Shiller: Offer cheap home loan advice

Friday 27 February 2009

Article by Mozo

Governments should subsidise financial advice to help steer homeowners away from another housing bubble, one of the world’s leading money authors has claimed.

Dr. Robert Shiller, author of Irrational Exuberance, has insisted that by offering cheap or free advice on managing home loan, credit card debts and other financial essentials, Aussies could steer clear of dodgy home loan deals in the future.

The Financial Standard reports that the author is worth listening, as he is one of a handful of people to predict the credit crisis years before it happened.

“The same way we get subsidised medical advice … financial advice is just as important,” Mr Shiller insists, adding that one of the main causes of the current problems was that people were agreeing to home loans without fully understanding the risks involved.

Elsewhere, the Brisbane Times has reported that commission-based financial advice has received a flogging after a recent study showed that Aussies are paying 12 times more for commissioned guidance than they are for fee-based guidance on managing things like home loans, credit cards and savings accounts.

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