Kristal and Olivia from Coastal Lawyers sat down with Ryan from Strateqic Advisory to talk about how financial planning and estate planning go together like shoes and socks. 

IS YOUR ESTATE PLANNING IN ORDER?

WILLS. POWER OF ATTORNEY. ENDURING GUARDIANSHIPS  

Coastal Lawyers can assist you with all your estate planning needs. What exactly is estate planning? Think wills, power of attorney and enduring guardianships. Not exactly sure what any of this means, or why it is so important? Then book in a free 15 minutes discovery call with our dedicated estate planning lawyer Olivia, who can explain estate planning in simple language and provide you with a fixed fee quote to get you on your way to having peace of mind that your estate planning is in order. 

Transcript from a video between Coastal Lawyers and Strategiq Advisory 

Ryan Bultitude: Generally the way that I position financial planning to clients that do come in here is that there’s a flow and a process to financial planning, and rather than just block different elements of financial planning.

Ryan Bultitude: The way I see it is that, keeping it very simple, is that in the shorter term when you’re younger, it’s very simple, and it’s like having an investment portfolio that’s ultimately going to be property, that is the common one, shares, managed funds, which managed funds are just safer, a safer pile of shares put together for diversification. But generally, it starts with the short term investments, right?

Ryan Bultitude: The aggressiveness of a short term investment depends on time. So if you hold an investment for greater than five years, you’ll have more tolerance to risk. And then what you do is you deploy that same simple investment philosophy, which ideally is more property and managed fund based, so you’re not as much of a trader of shares. And then you do the same thing with your super, as you mentioned, and you’re using industry funds, you’re using retail funds for more opportunity to invest in a bit more risk or a bit more diversification again, and then SMSF’s is where you get to do property. So you get your investment ideology right from the start, and that’s learning, it’s learning how to invest, in what I can invest in, and what else can I do when I’m not able to do property, that’s the simple concepts that I talk about. And then we have an investment strategy that we believe in and that we feel safe in and it’s for the short term, and it’s also for our retirement. Then what happens is I then position or I strategize or educate with insurances. And why insure? Like, why do we insure? And the misconception is most people insure assets, but they don’t insure themselves. And then their self is the biggest asset that they’re ever going to have.

Ryan Bultitude: And it’s understanding how do we insure simply, which is the big bit. And because there’s such bad stigma of insurance salesmen and bankers selling insurance, and what we’ve known as “vertical integration”, selling your own product, no one wants to go down that insurance path. But the thing is, that’s why I actually got into financial planning, was because of insurances. Because back in 2016, it was mandated that accountants become RG146 registered as financial planners, right? Because they were giving and setting up SMSF’s. So I got scared by insurance and then I was like, I need this for my family, and I had a wife and now I have a kid, so insurances are the thing that protects you. The life insurance is going to protect you if you’re dead, so what happens is your dependents, your spouse, and your kids will be protected by your income until they’re 18, the kids are 18, right? Or by your debt level. So that they can maintain that initial wealth that we set up when we were investing, either for the short term or the longer term, so that, that wealth stays as it is, and if anything gets better. So the life insurance and the TPD, or the disability insurance, are very much the same thing. They’re covering our debt, and they’re covering our replacement of income till our kids are 18, because the reality is we won’t generate an income again. They’re both permanent events. And then trauma insurance is obviously if anything traumatic happens, it knocks us out of work for a couple of years, be at one to three years, from one of the big ones like cancer, stroke, heart attack. They cover our salary for one to three years, And then there’s income protection, which is just 75% in salary. So insurances will cover your wealth so your wealth never goes down. So first you get your investment strategy right, for the short term and the long term, personally and in super, then you insure it or you insure yourself, so you insure your wealth for your family doesn’t be depleted. And then the way I see it is that once you have your investment philosophy right, once your investment philosophy is protected by your personal insurances that are underwritten for the husband and the wife, and for the husband and the wife and the kids, then you’ve got to get your estate planning in check. And the way that I see estate planning is like you said before when we were speaking, is having binding nominations in place. So you don’t need to revert to a will. You can go straight to the spouse. And that super or that insurance policy will pay directly to the spouse. And then estate planning is of utmost importance, because if you’ve got your investments sorted and you’ve got your insurance protection sorted to cover your investments, then the most important thing that you could possibly do is ensure that generational wealth is in the correct hands moving forward and it’s directed to who’s it meant to go. Like, yes, the binding nominations will determine where the super and the insurance policies go, but the other residual wealth, what happens to that? You know, what happens to properties? Who does it go to? And then in the event that, for example, a husband and a wife both pass, now we’ve really got to consider where this wealth goes, where these bonding nominations go, where this property goes, where this portfolio of investments go. And I think that’s why estate planning is just so paramount because otherwise the whole thing unfolds and goes to the wrong person or the wrong family. So that’s how I contextually, position financial planning, it all has a flow from very short term investing to longer-term protection with insurances to where the actual estate goes.

Olivia Stern: You covered it really well Ryan, there’s all different pockets to this overall strategy, and I think that we’re just getting into more debt these days. And I think there’s a requirement now when purchasing assets like property when we’re buying homes that, we really need to be looking at life insurance. So we’re forced to sort of deal with these different things much more regularly than we used to. And you also mentioned super, and that’s something that we can forget about, but it’s something that we really need to be looking at and making sure that, we’re on to where our supers at, and are our binding death benefit nominations up to date. And that’s, that’s the document in estate planning, that’s directing the trustee of your super where to pay, and as you were mentioning, it could go straight to the spouse or it can go straight to another dependent. And having that in place means that in the event of something really terrible happening, you’re not having to deal with the will. And the process of proving the will, these things like life insurance, these things like super, can be dealt with quite quickly, quite swiftly, and manage those things like big debts and make sure that your loved ones that you’re leaving behind have that support there. So it’s really, really good to explore that link between estate planning and financial planning in this way, because I have a lot of clients that aren’t sure why estate planning sometimes requires the professional support of a financial planner. So yeah, covering these topics is a really, really interesting thing.

