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Guide to advising the self-employed

  • Describe the differences for advising between an employed and self-employed person
  • Describe the importance of keeping a track record of earnings over the year
  • List the factors providers look for in a self-employed person
CPD
Approx.60min
Guide to advising the self-employed

Introduction

The self-employed present a whole host of different scenarios to the financial adviser, than the typical employed client.

They may have built up their business over a number of years and are looking to sell on or perhaps they are at the early stage of their career, and still have intermittent income.

But the needs of the self-employed are very different. Take pensions, for example.

Those who generate their own income will not be eligible for auto-enrolement, unlike the employed, so where does this leave them?

One option is to open a Sipp, but this may not suit everyone starting out with minimal income. 

Similarly, getting a mortgage can be difficult, as lenders always like reliability of income over a long period of time, even though employment comes with its own risks.

This guide sets out some of the issues facing the self-employed as a client, and how financial advisers should address them.

My thanks go to Lee Rhodes, a financial adviser at Rhodes Advisory; Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self Employed; Hannah Owen, financial planner and mortgage adviser at Quilter Private Client Advisers; Amit Patel, mortgage and protection consultant at Trinity Finance; Will Rhind, mortgage expert at online broker Habito;Tom Sparke, investment director at GDIM; Fidelity; Adrian Lowcock, head of personal investing at Willis Owen;Tom Sparke, investment director at GDIM;  Victoria Rutland, chartered financial planner at EQ Investors;Jiten Varsani, mortgage and protection adviser at London Money; Philip Hanley, director and independent financial adviser at Philip James Financial Services; Jamie Smith, a financial adviser at Foster Denovo; Stephen McPhillips, technical sales director at Dentons Pension Management; Steve Webb, director of public policy at Royal London; Bruno Welch, managing director and mortgage consultant at Clayton-Welch Associates 

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Hannah Owen what for of income do lenders consider fro a self-employed person?

  2. According to lee Rhodes, what evidence do lenders require to get a mortgage?

  3. According to Adrian Lowcock, what is the biggest thing that the self-employed need to consider when putting together an investment portfolio?

  4. The self-employed universally need more protection than the employed, true or false?

  5. What is one of the biggest problems when trying to insure the self-employed?

  6. Saving into a Sipp is an automatic solution for every self0employed person, true or false

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe the differences for advising between an employed and self-employed person
  • Describe the importance of keeping a track record of earnings over the year
  • List the factors providers look for in a self-employed person

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