We join forces with Equity Mates for a chat about advisers, insurance and predictions…

Candice: [00:00:11] Hello and welcome to talk money to me. This is your need to know financial podcasts. Thanks so much for joining us. I'm Candice Bourke. 

Felicity: [00:00:18] And I'm Felicity Thomas. Now, today we have a really, really exciting episode. We've actually done a crossover with the Equity Mates team, Alec and Bryce. 

Candice: [00:00:27] Exactly. We were super pumped to sit down with the guys because, as you know, we're celebrating on a week long celebration of our one year anniversary here at Talk Money to me. So really great to get to sit down with the guys and have a chat about what we've learnt, you know, doing podcasts, the order pad as always because that's our favourite episodes and we know you guys love it too and we kind of delve a little bit into the markets and opportunity that we're seeing right now and we sort of somehow end up talking about property in the metaverse, right? 

Felicity: [00:00:56] So that's it. And we actually spoke a lot about financial advice and the importance of financial advice and how to actually find the right financial advisor. So very excited for you to listen to this episode. Now, remember, our chat today is not considered personal advice, even though we're registered advisors at shore and partners. Please note that the podcast and the content discussed does not constitute as financial advice, nor is it a financial product and everything is accurate as of the 13th of September 2022. 

Candice: [00:01:27] All right. So we're super excited to bring you this special episode. Let's listen to our chat.

Bryce: [00:01:32] So we're excited for this episode because Candice and Felicity are both professional financial advisors, and we're going to take the opportunity to ask some common questions that we get from our audience that we often aren't at liberty to discuss. But given that you guys are both doing this professionally, we thought it would be a good opportunity. So if you haven't listened to Candice and Felicity before, make sure you go and sign up to talk money to me. They are both financial advisors at Shaun Partners and Candice is a senior investment advisor. Felicity is senior private wealth advisor and together they're passionate about improving financial literacy and closing the retirement gap between men and women. So plenty to unpack here today. And a reminder that while Candice and Felicity are licenced financial advisors, Ren and I are certainly not. So nothing that we say should be taken as advice. And while Candice and Felicity are licenced, they are not aware of your personal financial circumstances and nothing they say should be taken as personal financial advice. [00:02:31][58.3]

Alec: [00:02:31] That's the hardest part of our job. Now we get to turn the attention on you and ask you all the questions that we can't normally answer ourselves. But before then we want to try a bit of a game. We're calling it this or that, I guess just to get a sense of what you're interested in as investors. But let's start this or that. We want you to choose which one you would prefer, stocks or property. And Candice, why don't we start with you? [00:02:59][27.6]

Candice: [00:02:59] Okay. Well, I'm going to go with both. I know it's a bit of a cop out answer, but think about it this way. When you go to the gym, right? If you only focussed on leg day, you'd have the world's best legs. So you need to both flex both side of the body. Right. And I think of the same way with the financial markets. You want to be diversified and you want to constantly look at your whole portfolio. So stocks and property both for me. [00:03:23][23.3]

Bryce: [00:03:23] All right. Felicity, this or that contributing extra to super or investing outside of super? [00:03:29][5.8]

Felicity: [00:03:29] That's a good question. So for me, it's actually really going to be dependent on your taxable income, right? So if you're only earning $30,000 a year, it doesn't make a lot of sense tax wise to put more money in super at this point. But if you're earning $230,000, it can be great to reduce your taxable income by putting money into super. If you're only $30,000, start with a portfolio outside. But I think a bit of both again is okay. [00:03:54][24.9]

Alec: [00:03:55] Nice, nice. Well, as someone who hasn't contributed any extra to my super I should take that advice. [00:04:00][5.5]

Alec: [00:04:03] Can just let's go back to you are this or that Warren Buffett or Cathie Wood. [00:04:07][4.7]

Candice: [00:04:08] Oh this is such a hard one. I do love Kathy and I do love her her long term vision and and preference for innovative sectors. But you can't go past Warren Buffett. In my eyes. He's just the godfather of of investing and being the long term. I think he sort of almost pioneered the buy hold. Right. Like he's he doesn't he rarely sells. And if he does, it's like a it's like the end of the world event for him. So. Buffett All the way. [00:04:33][24.9]

Bryce: [00:04:35] I love it. I love it. And to close out Felicity this or that, a company that has consistent profit or unprofitable growth. [00:04:43][7.6]

Felicity: [00:04:44] Okay. So I think the best companies to invest in are the ones that are growing and are showing a clear pathway to profitability. [00:04:50][6.6]

Candice: [00:04:52] So not yet profitable. [00:04:52][0.7]

Bryce: [00:04:53] That's that's a very. [00:04:54][0.7]

Speaker 5: [00:04:55] Little bit of both. So not yet profitable. [00:04:57][2.8]

Felicity: [00:04:58] That's saying both, but in a very professional way. It's nice because the thing is, not all companies start out profitable. Right. And you don't also. Want to miss out on these businesses just because they're not having consistent profit. Then you've got ones that are consistent profit, but they're not really growing, you know? Are you just in it for a dividend yield that's not going to make you a millionaire? No. [00:05:19][20.7]

Bryce: [00:05:19] Well, could over a long period of time compounded. [00:05:21][1.6]

Alec: [00:05:21] And made it made Twiggy a. [00:05:22][1.2]

Speaker 5: [00:05:22] Billionaire. Yeah. [00:05:24][1.4]

Felicity: [00:05:26] But he had growth, right? [00:05:27][1.0]

Speaker 5: [00:05:28] Sure. [00:05:28][0.0]

Alec: [00:05:28] He did have a lot of growth. [00:05:29][0.8]