Ryan Bultitude: And it’s almost mandatory from my side, that financial planning must encompass estate planning. It’s not like we can just singularly go financial planning and then estate planning is another module or another thing, it’s like you can’t be a holistic financial planner, cover investing, cover superannuation, cover the tax implications of both, and then sort of just go, don’t worry about estate planning, we’ll just leave that for a couple of years. Because at the end of the day I feel, and this is a personal belief, this isn’t general knowledge is my belief, I believe there’s like a hierarchy to this, And it goes from like, investing is very important, right? And then the insurance protection of the investing is even more important. And then I think the estate planning of the insurance and of the investment is even more important because it’s like it falls over, like why would you invest short-term, long-term then insure your investments, then get to the estate planning and all unravel. It’s like, “oh, well it was all for nothing” because at the end of the day, when we pass, we leave with nothing. But the generation after us acquires that wealth. So for me, I believe it’s all integrated.

Kristal Naividi: Yeah. It’s about leaving that legacy, isn’t it?

Ryan Bultitude: It is.

Kristal Naividi: That’s what we all want to leave this earth, leaving some sort of legacy. And so if you’ve worked so hard, you know, spending time away from your kids or making sacrifices to create all of this wealth to pass on, then the risk is, is that it won’t pass on. And from, you mentioned trauma insurance, and from my perspective, personally, it’s so incredibly powerful to have that. When my husband was diagnosed with testicular cancer a couple of years ago, we were so fortunate to have reviewed our insurances and had trauma insurance. And that meant that we could just focus on that time on the actual situation we were in, rather than stressing about money or different things like that. So, yeah, I think insurance is one of those things, we kind of just think, we’re either underinsured or don’t even realize you can be insured for a particular aspect.

Ryan Bultitude: And the worst thing is, I’ve had clients that weren’t necessarily financial planning clients, but they were accounting or taxation clients that were middle-aged, okay, and a traumatic event happened, cancer, okay, and they were in the process of getting insurance. So they were aware of it, they were for it, I had taken over an engagement for example, and said, “you need to be insured”. And then they got it, and then they can’t get insurance. So the bugbear or the pain associated with insurance is if you don’t get it when you’re young before stuff starts happening as you get older, you won’t get insurance. Your wealth diminishes or depletes, even if you have a very good investment strategy. And I suppose the anger point, which you can probably tell in my voice right now, is that for so long, “guru sales guys” or insurance companies have flogged insurance, because it was all commission-based, right. But the harsh reality is the insurance is so paramount and so important because it does protect everything. It does protect that estate planning. So it’s like, we’ve just got to educate. So people are almost able to get insurance their own way. They know the ins and outs, they know the PDF’s and the disclosure statements, and they know what they really need to be protected, but I just, it really bugs me, I don’t want them to, something to happen and they’re like, “I wish we would have had insurance because it would have changed our lives”, and that’s the same with the estate planning component, and that’s the same with investing as well. I’ve had a lot of pensioners or pre-retirees that are like, “I wish we had got advice earlier.” And so what I say to them is, even if you couldn’t have paid for advice in your twenties or thirties, you should have been and gone and educated yourself to be your own financial advisor, and good things like the Barefoot Investor, that kind of books are good, but they’re also missing a lot in the scheme of things because they are very generalized and not specific in nature. So anyway, I think it’s everyone’s responsibility to make themselves financially literate because these different modules like investing, basic investing, basic insurances, and basic estate planning can be kept very simple.

Kristal Naividi: And it can be done affordably too, can’t it Ryan? I mean, it’s not like this is only for rich people or people who have multi-million dollar assets, it’s for everybody, and it’s something that everybody should be looking into. And I know life gets in the way, kids get in the way, you put it at the bottom of the pile, but then, you know, when something goes wrong, you’re going to wish that you had looked at it all.

Ryan Bultitude: Yeah. Because it’s old, I don’t have time. But you gotta have time because if you don’t have time, all the things that you do are gone. All the effort you put in, it’s gone, it’s dust. And so, I think it’s what you said, Kristal, you’re right, there are two types of advice to keep it simple. There’s general advice and then there’s specific advice. And you can get away with a fair bit of general advice without having to pay too much money. And that general advice could be understanding how to invest or just generally understanding how to insure, or understanding what super options I have, or general understanding what my estate planning options are. And then when it gets into product, like what insurer I’m to use, or what investment platform I’m to use, or what industry or retail super I’m to use, or how to consolidate my super, yes, there then becomes a fee to do that. But the best bit is that that fee will usually cover you to do them all together. So you have a personal investment portfolio, you have your super invested and consolidated properly, you have insurances underwritten to your health standard to cover your wealth, and you have the estate planning that’s going to cover the whole thing and where it goes in the future. So yeah, you’re right. There needs to be more education around that and how it works

Kristal Naividi:  Amazing. Thank you so much for talking to us about all of that and how do people get in contact with you?

Ryan Bultitude: My business is Strategiq Advisory over in Erina. So jump on the website, jump on Instagram, Facebook, send us a message, send us an email.

Kristal Naividi: Amazing, like us, you love the socials!

Ryan Bultitude: Absolutely. Thank you.

You can contact the wonderful Ryan Bultitude at 

(02) 4303 1076

engage@strategiqadvisory.com.au

WHO ARE COASTAL LAWYERS? 

Coastal Lawyers are central coast family lawyers. We offer representation in all areas of family law including divorce, parenting property and maintenance.