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True power of trusted advice

 

Many often believe that Financial Planning is only about increasing wealth. Although this mandate may be true for some, we often find that there are other drivers for people seeking guidance.

Let us share one unforgettable instance, the case of John and Bianca. John and Bianca had two young children when we first met. We were originally introduced to the family by their home loan manager, who identified that after all expenses were paid, they found themselves having little left in the bank at the end of each fortnight.

Before talking about money, we had a discussion about what was important and what they wanted to achieve as a family. It was immediately apparent that travelling and spending time together was the main priority, especially while the children were young. At the same time, they wanted to be in a position to reduce their debt in a meaningful way, as this would provide further flexibility to make other lifestyle choices in the future.

We then had a discussion about priorities. We identified that buying toys and regularly eating out were expenses which didn’t really have meaning and was something the family was happy to reduce. We then worked to devise a budget, where it was determined that $1,800 per month could easily be saved, whilst still having money to occasionally eat out, and still pay for all the day to day living expenses.

After getting to know the family over the course of a few months, we developed their “Financial Road Map”. In the first phase, we simply started a regular savings plan for $1,800 per month, tweaked their superannuation arrangements and implemented personal insurance cover to provide a financial safety net. This strategy continued and after 12 months the clients were shocked by how much they had saved.

As savings grew, we moved the strategy to the second phase. This is where all investment income was directed onto their home loan as additional repayments - something they were absolutely delighted with. As wealth was starting to grow, we were asked if it would be best to cancel the various protection measures put in place so more could be saved.

Although this could have reduced the home loan more quickly, we reminded John and Bianca about why we had originally put the cover in place. Time passed without hearing from them, so we called to simply touch base and check how things were going. To our shock, we quickly learnt that Bianca had recently suffered from a severe stroke. Luckily she survived, but was no longer able to work, especially as she had endured a loss of movement and her capacity for mental concentration.

The family by this time was beginning to worry about their finances and assumed that they would have to dip into their savings just to survive. We reminded them that we actually implemented a few arrangements designed to provide assistance for these exact events. After providing additional guidance on the claims process, we successfully applied for regular monthly insurance payments, which were quickly deposited in their bank account.

Not only did this allow John and Bianca to have funds for bills, home loan repayments and food, it meant that they were under no financial pressure and could simply focus on getting better. After months of rehabilitation, Bianca was able to return to work and the family were able to continue with their financial plan.

Although we never want to see our clients go through traumatic events, it is always comforting to witness the positive impact of good advice and how it prevented John and Bianca from possibly losing their home.

 
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©2020 Synergy Private Wealth

Joshua Fileti is an authorised representative of Fitzpatricks Private Wealth Pty Ltd AFSL 247 429, ABN 33 093 667 595.

Synergy Private Wealth is the registered trading name of Fitzpatricks Private Wealth S.A Pty Ltd, ABN 70610947003, corporate authorised representative of Fitzpatricks Private Wealth Pty Ltd.

This information is of a general nature only and has been provided without taking into account your objections, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances.