So, here we go:

1. ASIC is relaxing rules for accountants to give advice on access to Super. With the Federal Government opening up early access to superannuation for some Australians attempting to navigate the COVID-19 crisis and the economic hardships that have emerged as a direct result, the regulator has relaxed rules enabling accountants to provide advice on superannuation access for clients. Last week we covered some of the reasons why it might not be a bad idea to take out up to $20,000 over the next two years. But this move to enable accounts to move into what is traditionally a financial advisory area of expertise has opened up a can of worms. “The accounting and financial planning industries have been at loggerheads for a number of years over advice that can be legally provided to self-managed super fund investors.” What do you think? Will this help clients make better decisions or is it a risk?

2. The old “dead cat bounce”. The market swings of the past month have created anxiety for all investors but don’t be fooled by recent gains warns Forbes contributor Peter Cohen. In his column, he outlines 5 reasons why recent gains are actually a dead cat bouncing including that Coronavirus struck an economy that was already on weak foundations, confidence levels around the world are waning, building, retail and travel have all plunged, unemployment has skyrocketed and we have no clear plan of how to climb out of this mess.

3. The government has extended the SME loan guarantee scheme through non-bank lenders. As Mortgage Business reports, the scheme provides eligible small businesses with access to up to $250,000 in unsecured funding for up to three years, including an initial six-month repayment holiday with accrued interest to be amortised over the remaining course of the loan. By opening the program up to non-banks, it’s expected businesses will be able to access the funds even faster. More here.

4. Stuck at home? So are Chris Ridd and Tim Munro. In this week’s episode of myprosperity@home the Change Accountants Founder and Tech Investor talk about how they’re setting up staff to work remotely including building constant feedback loops and a few practical ways to help clients navigate COVID-19. Full episode is here.

5. Need a new iPhone but a little short on cash right now? Check out the new iPhone from Apple that won’t drain your bank account.

That’s it for this week. Stay safe, and stay home. 

The myprosperity team

In episode three of the myprosperity @home series, Chris Ridd sits down with Mark Malone of Birling Wealth Management to talk about how Mark’s coping managing his advice business from home with a particular focus on how market foresight and client preparation around this has helped Mark successfully navigate his clients through the fallout of COVID-19.

Before the realities of COVID-19 had impacted the Australian economy, Mark had felt that the economic landscape was open to another market shock and had been managing his clients’ finances with a conservative approach. The majority of his clients are retirees and had seen the impact from the 2008 GFC. With this hindsight in mind, Mark explains that his clients “really see the merit in taking that conservative approach, as do we.” and that “the GFC did us a favour because it’s really prepared my clients for this event.”.

The hindsight of the GFC worked in their favour, as Mark and his staff were able to safeguard their clients from experiencing any major loss during this time. His clients have been well prepared for these economic conditions, as well as the digital shift we’ve all had to take on as we now work our remotely from home. For some time now Mark has been actively digitising the way he runs his business, implementing digital workflows such as document signing, screen sharing and teleconferencing to make his business more efficient. This preparation has seen Birling Wealth Management go 100% paperless and be more than prepared for the transition to work remotely, from home.

Healthy preparation doesn’t just stop at Mark’s clients’ finances. When asked what tips Mark would give an advice business during this time he urges everyone to get into pilates, as it’s an easy, mobile form of exercise that anyone can do in the office or at home.

You can watch the episode in full below.

Now is an ideal time for advisers to work with their clients to shore up the financial picture of their elderly parents. In this week’s blog Chris Ridd talks openly about how he has recently helped map his own fathers’ estate using myprosperity as a safeguard in these uncertain times and amid the biggest health crisis in a century. To support this, myprosperity has just announced the release of a Covid-19 kit for advisors which includes a wealth check digital form, once-off bank feeds, wills and executor kit on Starter accounts.

Do your clients have their parents’ estate sorted?

With the world of business going into hibernation and everyone now forced to work from home, just about every aspect of our professional life has been thrown into turmoil. You hear stories and experiences from different people about how they are coping in this new remote world where “social distancing” is now a strangely familiar term in our vernacular.

