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- Young achievers: Caleb Dozzi, Dozzi Financial Advice (Brisbane)
- Pre-retirees: Philip Harvey, Construct Wealth (Canberra)
- Women: Philippa Hunt, Seachange Strategic Investments (Sunshine Coast)
- Responsible investing: Fiona Thomas, Ethinvest (Sydney)
- Aged care: Jacie Taylor, Periapt Advisory (Adelaide)
- The bottom line
Whether it’s down to their age, personal interests, or the types of people they attract, many financial advisers develop specialties.
So when you go in search of a financial adviser, don’t just look at the menu, check out the chef. Look for someone who speaks your language and understands what you want to achieve.
We’ve spoken to a handful of advisers with special areas of interest and expertise. These are not recommendations, but an illustration of the range of services and approaches on offer.
Young achievers: Caleb Dozzi, Dozzi Financial Advice (Brisbane)
Caleb Dozzi has won awards for being a young achiever, so it’s only natural that his firm attracts other young achievers.
After starting his firm three years ago, he found he was gaining traction with people aged 30 to 45. These are older Millennials (the oldest are now 39) and younger Gen Xers in their early 40s. They have built some financial strength, but they have big decisions to make around having a family, buying their first or second property, maybe starting a business.
“They’re looking to build wealth over the next 10 to 20 years, it’s not so much about retirement,” he says. A lot are interested in property, as a home or investment. They are preparing to take on significant debt and want help with budgeting and cash flow.
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Dozzi says many of his clients run their own business and want to avoid making poor decisions in their personal finances that might jeopardise their business, such as drawing too much cash. They are also experiencing challenging business conditions for the first time with the disruptions caused by COVID-19.
He says some are making the most of these difficult times to improve their cash flow management and ask about investment opportunities.
While super is not a top priority for this group, Dozzi says he points out that good decisions they make now will have a relatively low impact on their current lifestyle but could have a big impact on their retirement.
If they can’t afford to make extra personal contributions, he encourages them to review their investments, fees and insurance so they have a good grip on what they are doing with their super and why.
“This gives them confidence that they are managing their wealth and that their retirement is on track so they can get on with the day-to-day,” he says
Pre-retirees: Philip Harvey, Construct Wealth (Canberra)
Phil Harvey says around 90% of his clients are pre-retirees aged 35 to 55. “I like helping people by making a big difference and I can’t make such a big difference if they have already stopped working.”
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He says a lot of clients come in after a milestone birthday and say they are starting to think about the next phase of their life and how to set themselves up over the next 10 years or so.
While there is a financial side to the advice he offers, such as reviewing super and insurance, there is an equally important non-financial side. “The first part of our process often takes around three, four meetings where we talk about what’s important to them,” he says.
“I ask what you think your life is going to be like when you retire? Do you want to buy a Winnebago and tour Australia, travel the world, or simply spend more time with family? Sometimes people surprise themselves.”
For example, when he asked a client if she would like to do more overseas travel, she gave an emphatic no. But when asked what she would do if money was no object, she said visit friends who lived overseas.
Harvey says many of his clients are public servants in a government super fund’s default accumulation account and are surprised that these are not necessarily low-cost options. He says by choosing a fund that allows you to build a portfolio with index funds you can reduce total fees to around 0.35% a year. “If someone is 40, they can save an enormous amount, but not so much if they are in their 50s.”
He gives the example of a couple in their late 30s. “Simply by getting them into the right super fund and investments will save them around $500,000 in fees over the next 22 years,” he says.
They wanted to buy a house, put the kids through university and not have to work for income past age 60. So he put a plan in place to achieve that, mapping out when they need to start saving for the kids’ education and when the mortgage should be paid off if they are to achieve their long-term goals.
“This gives them a reference point to mark their progress and peace of mind to make decisions such as buying a house, knowing they have the financial resources,” he says.
Women: Philippa Hunt, Seachange Strategic Investments (Sunshine Coast)
Philippa Hunt is passionate about helping women achieve financial independence. After almost three decades of compulsory super, women still retire with less super on average than men and are more likely to experience homelessness and poverty.
