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I have always looked after my own financial affairs. I feel I know more than enough about the financial products I use and buy to ensure I get the best deals.

At the moment I am going through a house sale and purchase, and both the person I am buying from and the person buying my property are using a financial advisor to source and arrange their mortgage.

I use price comparison and financial planning websites to compare an contrast the different products available to get the best deal, but I was told that 90% of people (I am in the UK) use financial advisors. I am sceptical because I know the rewards these people get for recommending products, but do they really have access to better deals that are not on the open market? Or are they just a big con for the financially naive to help line someone else's pocket?

  • In the US the mortgage process is usually with a bank or broker. I've not heard of a financial planner who gets involved with arranging mortgages. Is this different in the UK? – JoeTaxpayer May 22 '11 at 16:36
  • The mortgage is with the bank, but the financial advisor can act on your behalf, similar to a broker I guess, by recommending specific products that may best suit you. They try to get you the best rates, and get paid a commission from the banks, which is why I am dubious. – Codemwnci May 22 '11 at 17:20
  • I'm not aware of any mortgage deals that are only available through advisors - whereas I think there are some that are not available through advisors (because they don't pay commission). – Ganesh Sittampalam May 22 '11 at 21:09
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Yes, maybe for themselves, but for you that depends on quite a number of things.

  • How much business you are bringing for him(her) ?
  • How much potential business he(she) sees emanating from you in the future ?
  • How gullible you are or how educated you are about the different options in the market ? If you are quite well informed and ask questions, he will be on his best behaviour.

But not all advisors are scum, but accept the fact that you are their cash cow and you are there for their takings. Some advisors are true to their professions and advise ethically, trying to get the best for their clients. So search for a good advisor rather than a cheap one.

And regarding the mortgage you are talking about, the mortgage provider and the mortgage taker don't deal directly, but use their solicitors. Every party wants the least of legal hassles for their transactions and get the best legal help. The financial advisor maybe both rolled into one or he has legal practitioners in his firm who would do the legal job after he takes care of the financial matters. Seems a cost effective workshop.

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