There are more and more companies and private individuals providing credit counseling services. They offer help in managing assets, investing and finding the best loan terms.
The right advisor will help you save time, nerves and money. Can we therefore fully trust our adviser? Find out how much a financial advisor will earn on our loan and how to protect yourself against unfair practices used in the industry.
Who is and how does a financial advisor work?
The task of a financial advisor is to help the client find a loan offer tailored to his needs and financial possibilities. Advisors are up to date with all products of the financial sector and understand the changes taking place in the market.
Thanks to this, they can provide the customer with all the knowledge they need in a clear and understandable way. A good financial advisor will inform you about the differences between offers and the best promotions, help you optimize our finances and plan the repayment of current liabilities and, above all, save our time.
The task of a credit advisor is only to suggest the best solutions. How exactly does it work? The person is interested in the loan contacts the adviser, who already at the first meeting verifies the client’s creditworthiness and expectations regarding the loan. Based on this information, the adviser performs an analysis of the available offers and presents a list of the most favorable in his opinion. If the customer chooses the recommended product, the adviser will help in preparing the content of the preliminary contract.
One of the tasks of an advisor is often to help collect documentation that the credit procedure requires and to help the client complete the application. Each subsequent loan application reduces our Credit Checker scoring, which is why assessment of the chances of signing a contract with a specific bank can be very useful.
How much does a financial advisor earn on our loan?
Advisory services may be part of a package of services of a financial institution. The income of the credit advisor comes mainly from the commission paid by the institution whose product he was able to sell. The salary increases if you manage to persuade the client for a higher loan or for additional products such as credit insurance or an investment product.
Banks set different rates for their advisors, which may be the reason for unfair practices. The act obliges the broker and credit advisor to inform the client about which institutions he cooperates with and what commission he receives in exchange for the products offered. If the adviser does not want to do this, it is possible that his interest is contrary to ours.
To sum up, the amount of remuneration that an independent financial advisor will receive depends on the type of service, not on whether we will use the advice. Financial intermediaries only earn when the transaction is completed (the higher, the higher the amount of the transaction).
The earnings of advisers vary depending on his experience, the type of products he can sell and the amount of work required to prepare the offer. So how much does a financial advisor earn? The level of average gross income for 2019 can be found in the payroll report prepared by Hays Poland 1.
It is difficult to say how much exactly a financial advisor earns on a mortgage because the parties to the transaction now have full freedom in shaping the commission.
Who can become an investment adviser and credit broker?
Until recently, anyone who had knowledge of finance as such could have appointed a credit or investment advisor. The changes, at least at the naming level, were introduced by the Act of 23 March 2017 on mortgage loans and supervision of mortgage brokers and agents.
Records indicate that a person who does not receive remuneration from the lender but only from the client to whom he provides services may be considered a credit or financial advisor. This and other provisions are to limit the risk of abuse and activities to the detriment of the consumer.
As the Act states, to become an independent advisor you must, among others obtain the permission of the Polish Financial Supervision Authority, be entered in the register of advisers and pay the membership fee. The entry of a new member to the register of credit intermediaries is a cost of USD 600. The list of investment advisors and credit intermediaries present in the PFSA currently contains 712 names.
This does not change the fact that there are many people and institutions offering financial advice on the market. It could be:
- Independent financial advisor – a private person who specializes in a specific area of finance. He has no links with banks and does not enter into cooperation with them. He provides his services to private individuals or companies and receives remuneration directly from the client. A specific fee is charged for each consultation, and the transaction does not affect the cost of the service.
- Banking advisor – a person dedicated to talks and direct cooperation with clients. As a bank employee, he knows all the products offered by the institution and is able to assess our chances of getting a loan with a high probability. I get paid only when the transaction between the customer and the bank is completed.
- A company offering credit brokerage and investment consultancy – gathers in one place products offered by various institutions with which it cooperates. Here, too, credit advisors make money only after finalizing the transaction in one of the proposed institutions.