Fortunately I didn’t watch to the whole programme. While there are definitely cases where people are conned and preyed upon by unscrupulous traders that we need to be aware off.
There is also the fact that we need to take responsibility for the decisions we make.The piece that annoyed me in the programme came towards the end when someone was talking about mortgage rates and the early redemption penalties that banks charge if you come out of a mortgage early.
As a professional investor I deal with this a lot, I understand that I might realise things that other people just buying their one personal home do not. I assume that they would have used a mortgage broker and that a professional should have explained the conditions of a loan.
When commissions are paid on top of a salary for the completion of a sale then I believe that the intentions of the sales person are loaded towards their own gain and not the needs of the buyer.
This can be anything from a car, a training programme, a house or financial advice.
If you are buying something and the sales person is going to earn commission then you need to consider exactly who they are working for, you and giving you impartial advice or themselves as they want to earn more money.
Early redemption penalties – just to explain – are charged by banks if you shorten the term of the loan agreement. This is because in most cases the bank will have “Borrowed” the money they are lending you on the money markets and they will have an agreement and a fee to pay. If alter the term of you agreement they will have money that they are no longer earning interest on (from you) but are paying interest on (to their lender). Hence they charge you a fee to cover that cost.
I believe the house price boom was caused by estate agents earning commission based on sale price – so they elevated it. People were sold policies they did not want or need because financial advisers earned commission on the sales. People attend private training courses on getting rich because the sales people often earn commission or affiliate rates for the promotion.
Think about the advice you are getting, who stands to benefit, and get a second opinion, let’s stop moaning and take responsibility.