Financial Advisors

JJmcClure

Afternoon all

Who on here has used a financial advisor? What's the deal? Are they free, or how much would I expect to pay? Is it one session thing?

I am this week receiving money owed as a result of my ex partner buying me out of our flat

I have a loan I'm keen to pay off and a niggly overdraft as well. Afterwards, I'll have about £11,000 which I intend to use to buy a new flat with in the next year, when prices come down - I'll spend the next few months saving to boost that figure as well.

I have an ISA with £1,000 in it already, and I'm wondering what to do with the rest of the money until I am ready to buy

Is it worth me getting a financial advisor for this or keep looking in this forum?

All help greatly appreciated

Lokolo

Not really. If you are only keeping it for a year then theres no point investing (i.e. seeing a Finanical Advisor). Investing is longterm (5+ years)

If I were you I would stick it in a 1 year savings account or bond.

isofa

As you are only looking to put the money away for a short period, a year or so, avoid investments, and stick to high rate savings accounts, therefore you don't need help from an IFA.

First max out your ISA, the allowance this year is £3600, so you can put away a further £2600 in yours, just make sure it's a good rate.

Then you can save the rest in high interest instant access accounts, you'll get around 6.5% with on-line accounts from Icesave, Kaupthing Edge, ICICI etc. Or go for fixed rate "bonds" for 1 year which will pay around 7%, again from similar companies.

For the best buys and accounts tables see Moneyfacts.

JJmcClure

I think it will be a short period, yes - a year max, as I'm keen to buy next year.

I'd never heard of companies like Icesave and Kaupthing Edge, are they good?

All the websites seem to recommend the Alliance & Leicester: Premier Direct Current account as well

I'm with Nationwide and am wondering if the Alliance one is as good as it sounds (8.50% AER) - anyone on here have it?

What's the catch?

isofa

Icesave and Kaupthing Edge are excellent, (as are others) many threads on here about them, just have a look through the forums. They are also regularly covered by the Money supplements in the Sunday (and other day) press. Often featuring in their best account tables. Have a read.

I assume the catch with the Premier account you mention is that the high rate is only either payable on a maximum balance, or you have to fund the account with a set amount each month and then the high rate is only payable on a set amount again. However I'm not a customer of that bank, so don't know in detail, read the T+Cs, and have a look for "clean" accounts as Martin describes them, those without catches or intro bonuses.

The tables at Moneyfacts show the full picture.

Edited to add, just had a look at the A+L website, as I suspected, it's a catch.

"Earn 8.50% AER (fixed for 1 year) on balances up to £2,500. 0.10% (variable) on balances over £2,500."

So they only pay 8.5% on the first £2500, and 0.10% on the rest. Therefore, if you put £10,000 in this account, for a year, you'd get £212.50 interest (on the £2500) + £7.50 interest (on the £7500) = £220 interest (gross). The maths is very easy.

But if you put the £10,000 into a 7% account (for example), you'd get £700 gross interest, that's £480 more than the A+L account.

dunstonh

As others have said, no point using an adviser.

A tied insurance agent (the type you see at a bank and a few old salesforces) will only want to sell you a product and an IFA is primarily an investment adviser and you dont need investments but savings advice. We would typically open up moneyfacts or look on the same websites you would to see which option is coming out best at that moment.

JJmcClure

Thanks again for the replies

OK, I'm liking the sound of Icesave and Kaupthing Edge. I'll put some of the money in there after I've sorted out the ISA and filled that up

Current accounts are what also interest me, as mentioned

The Alliance And Leicester one sounds like a bit of a swizz. I'm hunting the site for clean ones, but which ones would people recommend?

I've got a Nationwide Flex Account at the moment, but for once in my life want to get the most out of my money

isofa

You'll never get a decent top rate with a current account. If you've a decent amount to save, put it in good high interest accounts, not current accounts.

Current accounts are meant to use as in and out, cheque and payment accounts.

Icesave and KE are both clean accounts, did you have a good look through MoneyFacts?

You'll get the best rate if you can lock the money away for 12 months in a fixed rate "bond".

JJmcClure

Hi sorry, I think I'm confusing matters I'm going to put all my money into somewhere like KE or Icesave in a savings account

Aside from that, I'm wondering if there's a better Current Account out there than my Nationwide Flex Account. It's just for my salary, bills, etc, not for savings

Sorry, I'm confusing - just curious which current accounts are any good, or clean, if they exist?

isofa

Current accounts are much of a muchness really, Lloyds TSB offer a Classic Plus, if you pay a minimum of £1000 in a month, but I think it's virtually the same T+Cs as the A+L one, most are: a good rate for a small amount, then 0.1% for anything higher. Just best to move any surplus money into a instant access high rate account, and keep a float in the current account for bills and bits and bobs, never leave a high balance there, it'll attract a dismal rate of interest.

The best current accounts are listed here, and I think the A+L one you mentioned earlier comes top.

The idea of the "clean" premise, is an account that offers a good standard rate and service, without an introductory bonus (to hook people in), or complex T+Cs preventing movement of funds, or ones that are likely to drop their rate quickly. Those with a rate guarantee are best, but most accounts at the top of the tables now, won't be next year, to get the best rates you constantly have to move your money, it's tedious!

earlgrey_3

Personally, I wouldn't choose a current account on the basis of the interest rate they pay alone. Most only pay decent interest on the first few thousand and in the scheme of things is neither here nor there. For me the most important bit is that they're efficient and I can get them instantly on the phone without pushing buttons and queuing till I lose the will to live.

Nationwide comes out well in surveys though I opened one as a secondary account recently and haven't been overly impressed. It's about ok and there's an e-saver account that pays a decent rate that you can move money to and from. For serious amounts I'd look elsewhere.

Abbey offer good rates on their current account but are dire to deal with and best avoided. You could also look at the Coventry BS current account who are good to deal with, offers a good rate on the whole balance, but provides limited functionality. As always it's a trade-off.