Being a financial adviser, but more specially, a career mortgage broker, you really do get a unique window into people’s worlds.
There is a very famous quote from Peter Drucker, the management guru that goes:
“Tell me what you value and I might believe you, but show me your bank statement, and I’ll show you what you really value.”
Very few people share contents of their bank statements, or indeed credit files, with anyone, including spouses or partners! Yet as advisers, we get sight into that world, which if you know where, or how to look, speaks volumes.
What I have noticed over the years is that all the warning signs are there that a client has, or may, suffer from mental health issues from their credit report or bank statements. The obvious warning signs are; high levels of indebtedness, missed payments, arrears or more serious credit issues such as county court judgements (CCJs) or defaults.
There is a well-documented link between your mental health and your ‘financial health’ (equally true is the link between your mental health and physical health but that is for another day). Indebtedness or past credit issues are often the cause of, or result of, mental health issues.
It’s very logical when you think about it. For example – you see your debt creeping up, that stresses you out, you can then behave erratically and go on a downward spiral from there. Conversely, you may have had a major event happen such as bereavement, or addiction, and in that period your finances went to pot as you had bigger issues to deal with.
As a mortgage broker we have to deal with these issues head on in order to obtain finance/cover for our clients. Lenders (and where relevant, providers) will always want an explanation of the cause, so getting to the true reason is vital, and this is where the skill of an adviser will set them apart.
There is nothing to stop a client saying: “I got made redundant and fell behind, but since getting a new role I have maintained things impeccably.” A perfectly reasonable excuse which many lenders will accept. However, is that truly WHY? It will only be by looking into the clients eyes and looking for hints that they aren’t showing you the full picture. A good adviser will probe deeper and get to the root cause.