advice can be better than DIY financial planning.

Professional advisors can help you navigate the often confusing and challenging world of finance and investing, and offer you specialist advice on how to manage your money. They can also help you form a plan and ensure that you stick to it, which can make a big difference in achieving your financial goals. Paying for advice can be seen as an investment in your future, rather than an expense in the present.

If you would like to speak with a qualified, independent financial adviser to assess your options, please arrange your free discussion below.

Retirement Survey Report

Danbro financial Planning has recently conducted a retirement survey of our clients and the wider business world. The survey was designed with a number of key questions to begin to ascertain how contractors and SME owners felt about retirement, how prepared they were for it and when they believed they would retire.

Some of the key findings are:

What age would you like to retire at?

78% of respondents would like to retire before the current state pension age of 66.  This shows an aspiration to be able to save enough through additional contributions to a pension in order to access it prior to being able to access the state pension.

When would you like to retire?
 

What age do you think you will retire at?

However, 40% believe that they will be required to work beyond the age of retirement (66) due to a lack of confidence in being able to save enough to enable them to retire when they want on an income they feel is suitable.

When will you retire?
 
Do you know how much is in your pension pot(s)?
 
40% of respondents are unaware of how much they have in their retirement plan(s) and 46% do not know their estimated annual income from their pension(s).
 
How much in your pension pot?
 
Do you feel you have saved enough to retire comfortably?
 
Almost half of respondents, 47%, feel that they have not saved enough to be able to retire comfortably.
 
Have you saved enough for retirement?
 
How much annual income would you like from your pension?
 
76% of respondents would like an annual income of more than £21,000 from their pension(s). The average retirement income in the UK is currently £18,772, so the majority do want to exceed the average by some margin.
 
What Income From Your Pension Would You Like?
The above findings paint an interesting picture in that the majority of contractors and SME business owners want to retire early, many are under no illusion that this will be the case.  In fact 40% understand that they may be required to work beyond their ideal retirement age.
There is also an apparent lack of understanding regarding what the value of the pension(s) are for a significant number of respondents with 40% being unaware of the actual value of their pension(s).
 
There is a clear trend that many of the respondents simply do not have the full information in regards to where they are in their retirement journey.  This is worrying as if you do not know where you currently are, how can you then work towards where you wish to be.
 
Conclusion:
 
It seems that for many contractors and SME owners, there is a disparity between what they would like to happen in regards to their retirement and what they feel will happen.  This disparity can be attributed in some way to a lack of knowledge surrounding their current retirement position.
 

Get in touch with us today and see how we can help you and your family now.

Book a Call

 
Blog written by
liam-winstanley
Liam Winstanley
Director & Independent Financial Advisor at Danbro Financial Planning | Website

Liam Winstanley is a Chartered Financial Planner and Independent Financial Advisor. He has worked in financial services for well over two decades, specialising in wealth management and financial planning including things like pensions, investments, retirement planning, financial protection and estate plans.

Liam is the Director of Danbro Financial Planning and is passionate about delivering the very highest standards in service, ethics and professionalism within the financial sector.

Away from Danbro, Liam is an avid long-distance runner and also turns out for his local cricket side, Brinscall CC. He lives in Lancashire with his wife and son.

 

Important Information

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate tax advice.

Danbro Financial Planning Limited is an appointed representative of the Sense Network Limited, which is authorised and regulated by the Financial Conduct Authority. Danbro Financial Planning Limited is entered on the FS Register (www.fca.org.uk/register) under reference 796167. The information contained within this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services business aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.

Company number 11009261 registered in England. Danbro Financial Planning Limited Registered office address: Jubilee House, East Beach, Lytham St. Annes, United Kingdom, FY8 5FT.