Team financial security – the shoes you need filled

If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur. Red Adair, innovator.

The social media age has changed the way we obtain information and there are many people out there giving you their ‘advice’. Be wise.

Choose your advisers well. Make sure they are licensed to practise and have a good reputation. Self-titled ‘experts’ writing books about money matters don’t count – most aren’t qualified to give that advice. Beware of vested interests pushing you a certain way.

When it comes to financial advice, seek advice from a licensed, practising, experienced financial adviser. We have to do much education upfront and ongoing, and legislation, markets and situations change constantly. So what was right back then, may not be right now.

I have seen many people given what I consider wrong advice from someone not an expert in this field. People don’t know what they don’t know. Even some professionals have got it wrong. As my Mum says, if it’s so easy, why do you need to undertake so much study and continuous professional development?

Remember: avoiding a mistake is key. Not only financially but emotionally some people will be scarred for life if it goes wrong. Then they do nothing, which may limit them ever getting to where they need to be.

You might remember that I saw three advisers on my journey before I became one, and I am very fortunate to be surrounded by quality advisers. There are so many good advisers out there. Sure, every industry has some of ‘those’, but I would argue the majority of professionals in each industry are doing the right thing.

Get your team on board. Ensure they work together. And ensure they stay in their lane.

This is my ready reckoner of who makes up your financial security advisory team and what their specific roles are.

Financial adviser
I am a licensed financial adviser. Most financial advisers provide information around investments and insurance, but it goes way beyond that. The best outcomes generally occur when strategy and investments work together. Many people focus only on the investment, but much can also be gained through strategy. Remember we’re providing advice, not selling a product. We’re also known as financial planners.

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There is a lot of planning involved in getting your financial house in order and keeping it that way forever!

I take a holistic approach. At On Your Own Two Feet, we get to know our clients really well. We discuss your ‘family tree’, your goals, your values and your health in great detail. With this intimate knowledge we are better placed to provide trusted, ongoing financial advice on:

  • wealth accumulation/investment
  • income and asset protection (insurances for personal but not general insurance such as house, car, business premises, public liability)
  • tax strategies
  • superannuation
  • retirement planning
  • redundancy planning
  • life event planning
  • estate planning
  • government benefits
  • debt management
  • credit assistance.

I like to also think of myself as a client’s ‘project manager’, coordinating specialist input when it is most needed. Financial advisers tend to know a significant amount [about] your situation because we delve into so many areas to ensure we give the right advice. I am, for example, the intermediary (sometimes, even interpreter!) who talks with accountants and lawyers, gathering the best advice from them for a client and presenting it, jargon-free.

One thing I don’t have is a crystal ball. Nor do any other financial advisers I know of! Eighty per cent of our work is advice and strategy, based on an individual’s goals and circumstances. The remainder is investment advice but we can’t control investment performance. If only we could, we’d all be laughing!

Clearly, financial planning is not stand-alone. Financial advisers may turn to these other specialists for their expert input.

Stockbroker
Years ago, I was personally caught out thinking a stockbroker was the same as a financial adviser and would make sure I was doing everything right – on what I later understood to be advice on everything from investments to estate planning, debt management and preparing for retirement. I was wrong. It was just about buying shares – and that’s when I really began my journey to be ‘on my own two feet’.

Stockbrokers specialise in picking and trading stocks and investing people’s money accordingly. A licensed financial adviser who understands your situation and how you should invest can help guide you as to whether you should be investing this way and give you alternatives to consider.

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Financial advisers can give you investment advice and may be able to give individual share advice, depending on their licence, capabilities and willingness to take on that role (as opposed to recommending investments other than individual shares).

Accountant
Accountants are great at preparing your compliance work (like your tax return) and can determine the exact amount of capital gains tax/losses, so they can advise you on what to do. They can provide structural advice and prepare documents and deeds (e.g., trusts, companies, type of trusts) in conjunction with the financial adviser and lawyers.

These are specific areas of expertise beyond a financial adviser’s scope (usually), which is why we all need to work together.

Accountants typically view the world historically for individuals and some will form part of a ‘business advisory’ team to help business owners and be forward thinking. Some are great at working with your financial adviser in relation to the day-to-day and future planning. I always find it a much better experience for my clients when we work in partnership with the accountant, as we’re working together for the client’s best interests.

People trust their accountants, but you need to be aware of their licence limitations. Most of the accountants I have met are not permitted to give financial advice, and may not be licensed for certain forms of advice. They would happily run a mile rather than risk their business for being considered to have provided ‘advice’. It’s incredibly important to be aware that although your accountant hasn’t given you financial advice, you may still be in need of it.