Bryce: [00:05:30] As we said at the top of the show. It's a happy anniversary to both of you. For one year of talk money to me, you've done an awesome job of building a podcast that really is now a podcast for not only the financial advice industry, but for those that don't often get access to financial advice but can get insight into what you both do. And we thought we'd take this opportunity to understand what you may have learnt and go down memory lane on some of the stock picks that you've taken over the past year or so. So Felicity, what what have been some of your major learnings over the past year from Talk Money to me. [00:06:06][35.9]

Felicity: [00:06:07] From an investment standpoint? Honestly, it's just you need to be patient and catalysts will play out. But patience is the key when investing. And I think Buffett said that as well. Right. The stock market is a mechanism of transferring wealth from the impatient to the patient. [00:06:22][15.1]

Alec: [00:06:22] It always takes longer than you expect. But that patience and that persistence is worth it 100%. [00:06:28][5.8]

Bryce: [00:06:29] What about you, Candice? [00:06:29][0.4]

Candice: [00:06:30] Also the power of editing, right? [00:06:32][1.6]

Felicity: [00:06:32] Like something against accusations somehow. [00:06:35][2.7]

Candice: [00:06:36] And somehow it comes out at, like, 30 minutes. It's amazing. Now, lots of things. Lots of things. It's there's a lot of behind the scenes, a lot of support around you. So it's not just an overnight quick fix kind of thing. And it's been great from my perspective because it's a little bit of creativeness that we get to do throughout the week, which is nice to mix up, you know, our usual day jobs right at the end of the day. So it's a good talking point for clients. It's sort of like an icebreaker and it's been a lot of fun and there's stuff that I'm actually learning, chatting with CEOs that I perhaps wouldn't have learnt in a boardroom because it's a bit more intimate, right? Having a personal conversation. [00:07:12][36.1]

Felicity: [00:07:13] And it's also quite interesting being like, what would people want to know? Like What do people not know? What do they want to know and what can we share with them every week? So thinking of that new content and those questions and really digging deep in our interviews. [00:07:26][13.3]

Bryce: [00:07:27] The constant game of content. [00:07:28][1.0]

Alec: [00:07:29] There's always more to talk about. That's the one thing I love about your show is that I think there's a good mix of different content types talking about trying to find the next episodes content. You've got interviews with CEOs and investors. You've got need to know segments where you explain concepts. But I think and I haven't looked at the data to back this up, but I think the data would bear it out that your most popular episodes are your order pad episodes where you talk about specific companies, you break them down, what they do, what their financials are telling us, and why you like them or you don't like them. Now, over the course of the year, you both have made a number of order pad picks and people can go back and listen in your back catalogue. I want to ask both of you this question to kick it off. Whose order pad picks have gone better? [00:08:19][49.7]

Felicity: [00:08:20] Mine. [00:08:20][0.0]

Speaker 5: [00:08:21] Felicity. [00:08:21][0.0]

Felicity: [00:08:23] I've got to pick a winners growth. I've got the bigger winners. [00:08:25][2.7]

Candice: [00:08:26] So Felicity's investment type is, like she said at the start. Right, is very high risk, high reward. So she's got the top gainer, which is silo x. But then the biggest drag, that's the. [00:08:37][11.0]

Speaker 5: [00:08:37] Risk I take. [00:08:38][0.8]

Candice: [00:08:38] On all. [00:08:39][1.1]

Felicity: [00:08:39] Sides, actually. Hold on, hold on, hold on. You just drag. Also Australian Potash. ABC is one of the biggest threats. [00:08:47][7.3]

Candice: [00:08:47] This is the this is the real kick of it when when I hit refresh. The good news is, guys, we're actually up double digits now. It just shows how much the market can move in in a quick second. Right. So we actually have we did our refresh happy birthday episodes, the revamp. We were only up about six stocks out of the 20. Now we're up eight almost halfway. Okay. But we kind of shot ourselves in the foot because it was obviously been doing the podcast for one year, but we've had some stocks in the portfolio for like three weeks, right, a month, two months. [00:09:21][34.2]

Felicity: [00:09:22] We started talk money to me in September last year and the market peaked in November last year. [00:09:27][5.1]

Speaker 5: [00:09:28] So the timing is right. [00:09:29][1.1]

Felicity: [00:09:29] It's only been the best 12 months for us. [00:09:32][2.5]

Alec: [00:09:32] No, no. Well, that was going to be my follow up question. Have you outperformed the ASX 200. [00:09:36][4.5]

Candice: [00:09:37] No. [00:09:37][0.0]

Speaker 5: [00:09:38] Oh, oh. [00:09:39][0.4]

Felicity: [00:09:40] We're up 14%. [00:09:41][0.8]

Candice: [00:09:43] Or. [00:09:43][0.0]

Alec: [00:09:43] Oh, you're up four times. [00:09:44][0.7]

Speaker 5: [00:09:44] You take that. You take my. [00:09:45][1.1]

Candice: [00:09:46] Takeaway. Deep yellow. It's sort of. No, we're definitely not cash. [00:09:50][3.5]

Felicity: [00:09:50] You can't take away my stock pick. [00:09:51][1.2]

Speaker 5: [00:09:53] It we've made so I'm not taking away socket stock. [00:09:58][4.3]

Felicity: [00:09:59] With me. The trade. [00:10:00][1.1]

Candice: [00:10:00] The tracker on deep yellow is a bit. We've left it as a nice price. Let's say that if we came back to real terms we're down about 3%. [00:10:07][6.5]

Felicity: [00:10:08] You just saying your. Fudging numbers I'm. [00:10:09][1.7]

Candice: [00:10:10] Fudging numbers. [00:10:10][0.4]

Felicity: [00:10:10] On. [00:10:10][0.0]

Candice: [00:10:11] My spreadsheet was not working. When I calculated here for refresh this morning, I was like 14. Sounds good. [00:10:16][4.7]

Speaker 5: [00:10:17] All right. [00:10:17][0.3]

