Everyday we see advertisements from companies, telling us why we should spend our money with them instead of their competitors. Marketing experts have come up with lots of different ways to sell yourselves and make you want to buy their products. For instance, when you do your shopping you get drawn to the signs that say things like ‘two for £2’, even though you really do only need one, and you end up saving about 4p off the £1.04p each price. Also, it’s amazing how long shops stay open for after putting up the ‘closing down sale’ banners to grab your attention. Then when you watch the television, you can’t go for longer than a month without being made to feel as if you should go out and buy a new sofa before the ‘massive discount sale’ ends.
In the financial world, it’s not always as obvious that companies are trying making you feel as though they are the ones you should be buying products from; it can sometimes seem like they are providing you with information instead of a sales pitch. For example, mortgage lenders sometimes tell you about how low their interest rates are, but don’t tell you how big the fee that goes with it is. Or maybe they have a low rate to start with, but then after some time it goes up and doesn’t let you move to another lender without being heavily penalised.
Mortgage lenders have to try and make money with whatever tools they have, so I don’t blame them for trying to grab the publics attention by making the more attractive features of their products more prominent than the unattractive ones. However, it is important that you look at a mortgage as a whole and take all factors into account before committing yourself to what could be the biggest financial transaction of your life.
This technique isn’t just used by mortgage lenders, it can also be seen in the insurance markets. You often see special offers which give new customers upto 50% off their first year’s premium, which on the face of it seems like a really good deal, but they haven’t told you what it’s 50% off of yet. If you get 50% off a figure that you don’t know, it doesn’t really mean much. Maybe it was twice as much as another provider could do it for before the discount anyway.
Recently, internet search engines have become more popular, mainly due to the large advertising budgets they have available to them. These websites get quotations from a range of insurers and recommend the one that is cheapest. The cheapest policy they can find you will usually be the one that doesn’t have any extras such as accidental damage cover or legal fees included. Although it is possible to get policies which give you a good level of cover; the sites usually try and direct you to the most basic of policies in order to get your attention, but sacrificing quality at the same time. Although it’s good to make sure you are getting the cheapest deal you can, the most important thing is to ensure that you are properly covered.
Because everybody is trying to sell you their own products, it is important that you speak to somebody who is independent, so that they can guide you towards the best deal for you. Kieron Bassett Financial Services are an Independent Financial Advisers and we are open six days a week. Contact the office on (01524) 832057 or via e-mail info@kieronbassett.com to arrange an appointment.
Jason Hinde CertPFS
8th March 2010
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