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Forward Thinking Magazine : April 2011
51 cash Written by Marisa Hughes, Macquarie Adviser Services ... it’s a cliché, but if you don’t have cash coming in you can’t meet your goals and objectives during the wealth accumulation phase. It’s integral, it needs to be offered... Sam Hunt, Como Financial Services The road to financial freedom The Australian economy may be in its 20th year of economic growth1 , but we still have a long road ahead to financial freedom. Australians currently have one of the highest levels of debt among comparable countries2, and while our disposable income per person increased 13 per cent during the last three years, our net worth fell by seven per cent3. Getting the basics right can help your clients reach their financial goals more quickly. Making more money will not help build your clients’ wealth unless they are managing their cashflow so that it grows – and that is where you can add real value. Sam Hunt from Como Financial Services has been offering a cashflow service almost since their inception. “A lot of financial advisers just focus on investment advice,” he says, “It really needs to be a holistic offering and cash is king – it’s a cliché, but if you don’t have cash coming in you can’t meet your goals and objectives during the wealth accumulation phase. It’s integral, it needs to be offered.” Peter Wilson, CEO and founder of Your Personal CFO Pty Ltd explains, “businesses constantly collect and analyse financial data in order to make informed decisions on managing for their success. This process should be no different for individuals. They need to understand where their money is being spent and how savings can be made. This information is critical for the development of a robust financial plan.” The heart of your practice Managing cashflow can be a key component of your ser vice offering and help grow the value of your business. Fiona Mackenzie, Senior Practice Consultant, Macquarie Practice Consulting, observes that; “Post-GFC, we are sensing a subtle shift towards more prudent spending and saving by both younger clients and baby boomers. Those practices offering a formal cashflow management solution are finding the ‘back to basics’ conversations deepen their relationships with clients and lead to better retention and referrals. The key then is to ensure the service offering is appropriately positioned and priced, and then delivered efficiently through smart use of technology and processes.” John Stinson, WB Financial Peter Wilson, Your Personal CFO Pty Ltd 1. Reserve Bank of Australia (RBA), August 2010. 2. Melbourne Institute, Household financial conditions index, September 2010. 3. Australian Bureau of Statistics, Australian system of national accounts (cat no.5204.0).