Chief Money Group

Introduction

We understand that the idea of seeking financial advice can be a daunting one. Passing the keys to someone else to come up with a strategy for your finances? That's a big decision.Well, to make it easier for you, we've written a sample case study of what it is like for a client to go through our financial advice process. Please note, that this is fictional, and whilst contains inspiration from real-life case studies, the characters and situation should not be relied upon as anything other than an illustration.Furthermore, the content is for informational purposes only and is not intended to offer tax, legal, or financial advice. The information provided should not be relied upon as the basis for any financial decisions. Each individual’s situation is unique, and results may vary based on personal circumstances.It is strongly recommended that you consult with a qualified tax, legal, or financial professional before making any decisions regarding your specific situation. This example is purely hypothetical and does not reflect any actual financial plan or strategy.

Finding an Adviser

T&P are both high income earners, who have tried working with a financial planner in the past.They approached Chief Money Group (CMG) to see if we are any different.They are both meticulous with their finances, already, and hence has already built a sizeable portfolio.T is the high-level thinker, and works in a sales role, whilst P is more of the family accountant – she is across the details and the family budget.P, whilst is a high income earner, has chosen to work part-time, as T is earning sufficiently as part of his executive role.They generally choose an adviser based on word-of-mouth referrals, but also take into account the advantage they’d receive by partnering with an adviser long-term.

The Initial Consultation

Prior to the meeting, T&P completed the Onboarding Fact Find provided by CMG. This allowed them to aggregate their financial world into one place, and it, itself, was a highly informative exercise.This also allowed their financial planner to get a full peak into their financial world so that he could be well-prepared for their meeting.During the initial consultation, CMG explained their business structure, their flat fee system, and how they handle relationships with their clients.T was initially very skeptical and fired off a lot of questions. How could we ensure that their outcomes would be better than if they were to continue forward with their own strategy? They were doing well already, and wanted to understand our point of difference.CMG shared its investment philosophy, but also provided insight into useful and practical insights about strategies outside of direct investment, which put T at ease.T&P felt safe and comfortable with CMG’s approach and decided to move ahead with the relationship.

Impact Presentation

Upon agreeing that there would be measurable benefit in proceeding with the financial planning relationship, CMG began putting together its impact presentation. To prepare for this presentation, CMG would first audit T&P’s financial position.The Impact Presentation meeting was booked 2 weeks from the initial consultation, to give CMG enough time to conduct its analysis. During these two weeks, CMG would collaborate with T&P to assess, diagnose, and prepare their impact presentation.During the impact presentation, CMG would share a financial modelling forecast to show the current trajectory of T&P’s financial position, followed by a proposed scenario and also some alternatives that have been considered.After ensuring that CMG & T&P were on the same page and happy with the proposed impacts of the financial plan, CMG would begin to prepare the full Statement of Advice.

Statement of Advice

The Statement of Advice is the official documentation that a financial adviser will provide to their clients.This is a legal document, that outlines the adviser’s recommendations, and the steps they took to ensure that their advice is in the client’s best interests.It will document the journey they took to come up with the recommendations, as well as outlining the fees and costs associated with the advice. It shows the alternative recommendations that have been considered, as well as the difference in costs between products.Upon guiding T&P through the Statement of Advice, CMG then ensured that they understood each element of the advice. CMG answered any questions, and let T&P consider the advice to see if they thought the advice would be in their best interests.Once T&P took some time to fully digest the advice, they agreed to proceed with the recommendations put forth by CMG.

Implementation of Advice

T&P were in the process of purchasing their own property, using a mortgage broker of their own choice.As part of our initial advice development, we collaborated with their broker to set up the right structure to ensure we could implement our strategy.What we had recommended was that they utilise debt recycling to reduce the amount of non-deductible debt and increase their deductible debt.We helped them achieve this by selling their existing portfolio, as well as vested company-issued shares, and paying down a large portion of their mortgage.A portion was used to pay for the home deposit, settlement fees, and the remaining was used to pay down a portion of the variable loan component.We then advised the client to redraw the amount from their loan, and invest it into a recommended portfolio. The new loan that was created from this withdrawal became a tax-deductible loan – hence this strategy is called debt recycling.We helped the client establish an account and invest into the recommended portfolio, and shared details about it with them.Next, as the platform we had recommended had competitive rates, we helped them rollover their super funds, and update their investments to a recommended portfolio aligned to their risk profile.We conducted an insurance review for T&P and found that T was underinsured for TPD & Critical Illness cover, whilst P was underinsured in terms of Life, TPD, Critical Illness, and Income Protection. We helped them apply for their respective covers, at the recommended amounts.

Ongoing Advice Review

After implementing the advice for T&P, we caught up again in a few months as T had some shares as part of his employment that were vesting soon. We reviewed his employee share vesting schedule, and had some ideas of how we could reduce his tax liability in the financial year that they were vesting.A few months later, we then caught up with both T&P for their first 6-monthly advice review to review their portfolio’s performance following the implementation of our advice.

Want to Learn More?

If you want to learn more about our ongoing advice process, then please don't hesitate to book in a call with us!

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