Bryce: [00:10:17] Well, I guess I guess the follow up here is we've got people listening at home who may be in a similar situation trying to pick stocks as the market falls. And of course, you've done this for the purpose of content, so we must remember that. [00:10:28][10.9]

Alec: [00:10:29] But it's not personal financial advice. My kids, Felicity and Candice are not aware of you personally. [00:10:34][4.3]

Bryce: [00:10:34] But what would be some sort of takeaways or lessons of doing these order pads at a time where markets are pretty volatile? And how would you sort of explain the last sort of 12 months? [00:10:46][11.5]

Candice: [00:10:46] Well, I think one thing to remember is if you look at the lag is right, Australian Potash and Blackstone, they're they're very high growth, they're very small cap, they're long term. So when we picked those particular sectors or I should say when we picked those particular companies, they're in the future facing commodities. Right. So that's an example where if you look at it on a short term basis, you'd be really upset with yourself because you're thinking, why did I grow those companies? We we are a long term investor and that's our philosophy. So it's, it's obviously a hard emotional thing, you know, behavioural finance 1 to 1. You always look at your own portfolio and you think I could have done better in a down market in particular. I think it comes back to really knowing your risk tolerance and why you're sitting out to invest, because at the end of the day, you don't want to cause more emotional stress on yourself. If you if you have the tendency to go, yeah, it's okay, I'm down 60% or whatever it is in those particular names, but it's 2% of my whole portfolio. I invest in that for ten plus years. It's really hard to, but it's coming back to just getting rid of the short term noise and thinking long term. But to answer your question, guys, for this this moment right now that we're seeing the sort of on this like crossroad, are we going to go down a deep recession or not? Is it going to be quick? Are we going to fix it with, you know, fresh capital like we've done in the past? I think it comes back to maybe just coming a little bit risk off going back to your strong balance sheets, your, you know, kind of more stick to your knitting like we we commonly said on our show quite a few times and only having maybe, I don't know, 10% less than what you normally have as growth, right. Because if you can't handle that volatility, that's completely fine. [00:12:33][106.5]

Felicity: [00:12:33] Just go in an index fund. Yeah, you got it. [00:12:37][3.1]

Candice: [00:12:37] The hardest thing I always say to the meeting first, you probably actually see me saying this. It's like trying to catch a falling knife. You cannot catch the bottom. It is just too hard. So dollar cost averaging. We talk about a lot. Keep doing that. Stay the journey and just remember why you picked those companies for your diversified portfolio. [00:12:53][16.0]

Felicity: [00:12:53] And if you have more winners and losers, then you're winning, right? If you're in the direct stock game. [00:12:58][4.4]

Alec: [00:12:59] That's be. [00:12:59][0.3]

Bryce: [00:12:59] Nice. [00:12:59][0.0]

Speaker 5: [00:12:59] That's very true for your portfolios. [00:13:02][2.3]

Felicity: [00:13:02] Going at the moment. [00:13:03][0.6]

Bryce: [00:13:04] I haven't really taken a huge interest in my stock portfolio of late. That's not good. Obviously, I'm I'm down from where we were a few months ago, but I've taken this opportunity to really put as much money in as as I can, keeping in mind that I still want a bit of powder dry in case we do go further south. But like our time horizons are so long and there's so many awesome opportunities out there that this has been an exciting time for Rent and I, we haven't we haven't looked at this as a, you know, I guess we're fortunate in that position that we have a time horizon that allows us to be excited about this moment. Yeah, rather than not. [00:13:41][37.5]

Alec: [00:13:42] I have a couple of stocks that are down about 80%. Shopify has smacked me, but on the whole, I actually feel pretty good about where I'm at. I'm similar to Bryce. I have loaded up a lot the last couple of months, so brought my average buying price of some of those tech names, that big tech names down, which was nice. But I've also just taken the opportunity to load up on the index a couple of indexes around the world. Yeah, I'm pretty excited. There's a running joke that I sold my car to get liquidity. There were other factors. [00:14:17][34.9]

Speaker 5: [00:14:18] That led me to. [00:14:18][0.6]

Alec: [00:14:18] Sell my car. So it's not a joke. [00:14:20][1.0]

Speaker 5: [00:14:20] You actually did. [00:14:20][0.5]

Alec: [00:14:21] I did sell my car and I took that money and put it in the stock market. [00:14:24][2.8]

Felicity: [00:14:25] That's a better. [00:14:25][0.2]

Speaker 5: [00:14:25] Invest. [00:14:25][0.0]

Alec: [00:14:25] Technically, I did sell my car to get liquidity. [00:14:27][1.9]

Speaker 5: [00:14:28] It's a better internationally. [00:14:28][0.4]

Bryce: [00:14:29] It was sold to scrap metal. [00:14:30][1.1]

Speaker 5: [00:14:32] Oh my God. [00:14:33][0.8]

Alec: [00:14:36] That's a yeah. So that's I feel okay. But there are a couple of stocks, some that I still hold that are a weight anchor. Well, it's more than an anchor, but. [00:14:46][10.1]

Felicity: [00:14:46] You don't want. [00:14:47][0.2]

Alec: [00:14:47] Any more cement block. [00:14:47][0.8]

Speaker 5: [00:14:48] Yeah, you've lost conviction. [00:14:49][0.9]

Bryce: [00:14:51] We saw a few before tax time. [00:14:52][1.2]

Speaker 5: [00:14:53] Oh, yeah, we did. [00:14:53][0.6]

Alec: [00:14:54] We did. Yeah. When Brian says what he did, it sounds like we have a joint. [00:14:57][3.7]

Speaker 5: [00:14:58] Yeah, you guys should, but I. [00:14:59][1.8]

Alec: [00:14:59] Promise you, we don't do everything together. [00:15:01][1.5]

Bryce: [00:15:02] Equity Mates clear the balance sheet. [00:15:04][1.4]