As Covid-19 threatens the lives of our elderly citizens, you have to face the reality that as advisers, your clients more than ever need to know the state of their parents’ financial affairs. In the tragic event that your client loses a mother or father during this terrible pandemic, the last thing they will want to have to deal with is understanding the state of their financial affairs and trying to piece together all the details. This may seem obvious but it is surprising how loose the financial picture of our parents can be and there just never seems to be the right time to get it sorted. Well now is clearly the right time.

To put this into a personal context, I have recently addressed this very issue with my own father who lives alone and is aged 85. My father is very astute and, for his age, is as sharp as a tack. We regularly have conversations about the state of the tech industry, the share market, economics and various other business topics. He is mentally very active. Having said that, and like many elderly men, one visit to his garage and you will quickly realise he is a hoarder. Trying to find stuff in that crazy mess would take months to sift through and sort out. Recently I became aware that his financial records share similar attributes.

That’s not to say he is not financially literate. As a former accountant and compliance auditor in the financial advice industry, he is certainly among the more financially informed. The issue is more around the fact that if anything happened to him, trying to locate the finer details of his estate would be nearly impossible. He knows where everything is, but that’s the problem. Only he does. His home office resembles a paper version of his garage. Imagine trying to locate the will, power of attorney, property trusts, not to mention logins to share portfolios and other undisclosed investments or collectables that make up the estate. It would be like trying to locate the missing petrol cap off the old lawn mower that sits in the back of the garage under a pile of boxes full of obscure tools and photo albums. Yep, needle in a haystack kind of stuff.

So, as a self-proclaimed superuser of myprosperity, I set out to map my father’s entire estate. Now, admittedly, we commenced that process back in late 2018, but like many well intended projects, we just never quite got around to finishing the task. However, when a global pandemic was announced by the WHO on 13th March, I received a calm but pointed call from my dad who suggested that we should probably get on and complete the exercise. So we did. And I’m proud to say we did it remotely (observing social distancing) over Zoom using screen sharing. Coupled with the ease of using myprosperity, and I am the first to say that in the past 12 months the user experience has gone to a whole new level, we mapped his entire financial position in just under 30 minutes. That included cataloguing all assets and liabilities, bank accounts, shareholdings, property, insurances, his motor vehicle… everything, all wired up in real time so it will always be up to date. He also added over 30 documents that he deemed important for us (4 children) to have access to in the event that we had to wrap up his estate.

If there is one thing I observed through the process, and you will find this when you start getting your clients into this exercise, it’s that it becomes addictive. My dad, as much as I love him, is a procrastinator. In fact most of us are. We put things off. And that is what happened last year and we never got to complete the task of mapping his estate. But once I got him going in myprosperity he jumped in boots and all. He enjoyed getting everything mapped and gained satisfaction from knowing it was all there. I was even getting text messages from him through the week as he thought of new things to add and was proudly putting them into the platform.

As proof of the pudding, my brother, formerly a successful financial adviser himself who exited the industry in 2018, and also the executor to my father’s will, reviewed the wealth portal: he was blown away with how comprehensive the system was. In his words “ hopefully dad will be fine and get through this Covid-19 crisis, but if anything happens, this has literally saved us weeks of pain in knowing where the entire estate is at”. That’s peace of mind… and you owe it to your clients to get them to do the same for their parents.

To make this even easier for advisers to get proactive on this, myprosperity has now launched the Covid-19 Kit which allows advisers to get the elderly parents of clients setup in the portal with a simple digital form, free document storage, once-off bank feeds and a will and executor kit as part of the free Starter account.

Written by Chris Ridd, Director of myprosperity

Episode two of the myprosperity @ home series see’s Chris Ridd sit down with Tim Munroe of Change Accountants and Advisers to discuss how Tim’s coping managing his wealth management business, as well as what technology he’s had to adopt to survive and the initiate he ran that ended up being a huge success.

Like most advice based businesses in these times, Tim had to quickly transition Change Accountants and Advisers to a working remotely and digitally situation following the lockdown restrictions imposed in the wake of COVID-19 outbreak. Being the type of person who likes to be on the forefront of technology, this wasn’t a huge hurdle for Tim and his staff as they adopted digital platforms to help coordinate internal communication and meetings. Traditionally face-to-face meetings were king at Change when working with clients, but now Zoom has stepped in to facilitate all client meetings. 

