My Favourite Financial Organisations

Neil Faulkner's favourite organisations include a service for debtors, a unique alternative to saving or borrowing from banks, community finances and foreign money.

There aren't many banks I'd recommend to people and, when I say not many, I mean none at all. There are, however, a small number of other organisations I like a lot that could assist you financially in some way.

Debt advice

The thing about people is that we can often learn as much from what we don't say as what we do. To bring this into context, we often don't hear tributes to quality organisations, because people rarely bother to praise. We prefer to complain about the services we haven't liked. I guess that's why we have a Grumpy Old Fools board, but no Happy-Go-Lucky board. Therefore a lack of complaints is what you should look for when you're trying to assess the quality of an organisation.

Several organisations have been praised on our Dealing with Debt board for their assistance, including the Consumer Credit Counselling Service and Citizen's Advice. However, both organisations have received a significant amount of criticism too. (That's partly why Dealing with Debt exists: to get a second, and usually better, opinion.)

One organisation that has received praise but, from the many thousands of posts I've read, virtually no criticism, is National Debtline. I take this as a huge indicator that it is the best of the services, so it would be top of my list to approach if I was stressed out with debts.

Foreign money

I find it distateful recommending a big financial company, even if it's a building society rather than a bank. Indeed, Nationwide is far from perfect, but of all the large institutions it has the fairest terms.

Sometimes it goes beyond fair in order to stand out from the crowd. It does so spectacularly when it comes to overseas purchases and withdrawals. If you have one of its current accounts and make a purchase or withdrawal from overseas, you will probably get the best deal you could find anywhere. The exchange rate is for most people impossible to beat, plus there are no charges or commission. It is a must for frequent travellers.

When making purchases overseas, vendors sometimes offer for you to pay in pounds. Decline this offer and pay in the local currency, or you will not benefit from Nationwide's exchange rate.

A close community for saving, borrowing and banking

Credit Unions are an under-used and under-rated resource offering various banking services to people with a common bond, such as their job or where they live.

Despite my earlier comments, I've never read any criticism of these organisations, just praise.

I'm not going to cover them in detail here, because I have done so recently in Community Banks That Treat You Fairly. It is one of my favourite types of organisation though, so I include it here for completeness.

Borrow to and lend money from other people

A different type of community that I like is called Zopa. Its excellent design has now attracted 200,000 members.

Through Zopa, you can borrow money from or lend money to other individuals, cutting out the banks. It doesn't usually offer the very best interest rates, but you can get, or kindly offer to other people, fairer loan terms than normal.

Individuals lending through Zopa, have so far got a return of 7.3% on average (before tax, but after bad debt and the Zopa fee). Bad debt is just 0.04%. If you lend £500 it is split between at least 50 borrowers to add to your safety.

Borrowers can get very good rates, but more importantly they can repay their loan early at no extra cost. They also have the satisfaction of keeping some of their money out of the banks' hands. Borrowers are checked vigorously, so you need to have a pretty good profile to be accepted for a loan.

How wonderful it would be if such organisations replaced banks. Alas, that'll probably never work.

So, you see, I don't have many favourites and none of them are banks. Some profit-making organisationss can be trusted, but they are few and far between.

Please add your favourite resources below, but no advertising please! I'll chase advertisers with a pack of Grumpy Old Fools armed with surly-looking garden gnomes. Ever faced a GOF after he/she/it has received an invitation to join Facebook? I don't fancy your chances.

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