Speaker 5: [00:15:04] Yeah. All right. [00:15:05][1.3]

Bryce: [00:15:06] Anyway, let's. Let's keep moving and. Have a chat about some of the financial advice stuff that we've been itching to talk to you about, and we've pulled together some questions from our community as well. Let's start kind of what what are some of the common misconceptions or mistakes that you often see in new clients coming to you seeking financial advice? [00:15:27][21.1]

Candice: [00:15:28] Yeah, that's a really good question. There's there's a few that popped to my head, but one that I kind of love. It's a bit of an internal funny joke is when you sit down with a hopefully a new client and they say, look, I've been in the markets for X amount of years, I'm pretty good. I've got some really good stocks, I'm well diversified and I mean low risk stuff and you're like, okay, great. And then you have a look and there holding the big four banks, Telstra, BHP and Fortescue or something like that. So it just comes down. [00:15:58][29.8]

Speaker 5: [00:15:58] To. [00:15:58][0.0]

Candice: [00:15:59] Yeah, right. But you know I've got four banks, right, diversified, you know, that's just comes back to education. I don't think we were taught that really at school. I remember my uni they just kind of fobbed off like it was a quick thing. It really comes back to I guess people. They think they're comfortable in the property market, they think they're comfortable in the ASX top 100 and they stick in to that lane. So when you start to educate them and open them to other asset classes, for example, can I give you less risk but a more guaranteed return? They start to go, Yeah, that's great. And then just opens up their eyes. So I think education's a big one for us. That's why that's one of the reasons why we started the podcast, because we just want to give back to to the general public on what we know. [00:16:42][42.8]

Felicity: [00:16:43] Because it's not just equities, right? And property. There's so many other asset class that we do have a really good episode on hybrids, which I think is something that a lot of investors don't know about and is great if you want that consistent quarterly income as well. I also think a lot of people are under advised and under-insured and a lot of people would say that financial advice is just too expensive and where do I seek it? Where do I find a good financial advisor? If you actually seek the right advice and you set up your investments in the right structures first, it saves you a lot of money down the track. [00:17:18][35.0]

Bryce: [00:17:18] Insurance is an interesting one there. Felicity, what do you mean by underinsured? [00:17:21][3.1]

Felicity: [00:17:23] So in regards to your personal insurance, so your life insurance, your total permanent disability insurance, trauma and income protection, I think a lot of young people think, oh, you know, it doesn't matter. I don't need that. But take income protection, for example, you'll happily insure your car or your insurer, your house, but you don't think about insuring your most important asset, which is your ability to work and earn an income. So income protection kicks in if you're injured or ill and unable to work and you've run out of annual leave and sick leave. [00:17:53][30.5]

Alec: [00:17:54] Well, Felicity, let's do the audit here. Bryce, do you have income protection insurance? [00:17:58][4.0]

Bryce: [00:17:59] No. [00:17:59][0.0]

Alec: [00:18:02] I don't. I don't think I do either. But I might have it through my super. Is that something you can get through your super now? [00:18:07][4.8]

Bryce: [00:18:07] I know he super does. I don't think they have it. [00:18:09][2.0]

Felicity: [00:18:09] You can get it all right. [00:18:11][1.2]

Speaker 5: [00:18:12] Yeah. [00:18:12][0.0]

Felicity: [00:18:13] Most industry funds have default cover, but the issue is it's not generally covering your actual income. And the wait period could be 90 days and maybe you need 30 days. And the issue with life insurance and TPD, if you haven't done underwritten cover is it decreases with age. And to be honest, you probably want your insurance to at least stay the same or increase with age. [00:18:38][24.2]

Alec: [00:18:39] We go somewhere under insured. [00:18:41][1.1]

Bryce: [00:18:41] Sounds like. [00:18:42][0.3]

Felicity: [00:18:42] Correct. And you guys have a business, right? So you should. What happens if something happens to one of you, to the business? Do you have a buy sell agreement in place? You know who's going to take over? He's going to take one of the spots like think about those things. [00:18:55][13.5]

Alec: [00:18:55] Then we merge with a stock. And so. [00:18:57][1.9]

Speaker 5: [00:18:58] The share market. [00:18:58][0.3]

Bryce: [00:19:02] Also questions why we need to go into the world. [00:19:04][2.2]

Alec: [00:19:05] Look, I think I think I think the thing that Bryce and I definitely realise and I think so many people in the Equity Mates community realise is that they are under advised like I am under no pretences that I like. I recognise that I could benefit from a financial advisor but it's difficult to know where to go. And then obviously there's a high, I guess initial cost with the statement of advice. I guess we want to talk through that and get your advice on how people can navigate the world of financial advisors, how they can find the one that works for them. But before then, we're going to take a quick break. So one day, Bryce and I can afford a financial advisor. So welcome back. We're joined by Candace and Felicity, two superstar hosts of Talk Money to Me, a podcast. If you're not listening to it, you should go and check out Candace and Felicity are celebrating their one year anniversary of Talk Money to Me. So we are celebrating that. But we're also here to pick their brains because as licenced financial advisors, they can say a lot more on their podcast than Bryson, I can say, but they also just know a lot more. And so we want to, we want to really understand that before the break we were speaking about Australians that were under advised and I guess I didn't have a financial adviser. Bryce No. Financial advisor, no. So. Kennison Felicity, for two people that don't have an advisor, how do we start? Where do we start? How do we navigate the world? [00:20:30][85.5]

Felicity: [00:20:31] Yes, I mean, that's a good question, right? You can actually look up different advisors on the advisor register and you're able to search people on advisor ratings as well, depending on what you're looking for or what area you're in. If you don't actually want to go and see a financial advisor, you should actually just start thinking about your own financial goals, right? Think about short term, medium term and long term, because I think that's something that no one really actually sits down and writes out. I mean, have you written out what your short term goals are, what your medium or your long term? It's kind of like a business plan, really. [00:21:04][33.2]