Worse still, your accountant may have provided advice, but it’s incomplete or inaccurate – sometimes we don’t know what we don’t know. I have certainly seen people given the wrong advice because when it comes to financial advice the devil is in the detail, and while something sounds right, there is another part that undoes that concept. So it’s great when accountants work together and honour what I call ‘staying in your lane’ and understand that you need to seek financial advice from the appropriate professional.

Most first meetings with a financial adviser are free of charge, so this allows you to go and meet with one and see if you should have both on your team.

Bookkeeper
If you have a business, you can save a stack by getting your accounts sorted out by a bookkeeper who then passes on the prepared paperwork to the accountant for their high-level advice. Or you can consider the many tools/apps/software programs that are now available that can do a lot of the work for you.

Mortgage broker/finance broker
The financial broker is your alternative to going to the bank directly, sourcing more choices to organise your borrowing needs for your home, investments and business as well as the structure of the loans.

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If you are borrowing, it is important to have sought financial advice first and for the broker and financial adviser (and often the accountant too) to work together. Should your home loan have an offset account or be a line of credit? What name should you borrow in? What are the consequences of certain structures? The set-up may have costly consequences if not done with vision for the future in mind.

It’s also important to seek advice about what you are comfortable borrowing, as opposed to being told what you can borrow and, hence, overstretching yourself.

General insurance broker
General insurance brokers handle the likes of insurance cover for your house, car, contents, pets, business premises and landlord insurance.

They will deal with public liability and public indemnity and other business-related insurances. These aren’t usually areas financial advisers specialise in: we specialise in the personal insurances.

Lawyers
There are so many aspects of the law and, like doctors, more lawyers specialise in specifics nowadays. These are the days of niche. You can’t be an expert in everything because it has all become a lot more complicated.

You may find you deal with one firm for one aspect and another firm for another. Some larger firms may cover various niches with different departments.

  • Estate planning lawyers do all the planning for you in relation to your estate, pre and post death – wills, powers of attorney, letters of wishes, advanced health directives and various trusts, including planning for testamentary discretionary trusts and their implementation. They may also look after estate administration and litigation.
  • Family lawyers deal with the relationship issues such as family disputes, divorce, child access and negotiation of property settlements.
  • Commercial lawyers handle general disputes, preparation of business-related documents and checking of contracts.
  • Conveyancing lawyers are used for buying/selling houses.
  • Personal injury lawyers are solicitors trying to secure a compensation payout for an injury.

There are potentially other lawyers you may need such as human resource lawyers, etc.

Mediator
This is a nice way to help see each other’s sides and often highly necessary in cases of separation and divorce and business issues.

Mediators are used in preparation for family law settlement and when children are involved, and for negotiating a settlement in business and employment issues. They can be a way of closing your settlement without having to go to court. Don’t forget to wrap it up with the appropriate legal documents though.

Insurance broker
Insurance brokers are usually financial advisers who have chosen to sub-specialise only in personal insurance and business owner insurance (that is, they don’t offer holistic advice), whereas most financial advisers can advise on insurance as a part of getting your whole financial house in order: I certainly do! From my perspective, dealing with one person is more streamlined and the adviser can stay on top of issues whenever situations change.

Other specialists
Those mentioned above are the main team members. Being ‘on your own two feet’ is about being the best you can be in all aspects of life.

You may want to seek out specialist professionals:

  • career counsellors
  • recruitment agents
  • life coaches
  • budget specialists
  • psychologists.
  • sometimes the support you need isn’t always professional:
  • social groups/churches/outlets for people going through similar
  • life situations (such as divorce, sole parenting, retirement)
  • lifestyle assistance for those who need to outsource general issues
  • help – moving house, dry cleaning, a big party
  • health retreats
  • gyms, yoga, dance classes
  • networking groups and associations
  • stylists – and let’s not forget shoe shops (ha ha!). The list is probably endless.

No one person knows it all. A team approach ensures that individuals’ weaknesses are overcome by others’ strengths. Gather the right team around you.

On Your Own Two Feet: The Essential Guide to Financial Independence for all Women, written by Helen Baker, published by Ventura Press, RRP $32.99.

Helen Baker is a qualified, practising and licensed financial adviser and founder of On Your Own Two Feet, an Australia-wide service dedicated to empowering women to gain and retain their financial freedom. She is among the 1 per cent of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at www.onyourowntwofeet.com.au

Do you have a team to keep you on track? Which member is most important to you? Why not share your views in the comments section below?

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Written by Helen Baker

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