Focusing on the here and now

When we look at where we are today – there are things we like and things we don’t like. The first few months of the year is a great time to take stock of where we are, think about our plans for the year and focus on what we can change for the better both as advisers and for our clients.

The proportion of Australians seeking financial advice is still relatively low – around 20 per cent according to latest figures by Investment Trends (2015).

Reasons for this include the perceptions, or rather misconceptions, around financial advice, including:

·         Many people still don’t understand what financial advisers do;


·         Many people still believe you need lots of money to invest before there is any value in seeing a financial adviser; and

·         Financial advisers sell products not advice.

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We need to ensure the value of advice is well understood by our family and friends and they can then promote the value to their family and friends.

A few years ago I recommended to three of my friends that they would benefit greatly from seeing a financial adviser. Here is a little backstory.

Friend No. 1 was working in a very highly-paid consulting role. Despite her high-paying job, I was concerned because she seemed to be spending all her income. I suspected there was no budgeting happening, saving or money being put aside for taxation or superannuation. And I was pretty sure there was no income protection or TPD insurance in case of emergencies.

I was also concerned about the state of her the mortgage. She had an interest only loan, and I was convinced there were smarter ways to pay down her debts.

After seeing an adviser, she recounted the first visit was a success. She felt everything was explained and her need for help was realised. She agreed to insurance but as with many other people and with life in general, things got in the way and not all the follow-up actions were taken. My friend thought that the adviser would rouse on her for not completing what was agreed. This is another advice misapprehension.

Personally, I know my adviser is very adept in dealing in the here and now, and expect most advisers are. It doesn’t matter about poor decisions that have been made in the past, or suggestions that have not been followed through. At each appointment we start with a snapshot of where we are now and how to move forward from that point.

While, of course, it’s great to have made all the right decisions in life, but most of us aren’t in that basket.  

It is the job of the financial adviser to take us as we are and work with us to be better in the future.

Friend No. 2 was constantly distressed about earning more money, spending less money and solely focused on the needs of her son and his future – school fees, extra-curricular activities and an investment property.

I could see the stress affecting her health. She saw an adviser, as recommended, and found she was OK after all. The relief was wonderful to see. It was great she went when she did, but had she gone earlier she might also have shaved off several years of stress. However, once again she thought she would need investable assets to make visiting an adviser worthwhile, which had prevented her from seeing an adviser earlier.

A good take away from this is that we’ve got to become better as an industry in conveying the messages around how we help our clients.

Friend No. 3 was changing jobs and about to cash out holidays and other payments and start working on a freelance basis. He needed to set up super, insurance and an account to put his income tax money. A planner could have helped him with all of this and made it simple.

Unfortunately, this friend had ignored all these things for too long. He, like Friend No. 1, was concerned he would be reprimanded by an adviser who would chastise him about everything he had done wrong. He, too, needed to understand that it’s all about the here and now.

We need to make the message clear. It’s great to start early and make the most of everything we can but the reality is that most of us don’t. It’s important to communicate that even if we’ve made mistakes and perhaps not had the best start, all is not lost.

Let’s start from the here and now. Deal with what we have, and know we hold power to change. Let clients know that’s how we can help them. It’s never too late to start – choose today.

Julia Newbould is the Stella Network leader at BT Financial Group

Focusing on the here and now
julia newbould
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