Alec: [00:21:05] I have. I have. [00:21:06][1.3]

Speaker 5: [00:21:06] As well. We haven't written. [00:21:07][0.8]

Alec: [00:21:07] A business plan. [00:21:07][0.4]

Speaker 5: [00:21:11] For. [00:21:11][0.0]

Candice: [00:21:11] Your goals in the business as well. Right. So you've sort of done half the job. [00:21:15][3.9]

Felicity: [00:21:15] Speak to your parents or speak to friends. It's always good to get a warm referral to a financial advisor as well, someone that your family or friends have used and trusted and have done a good job for them. That's always the best clients that we get from our existing clients because they know our track record and they can trust us. I guess people are scared after, what was it? Michelle Carrick. [00:21:39][23.9]

Speaker 5: [00:21:40] Yeah, and. [00:21:41][0.6]

Felicity: [00:21:41] Everything that happened there, and there's so many different Ponzi schemes out there, but if you look at the advisor register, you can search both of us Candace myself and any potential advisor that you do want to seek advice from to see if they're actually legit. [00:21:56][14.7]

Alec: [00:21:56] It feels like a bit of a dating scenario. I like you. You go in there, you have a meeting, and then you decide if I want to entrust my money with them. So Candice, as someone who's probably had a lot of those initial potential client meetings and, you know, had that first date experience over and over again, what advice do you have? What questions should we be asking to figure out if this is someone we want to form a financial relationship with? [00:22:22][25.3]

Candice: [00:22:22] If you go back to why you would go to a doctor or you've been referred to a certain specialist, you might go with a bunch of questions that you want to ask because we all have that, you know, very commonly with like we don't want to waste the doctor's time, right? So going in prepared is my first thing questions like you know, how long you been an industry. I Felicity's saying do you so you do do your homework every year. [00:22:44][22.4]

Felicity: [00:22:45] What are your qualifications. [00:22:45][0.2]

Candice: [00:22:46] Yeah, you actually realise is pretty much on LinkedIn so you get a bit of a one on one straight away if you go to LinkedIn and then once you get rid of the sort of like credentials, then I think it's a good starting point to go to. What's your investment philosophy like as an investor? What ethical boundaries do you have or do you think are important? And all of a sudden if you're like, Oh, this, this person's kind of just pushing their values onto me and they're not really listening to what maybe I want in the portfolio, then I don't think you'd be a good fit because at the end of the day, guys, it's a two way relationship, it's a working relationship. You've got to have give and take, you know, forward and backwards together, because where we're really successful is when we become a sounding board, not only for our clients, but then we get bringing in to you guys can say, you guys were on a podcast, but I'm doing this with my hands. We get like a big, big hug and we get to know the family account, we get to know the solicitor. We really take it on as like a family office. And clients love that because now they're they've they're really feel valued and respected. And going back to I think the start is like Australians are only like 10% have advice and when you're sick you can either do it yourself, you know, get some home run staff or if you really want to knock on the head you just know that you need to go see a professional and I think the industry is now lifting to that standard. Same with the legal profession and accountants. So it's exciting to be, you know, young advisors in the sense that we could be with our clients for the next 20, 30 years. So it's, I think it's a great time. [00:24:21][95.0]

Felicity: [00:24:21] MM There's so many strategies out there as well that you just wouldn't have heard of. And I think we did an episode on debt recycling. You know, you've been able to use your lumpy asset to generate more wealth, turning non-deductible debt into deductible debt. Just little things that you wouldn't think about. Yeah, they're a bit of a pain to set up initially, but once you've got everything set up, smooth sailing. [00:24:41][19.7]

Bryce: [00:24:42] Nice set goals you just mentioned setting goals and. It. It made me think. Have you written goals for your financial advice business? What are you. What are you guys trying to achieve? We know that closing the retirement gap is one, and we'll get to that in a second. But any sort of major goals, are you trying to hit. [00:24:59][17.5]

Felicity: [00:24:59] 1 billion assets under management within the next five years? [00:25:02][2.8]

Speaker 5: [00:25:02] Not nothing. We want that one. [00:25:04][1.3]

Candice: [00:25:05] Yeah, no, great question. So part of Shaw and Partners, we we we're the bigger network, right? So we now manage, I think 35 billion as in Shaw does 35 billion assets under management. So we want to take a little bit more of that piece of pie. But yeah, full transparency we have. Last time I counted, I do this on a quarterly basis, about 130 ongoing clients. So they're like that bear hug that I was talking about there, your ongoing regular touch, you know, family office style clients that we have, perhaps mum, dad, maybe the next generation, they're super with us, etcetera. Like a couple of different things going on and that's grown from pretty much nothing. When first and I teamed up and we look at the market's volatile, so our firm obviously floats with the market. We were down 40% at one stage, but we're sitting around. We're halfway to our goal, basically. [00:25:59][53.7]

Bryce: [00:26:00] Nice. Well, congrats. Well, 130. I don't know how you manage that, but full. [00:26:04][4.1]

Speaker 5: [00:26:04] Credit. [00:26:04][0.0]

Felicity: [00:26:05] Was actually. So there's three of us. We've got her share as well. We're kind of building out a bit of a team, which is important. And, you know, you really had to have the capacity to double, I believe, at this stage because most financial advisors have around 130. [00:26:19][14.3]

Candice: [00:26:20] Yeah. [00:26:20][0.0]

Bryce: [00:26:21] Okay. [00:26:21][0.0]

Felicity: [00:26:22] Got her advisor. [00:26:22][0.4]

Alec: [00:26:23] So just some quick maths, a half a billion dollars across 130 clients. The average client has about $4 million. [00:26:30][7.5]

Speaker 5: [00:26:31] Yeah, we've been doing those. [00:26:33][2.0]

