Financial planning is really about… bearing bad news

Some clients need a direct approach. They are on the road to financial failure, with a huge collateral cost for themselves and their families. Someone has to tell them. And that someone is you.

Sometimes it’s best to not be subtle or gentle. Just jump in and tell it as it is. That is, sometimes it’s best to be blunt.

For example, Dover’s 2015 Strategies CPD day featured Daryl and Sal. Daryl and Sal were 55, shared super of $120,000 and personal loans and credit card bills of $60,000 (at a rip-off rate averaging 12% per annum).

They rented a two bedroom flat, shared a car, smoked, and earned a combined $70,000 a year. Life was bleak, and Daryl was depressed. What would happen to Sal if something happened to him?

The answer did not lie in a new suite of risk insurance products.

The answer did not lie in switching their meagre super benefits from ‘Good-Enough Fund A’ to ‘Good Enough Fund B.’

The answer did lie in a referral to the (free) Community Legal Service and, ultimately, a voluntary bankruptcy. (There are funded financial counselling services throughout Australia. Financial Counselling Australia have a searchable website that will help you locate a counsellor in your area).

At the end of the three-year bankruptcy they had more money than ever before, and their super had grown to $150,000.

The end was now clearer, and happier. Stop smoking (we know it’s hard). Keep working. Manage your health. Maximise your super. And at age 68 withdraw your super, tax free, and buy a small home in a retirement village.

Daryl is no longer depressed. He knows when he goes Sal has somewhere to live.

The Dover Group