AI powered technology is also helping Tim maintain visibility over his staff’s morale whilst they work from home. Tim simply sends out a pulse each day for this staff to fill out and using AI driven technology, insights can be pulled out of that information, giving a window into how staff are feeling and what feedback they may have.

When asked about the challenges his clients have faced over the last 8 weeks, Tim goes on to explain that he has two client groups at the moment. One group will continue with the status quo, behavining in similar ways to how they normally invest as they haven’t been directly impacted largely by this event. The other group are those who had investments in heavily impacted industries like hospitality or retail, and are feeling the impacts of this event quiet harshly. The approach Tim has taken to advicing these clients is using a term he coins ‘practicaly positivity’, meaning that clients need to take the easy, practically steps they can now to secure their wealth as much as possible, rather than waiting and holding on. 

Tim also took another proactive approach when giving advice. Tim noticed that there was an information gap for accountants amid the fallout of COVID-19, and that a pack focused on business continuity for accountants could be potential hit. “We’ve always promoted at ChangeGPS collaboration, not competition. Let’s share ideas and let’s help each other so the average person is better of, to help Australia.”. Tim successfully packaged this advice into a document that’s been downloaded over 2,000 times and ran a webinar that was attended by hundreds of accountants from across Australia. 

You can watch the full episode here.

So, here we go:

1. The AFR’s wealth editor Aleks Vickovich published a stellar long-form piece looking at how advisors are moving their businesses online but are still drawing in compliance with one advisor saying “change is coming, whether government-instigated or not.” This transition is happening at a time when the corporate regulator has acknowledged a growing and worrying advice gap where there’s a diminishing supply of advisors. “More than 4000 advisers abandoned their authorisation in 2019, representing a 15 per cent reduction in the total workforce.” – You can read more here.

2. This is opening up a once in a generation opportunity for advisors – Demand for solid advice is unprecedented. With record low interest rates affecting investors, record household debt, an increasingly complex tax system to navigate and continued changes to superannuation it’s no surprise household financial stress is at an all-time high. Basically, more households need help than ever before. On the supply side, the number of advisers is shrinking fast. So, history tells us when you have a market with high demand but shrinking supply it is one of those once in a generation opportunities most only realise with hindsight. Firms providing clients with a clear strategy and peace of mind rather than just pushing a product will win. We live in a world where it’s not the big that eats the small but the fast that eats the slow. And there are some amazing client-centric boutique firms that are moving fast. These firms have historically believed in delivering advice with a fundamental focus on acting in the client’s best interest so the Royal Commission has had little impact on their approach. In fact, it has validated their business model rather than caused disruption. The result has been increasing referrals from existing clients and record growth.

3. Investors are more spooked by COVID-19 than the GFC. We’re in unknown territory right now – consumer confidence has fallen through the floor. But, data suggests Australians are flooding back into the sharemarket – largely buying undervalued blue-chips or betting on whether companies will hit it big or drown during these uncertain times. More in Jack Derwin’s piece on Business Insider.

4. Working with small business clients? MYOB has put together an awesome business preparedness guide here. It covers off everything small business owners need to navigate the COVID-19 crisis.

5. Hundreds of thousands of Aussies interested in early super access. With Roy Morgan suggesting the real unemployment rate is at 16.8%, many Aussies are struggling. The ATO released stats showing many are considering accessing their super with 361,000 registrations of interests made to the tax office. Early access to super isn’t available until April 20 and there have been plenty of advisors warning their clients against taking out the funds which is about $20,000 over two years. Funds that could be worth over $150k in 30 years time. More on why accessing your super early could be a bad idea in the long run here.

That’s it for this week. Stay safe, and stay home. 

The myprosperity team

In episode one of the myprosperity@home series, myprosperity Director, Chris Ridd, sits down with Integral Private Wealth Founder and Chairman, David Simon, to discuss how David is coping managing his wealth management business remotely from home amid the fallout of COVID-19.