Alec: [00:26:33] So I could probably benefit. [00:26:36][2.8]

Candice: [00:26:38] If you look at our book, right, we've got some clients that, you know will have multiple million with us. And then we also like to look after the first investor. So we have a client that has, you know, 30 grand with us, right? Because at the end of the day, everybody needs advice. And just because you're a millionaire or a multi-millionaire or a billionaire, you know, they start it off somewhere as well. So we like to help all sides and we're big in the not for profit sector as well. They need a lot of advice. So yeah, we have a really diverse. [00:27:08][29.7]

Felicity: [00:27:09] Pool from retail to wholesale, right? But I think any advice is going to tell you that realistically they want less clients, more money. I mean, that's a no brainer. [00:27:16][7.4]

Alec: [00:27:18] Yeah. Yeah. I think, you know, it's obviously something that Bryce and I are super passionate about, just how the industry can help get more people advised. And, you know, podcasts like Equity Mates are a pale imitation of actually getting educated one on one from an advisor. So I think the more people that can access it, the better off. [00:27:41][22.5]

Felicity: [00:27:41] Saying a financial advisor doesn't necessarily cost the first time either. Right. And Candice and I are happy to have a meeting with people from your network who want to go through an initial meeting. There's no commitment, just have a chat. [00:27:52][10.7]

Alec: [00:27:52] The other thing that we've learnt from Equity Mates is it's all good and well to have an advisor, but if you don't have the financial literacy yourself, you can't ask the right questions, you can challenge the advisor, then you can just end up in a bad situation as well. We had someone DM us so we did a couple of episodes on superannuation and someone DM'd us afterwards and they said, I'm 30 years old and after I listened to your series I went and checked with my financial advisor how my super's going. 60% of his super was in cash as a 30 year old. [00:28:25][32.8]

Candice: [00:28:25] Oh, yeah. [00:28:26][0.4]

Alec: [00:28:26] Yeah. And so I think I think for us, it really reinforced that like even if you have an advisor, you need to become financially literate yourself. You need to understand what your money's doing, but it. [00:28:38][12.2]

Candice: [00:28:38] Doesn't even have to be. Warren pays, right? I like, like go back to your goals. So it's pretty obvious that super if you're young, you can't touch. So therefore you theoretically should have a long time horizon. Then think, okay, what am I kids? Or my future kids and my niece and nephew? Like, what are they going to invest in? You know, maybe traditional fossil fuels is not the future, for example. And it doesn't it doesn't have to be rocket science. You can just go back to the basics and then you can there's so much online, like ETF providers are great at this. They're so good at educating through the index. Right. I think. [00:29:14][35.4]

Felicity: [00:29:14] If you're paying, though first favours. [00:29:15][1.1]

Candice: [00:29:16] Go look, why am I in cash? I don't need cash. [00:29:18][2.4]

Felicity: [00:29:18] If you're paying a fee every year, you should be having at least one annual review. So there's one tip. Make sure that you have your annual review. Otherwise you're paying a fee for no service. [00:29:27][8.5]

Bryce: [00:29:28] Well, this is a good segway to superannuation because you're both very passionate about closing the gender retirement gap. So what are some steps that we should all be thinking about? You know, we just spoke about being underinsured at at a young age. Superannuation is also not something that we might be thinking about. As as much as we should be. So what are some steps that we should all take to set ourselves up for retirement? And I guess in particular, anything that women should be thinking about as well. [00:29:55][27.6]

Felicity: [00:29:56] Sign up to super awards. We did an episode on it recently. You're essentially free money into your super from everyday spend. I mean, who wouldn't want that? That's a no brainer. Yeah. And you can actually if you don't want it to be part of your non-concessional contributions or your after tax injury after 30 June, submit a notice of intent to claim and claim as a personal deductible contribution. So it's going to reduce your taxable income at the same time with free money. [00:30:24][28.0]

Bryce: [00:30:24] Yeah. Ren And I've been doing a bit of research into the super industry just because we want to get across a little bit more. And I must say it is overwhelmingly complex. [00:30:34][9.5]

Speaker 5: [00:30:36] For. [00:30:36][0.0]

Bryce: [00:30:36] What should just be a very simple idea. Non-concessional. Concessional. After this. Before that, this should be non-taxable. Taxable at this age, that age. Before this date, after that. [00:30:49][12.1]

Candice: [00:30:49] Just got. [00:30:50][0.5]

Speaker 5: [00:30:50] It's always change government. It's like. [00:30:54][3.5]

Bryce: [00:30:54] Government. If you want this stuff to be accessible and people to actually be engaged with it, all of it just seems it seems complicated. But that's why you guys exist, I guess. Anyway, gripe over. Continue. [00:31:06][12.0]

Candice: [00:31:09] All right, let's break it down. Right. If you've just out of the workforce, for example, you might not have a lot of super. Often you just get shoved into the default, whatever industry you're in. Right. Then a couple of years later, you might have three or four if you're at that stage. That's probably a key point for you to go, okay, let's have a plan. Let me think about my super because it is important. It's behind the scenes. It used to be 9% of your net wealth. Now it's ten, ten and a half going up to probably 15 before we know it and it's getting harder and harder to access and probably going to be longer until we can touch it. So it's in the background, it's in this thing that you've got to focus on and firstly consolidate it, know where it is. Is it the right partner? Do they have the right investment superannuation products for you? You know, what are you actually invested in? Can you ask that question? What are the fees? How is it tracking to other ones generally like, you know, the big ones like Australian Super. They actually perform really well. And then when you get to the next point in life, it comes back to life moments. Let's say you get married or you're taking out a home loan, you're buying a property. Your goals kind of reset again because you're getting closer to retirement. You've maybe now partnered up with someone, so now all of a sudden double income, you know, can you talk self-managed super fund together like it's do you get what I'm saying? It's about life moments. You go, it's a fluid plan because your life's fluid and you just you should always go back to every now and again. Hey, let me check in. Am I fading my retirement enough? [00:32:45][95.4]