“I’m trying to assist women to become financially independent, but financial advice has become so expensive most women can’t afford it; it’s dispiriting,” she says.
This has led Hunt to supplement her financial planning practice with online financial literacy courses, combined with support and presented in a language that women respond to. With a background in psychology and large financial institutions, she believes women have a different language around money.
Most of Hunt’s female clients are aged 45 and over, looking to retire on Queensland’s Sunshine Coast. “It’s not until the mid-40s that women think they had better get serious about their finances. They may have a property settlement, or an inheritance, and wondering what to do with it.
“The first thing I ask is: What sort of retirement would bring you joy? Not what do you need. You have to get women excited about achieving their vision, otherwise life is joyless.
She says the common theme with women and super is they don’t have enough, and don’t earn enough to make catch-up contributions. So she talks about tracking their spending (never budgeting) and the power of making small regular contributions with the savings. (She says the word budget makes women want to rush out and spend, just as mention of diet makes people want to reach for the Tim Tams.)
With COVID-19 job losses affecting women disproportionately to men, she has also started talking to women about setting up a side hustle. Even small amounts earned from an online business can be added to super or used to supplement the Age Pension in retirement.
Responsible investing: Fiona Thomas, Ethinvest (Sydney)
As more investors seek to align their investments, and their super, with their social and environmental values, demand has increased for advisers who understand their concerns.
Founded in 1989, Ethinvest was the first financial planning practice in Australia to have an ethical or responsible investment focus. Today it belongs to an Ethical Advisers Co-operative representing about 20 firms and 30 advisers around the country.
Ethinvest adviser, Fiona Thomas says their clients are mostly older pre-retiree and retirees. Many have their own SMSF, family trust or portfolios of inherited shares.
Thomas says there is a lot of “greenwash” among super funds and managed funds more generally, where ethical or sustainable options are similar to their mainstream portfolios.
“They are often full of mining companies that many of our clients want to avoid,” she says.
“Greenwash is a real issue for a lot of new clients who come to us. Often they have gone to their existing adviser and not got far, or looked at (big fund managers’) sustainable options and found them not too different from their regular offerings,” Thomas says.
Ethinvest builds portfolios of direct Australian shares blended with income securities and mostly managed funds for international exposure. They have in-house researchers who rate investments according to whether they do harm or simply avoid harm, or are actively involved in activities that benefit people and planet or contribute to solutions.
For people who don’t have an SMSF and don’t want the cost or hassle of starting one, Ethinvest sets up individually managed accounts (IMAs) on super investment platforms HUB24 or BT Panorama.
Aged care: Jacie Taylor, Periapt Advisory (Adelaide)
The complexity of aged care services and fees is not for the feint-hearted, yet people are often forced to make quick decisions about their own or a loved one’s move into aged care in the middle of a medical emergency.
There are financial decisions about whether to pay a Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP), whether to sell the family home and how other assets will impact means-tested fees.
While aged care advice is not the bulk of her work, Taylor says many of her clients have parents who need aged care. So she did extra training to learn as much as she could about our aged care system and how care is financed.
Often clients have done some legwork already, but they want to know if they should sell the family home or if their loved ones can afford aged care. They may be an ongoing client or a new client who wants one-off aged care advice.
“I generally advise them to find an aged care facility that is right for them, rather than worry about what the RADs and DAPs are going to be. You don’t need the full amount of RAD and you don’t necessarily need to sell the family home, especially if someone still lives there.”
Taylor says there are a lot of misconceptions about aged care and despite recent revelations at the Royal Commission into Aged Care we have a good system. “If you don’t have a lot of money, the system will still take care of you. I reassure people that it is going to be affordable and that they don’t need to have hundreds of thousands of dollars at the end of their retirement to pay for it.”
Getting good, timely aged care advice cannot only save you money but it may save you a lot of worry as well. Just be sure to look for an adviser with aged care expertise.
Financial advisers are as varied as the people they serve. So if you are thinking about seeking financial advice, it’s important to find an adviser who speaks your language and understands what you want to achieve.
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