My Life as a Financial Concierge
Ever had an accountant set up a business structure for you—a company or a partnership or a family trust—then leave you to figure out how to manage your legal obligations? Or an accountant who set up your bookkeeping software, then cut you loose without any training or support?
Obviously not a financial concierge. Hardly surprising, because they’re pretty thin on the ground.
So, what exactly is a financial concierge? Simple. A financial concierge combines the best elements of an accountant, financial planner and business broker, all in one package. Throw in expertise in organisational development, and you have someone by your side who will open doors at every stage of the life cycle of your business. From initial set up to expansion, through explosive growth and profitability, to realising the full value of your life’s work when you sell the business. Then managing your money while you kick back on that around the world cruise you’ve always promised yourself.
Mind you, not all financial concierges are created equal. A financial advisor or accounts manager might adopt the moniker, without offering the full suite of services you’d gain from working with someone like me. Let me give you an example, drawn from life.
Managing Your Own Super
I recently gained a new client. Turns out his wife had rolled a heap of her super into a Self-Managed Superannuation Fund, or SMSF. Used the money to buy a commercial building.
Good for her. Trouble is, no one was helping them manage the fund. ‘Self-managed’ means my client and his wife had incurred some onerous legal responsibilities. Get these wrong, and they’re facing substantial penalties. You’d assume their accountant would offer some advice, or at least point them in the right direction.
Incorrect. Their accountant didn’t want to know about it. Outside his area of expertise.
He could have referred them to an investment advisor. But investment advisers usually have a product they want to sell. They don’t provide guidance for the neophyte trustees of a freshly minted SMSF.
Now that my client has engaged me, I can walk him and his wife through all the compliance issues involved in running an SMSF. But was commercial property the wisest investment choice for them to make?
Asking The Big Questions
This is where the financial concierge shines. I know my clients—their dreams and aspirations, their long-term plans, their personal strengths and weaknesses. I know their businesses, too: how they’re performing now, the challenges they face, their likely growth trajectories. So if a client came to me and said, ‘We’re thinking of withdrawing my wife’s super and setting up an SMSF’, I’d be able to work through all the pluses and minuses before they pulled the trigger. Questions like:
- How much do they have to invest? Anything shy of half a million and you’re wasting your time with an SMSF.
- What’s their investment strategy? In a volatile market, a diverse portfolio of shares and other assets allows you to spread your risk. To build a truly diverse portfolio you need more than $500,000. Try $2 million, for starters.
- What’s their appetite for risk? Commercial property seems a safe investment, but is it? Don’t get me wrong, I love commercial property, but it’s not for the faint of heart. Could you go for 12 months without any rental income? I’ve seen it happen. What about the stock market? Canny investors have made big gains in the bull market, but the bears are bedding down for a lengthy hibernation. What does this mean for my clients’ portfolios?
- What are their future aspirations? How much super do they need to retire, and what’s their target date? Will the sale of their business be enough to fund their dreams?
As you’ve probably guessed, this won’t be a quick conversation. In fact, it might be both long and tough. Some balloons might need to be pricked. But because I know my clients, know their businesses, and care about their futures, I’ll give them all the time they need.
So how’s it working out for the couple who just joined me? The commercial property in the wife’s SMSF looks like a winner. They’re headed in the right direction financially. And they can rest easy knowing that their SMSF is meeting all its legal obligations!
The ATO and Your Family Trust
Right now, the ATO is going after family trusts in a big way. My motto for my accounting clients is ‘No surprises’, which means dotting all the I’s and crossing all the T’s on your trust returns. And the ATO pulling out the big guns means no detail, however small, is overlooked.
Here’s something you may not know. Your trust is required to minute the distribution of trust income before the end of the financial year. If your accountant does not know your profit forecast by 31 May, you’re in trouble. If your accountant does not have a system which generates compliant, timely minutes for your trust, you’re in trouble again. So, ask yourself, is my accountant my financial concierge? Because if he’s not, that may be the tax auditor you hear knocking at your door.
It’s too late to fix this problem for the 2021/22 financial year. But it’s not too late to enlist a financial concierge to create the long-term business and lifestyle solutions you need for the years to come!