Felicity: [00:32:45] That's it. It's. It's 10% of your salary, essentially. And I just like to think of it as an investment vehicle. You know, it's actually the most tax effective investment vehicle you'll ever have. And then you've got companies and trusts and then your personal taxable income. So just think of it like that set and forget, you know, keep it invested then index funds, right? You're invested for 20, 30 years. There's no harm being in an index fund. Yeah. [00:33:12][27.0]

Alec: [00:33:12] The most tax efficient and administratively complex investment vehicle. So Qantas simplicity, we can't have financial advisers on the show without turning to property because it is the Australian dream and it's a dream that feels more and more out of reach for more and more people, especially young people. Bryce and I, not so young anymore, but still out of reach for us as well. When you have clients that don't own a house or want to want to get on the, you know, the residential property ladder, what are some of the steps you advise them to take? Basically help Bryce and I get a house. [00:33:47][35.0]

Felicity: [00:33:50] Okay. So I think here it's a regular investment plan. I mean, can you give me a bit more information? What's the time horizon? When do you want this house? [00:33:57][7.3]

Speaker 5: [00:33:58] Is it going to be seven years? Is it going to call. [00:34:01][2.6]

Alec: [00:34:01] It in the next five? [00:34:02][0.5]

Felicity: [00:34:02] In the next five years? All right. So you have to realistically have a lower and more conservative asset allocation, because, as you know, equities is seven plus years with rising interest rate. It's actually a really good time to be in more defensive positions like the hybrids, like the credit funds that can get you that 6%, but taking on less risk. So I think Bryce said it earlier. It's that compound interest. Right. And just kind of building up not only with your returns but building out with your regular investment plan. Pretty sure you can now put a deposit down on a property at 10%, get a good mortgage broker. There's fantastic mortgage brokers out there that will let you know right now how much you can borrow and all potentially how. How much more you need for that deposit? I think that we should have a good buying opportunity next year, to be honest. So you might want to bring that forward, that three years. [00:34:54][51.8]

Alec: [00:34:55] I actually have spoken to a mortgage broker still at a rate. [00:34:58][3.4]

Speaker 5: [00:34:59] Trying. [00:34:59][0.0]

Felicity: [00:35:00] To buy. What are you trying to get, like. [00:35:01][1.3]

Speaker 5: [00:35:01] A ten year property. [00:35:02][1.1]

Felicity: [00:35:03] In the is. [00:35:03][0.3]

Alec: [00:35:03] This rising interest rates downturn? It could be our chance, but I think yeah, that's that's good advice. Anything to add Candace to to help us get started. [00:35:12][8.5]

Candice: [00:35:12] I think I don't know your situation. Right. But one thing that we commonly find is first home buyers tend to get very emotional because it's their first bricks and mortar and it doesn't have to be a forever home. It can be what you can afford right now. Smart investment, do your research and then we make money in property because we leverage so much. Right? We can borrow heaps, right? If we put down five, 10% and then it can be a short five year, ten year thing and then move on to the next. Full disclosure, I'm looking at the property market right now because I'm seeing where I live. We had crazy COVID numbers and now all of a sudden, remember when like property, I remember when agents would list something on a Thursday or Friday and be sold by Sunday. Monday that environment's gone. And we're back to quote unquote, the normal property market where people need a liquidity event. People are trying to sell first. No more bridging financing. You know, it's not that FOMO anymore. So the property market is slowing down for sure. And I'm seeing signs where I locally live and you know, they're on the market for 6 to 8 weeks. So I think there is an opportunity, if you're not in to think about it and have a savings buffer, start to build up that capacity and you know, don't get emotional. That's my big tip. [00:36:36][83.9]

Felicity: [00:36:37] I think also if you've not bought a property yet, you could look at the first home super saver scheme. Maybe that's something you can look at save. You can actually use your superannuation to get that deposit, but you'll need to see a financial advisor. [00:36:49][11.8]

Candice: [00:36:50] All right, guys, before we wrap this episode, because it's been super fun chatting with you, I just had a burning question for you both. I talked about property. I kind of want to now pick your brains on your perspective on the market. Right. So here's my question. If you could only pick one sector to own shares in for the next ten years, what would it be and why? So you can only play in that one sector. [00:37:11][20.9]

Felicity: [00:37:12] But don't do that because that's bad financial advice. [00:37:13][1.8]

Speaker 5: [00:37:15] That's one. [00:37:15][0.5]

Alec: [00:37:16] Sector. [00:37:16][0.0]

Speaker 5: [00:37:17] Of the magic for the next ten years. [00:37:18][1.1]

Candice: [00:37:19] So I'm thinking like things like what do you think is going to be the next big thing that you're like, I'm just going to back this? [00:37:24][5.4]

Alec: [00:37:25] Well, I mean, the obvious answer is the next big thing is going to be the same as the last big theme, which is software or tech. [00:37:31][6.2]

Bryce: [00:37:31] Yeah, I like artificial intelligence. [00:37:34][2.3]

Speaker 5: [00:37:35] Mostly, but I run. [00:37:37][1.5]

Bryce: [00:37:37] Space, I read space. [00:37:38][0.9]

Alec: [00:37:38] I recognise they're not super interesting answers. The other, the other really obvious thing you would say is the climate. [00:37:43][4.9]

Bryce: [00:37:43] Climate, yeah. Anything. And also like by like medtech pretty, some pretty fascinating stuff coming out of the metaverse. [00:37:50][7.1]

Candice: [00:37:51] Are you guys into the metaverse? [00:37:52][0.8]

Alec: [00:37:53] I, I'm not sold. [00:37:54][1.1]

Bryce: [00:37:55] I can. [00:37:55][0.2]

Felicity: [00:37:55] See it. [00:37:56][0.3]

Candice: [00:37:57] If you want to. In the metaverse. [00:37:58][0.9]

Alec: [00:37:59] What have you said. Have you seen property prices in the metaverse like decentraland and stuff? It's bloody expensive. [00:38:05][5.4]

Speaker 5: [00:38:05] There, but I'm not a. [00:38:07][1.9]

Candice: [00:38:07] Big thing and I don't I don't get it either. [00:38:09][1.8]

Felicity: [00:38:10] I had friends buy one in the metaverse and I'm like, You need one outside the metaverse. You can't actually live in it. [00:38:16][6.0]

Bryce: [00:38:16] We might not, though in ten years it might be that the people in the metaverse will be doing better with their property than those. [00:38:21][5.1]

Alec: [00:38:21] Out of it. But you'll still need a roof over. [00:38:23][2.2]

Speaker 5: [00:38:23] Your head to get a tent. [00:38:25][1.4]

Bryce: [00:38:26] All you need is internet. [00:38:26][0.6]

Speaker 5: [00:38:27] Get a really good. [00:38:28][0.7]

Alec: [00:38:28] Set of VR. A VR headset that doubles as a hybrid is. [00:38:32][4.5]

Speaker 5: [00:38:33] You see this. [00:38:33][0.5]

Felicity: [00:38:33] Idea? [00:38:33][0.0]

Speaker 5: [00:38:34] Yeah. [00:38:34][0.0]

Bryce: [00:38:36] Well, I think I think the exciting thing for Rent and I can is that it feels like well we're certainly at a point where, you know, we can take the opportunity to get into a lot of these industries and sectors at an early stage. Like if you do think about decarbonisation, you think about air, you think about metaverse, even cryptocurrency, you think about software like, yes, it's been some of those things have been around for a while, but so much of it is just developing at such rapid pace that we're at a pretty lucky point in time where we can get in on a lot of it at an early stage. It's hard to tell the winners, but it's yes. [00:39:12][35.7]

Alec: [00:39:12] Yeah, yeah. I've thought of one. It's not so much a sector thematic, but it's a geographic thematic. South East Asia. I'm just super bullish on the not advice, but I'm super bullish on the demographic story in South East Asia, the amount of people in Indonesia, the Philippines, Malaysia, even like Vietnam and stuff like that that, you know, their incomes are rising, they're getting connected to the Internet, they're skipping computers and going straight to smartphones. But it means they're connected to this whole world. We've got about 5 million. So 5 billion. Internet users today. In the next ten years, you would expect everyone will get connected to the Internet with, you know, aliens, StarLink, satellites and everything else. I just think there's so much, so much potential in Southeast Asia. So I'm really excited about this area. [00:40:01][48.6]

Felicity: [00:40:01] And I think actually we have an idea there. See, LTD is one of the big large US companies that plays on that and it's being sold off a lot. And we've still got Blackstone, which is nickel and copper in Vietnam. [00:40:14][13.0]

Alec: [00:40:15] And my big gripe with the ASX, well not so much a gripe, but I think they're missing an opportunity. We should be the home of all these Southeast Asian companies, they should be the ASX should be courting them and convincing them to list in Australia. They shouldn't need to go to the United States. We should be getting the next go to don't list in Indonesia, list in Australia. [00:40:38][22.6]

Felicity: [00:40:38] That's why we go over there and get them to come in, list through us. We could do that. Have a business meeting in Indonesia. [00:40:46][7.6]

Alec: [00:40:46] We could, we could. I'm more than happy to let the ASX do the hard work, but I think, you know, Australia is a well-regulated liquid market with heaps of capital and we should be attracting some of the next generation of really exciting companies from outside our borders. [00:41:00][13.8]

Bryce: [00:41:01] Nice. [00:41:01][0.0]

Alec: [00:41:02] Okay. [00:41:02][0.0]

Speaker 5: [00:41:03] That's my end of it. [00:41:05][1.8]

Felicity: [00:41:05] So I guess just from our perspective, realistically, it's staying the course for all investors, right? You know, things could get a little bit worse. We could see a little bit more of a downturn as we have more quantitative tightening. Right. That could ramp up in September because the Fed is actually going to be reducing its balance sheet by about 90 billion US from the 17 bill. But for us, Qantas and I, our clients, hopefully your listeners, our listeners, it's a really good buying opportunity, right? This volatility is a great buying opportunity. [00:41:39][34.1]

Alec: [00:41:41] Not advice. [00:41:41][0.3]

Speaker 5: [00:41:42] Not exactly general advice only. [00:41:44][1.5]

Alec: [00:41:45] And that's definitely the message that Bryce and I have internalised and it's it's hard to do like you know you get and you get nervous when you stocks are down and you're in the red. But you look back and Bryce and I lament so much that we weren't really investing in 2008 and we're going to kick ourselves so much if we miss the opportunity in 2022. [00:42:06][21.1]

Felicity: [00:42:06] And things take ages to play out. Like I even said in one of our episodes. Silex I've been in for four or five years. It's only just really playing out now. You have to be patient. [00:42:16][9.7]

Bryce: [00:42:17] Well, I think that is a great place to to wrap it. Counsel and Felicity, it's been really enjoyable talking to you both. I hope you've been able to shed some light on the importance of financial advice for those that are thinking about going out and getting some. And congratulations on one year anniversary as well. You guys are certainly put in the hard yards over the last 12 months building talk money. To me, it's fantastic podcast. If you haven't subscribed, make sure you go over wherever you find your podcasts and and listen to the girls because they'll continue to help you navigate the world of financial advice without necessarily needing to go and see one directly. You'll pick up some tips along the way, but dig on, say them, because as I hope you heard, they both certainly know what they're talking about. It's been an absolute pleasure. Thank you very much.