Speaker 1: Hi, everyone, and welcome to this week's episode of Money with Alpha. Today, I am joined by Dylon Makrail. Welcome.
Speaker 2: Thank you. Thank you, Alpha, for having me.
Speaker 1: Thank you, and Dylon is a financial planner. So I wanted to, to, oh, I met, I met Dylon recently, and I wanted to bring you on to, to talk a little bit about financial planning, what it does, and, and all of the sort of intricacies of it 'cause it's it's an evolving profession. There's been lots of changes that have happened in, in this space in Australia in the last few years and I'm also interested to find out a bit more
Speaker 2: Mm-hmm.
Speaker 1: your money stories and history as well. So,
Speaker 2: Mm-hmm.
Speaker 1: before we, we launch into all of that just, yeah, please introduce yourself and a little bit
Speaker 2: Yeah.
Speaker 1: your backstory and how you came to be doing what you're doing and why you love it so much.
Speaker 2: Yes. Thank you so much. Well my name I'm originally from South Africa. I came to Australia in 2013 as an accountant. So I was practicing there for about five years as an accountant. I moved over to Australia and found it really tough to enter into the job market as an accountant from South Africa. So I needed to learn sort of the new tax laws within Australia and, and so I wasn't getting enough sort of work in that space, but enough to keep, to keep me going. I then decided a year later that, look, it's not sustainable from a cashflow perspective getting jobs here and there from a contract perspective, and that's when I decided to use some of my sort of personal skills interpersonal skills, like I like talking to people and I'm also really good with the numbers side of things. So I thought I'd use my accounting background with my, you know, love to help people through financial planning or at least coach, coaching and educating people, like something like what you're doing, similar to what you're doing with your, with your clients, Alpha. I wanted to really and truly coach this the public and to, to help them get ahead of, of the pack. And so financial planning was started in 2016 or '14, '15 as a, as a junior, just on the phone setting up
Speaker 1: Mm-hmm.
Speaker 2: ... and before sort of moving up the ranks and meeting with clients So I really enjoyed the fact that I could be a part of the chain that helps someone to achieve their financial goals until I became a financial advisor in 2020, 2016.
Speaker 1: Mm-hmm.
Speaker 2: so I've been a financial advisor ever since then. And I haven't looked back. I really enjoy working with money or the numbers side of things, but more importantly, it's the interpersonal skills, the seeing the joy on, on someone's face when you help them to achieve their financial goals as well, whether that is to purchase another property, in their, to build wealth, or just to save an extra $100 each, each month. Those sort, sort of things is what, what I appreciate from the industry itself.
Speaker 1: Yeah. No, and I love... because the name of your business, I remember when I first saw it, Dreamwise, I was like, "Oh, I like this." It's,
Speaker 2: Yeah,
Speaker 1: you know, most, most things are just very, like, pragmatic, whereas ultimately, as humans, we, we talk in stories and we love dreaming Especially, I as children, we tend to do less of it as we grow up. But I think it's important to recognize that we need to have dreams, and then the money is there to support achieving those or realizing them.
Speaker 2: Yeah. Yeah, yeah. I guess it's in the name itself. You know, Dreamwise, you know, if you're going to have those dreams, then why not, let, let's help you, you know, structure it and actually meet those dreams, and, and put with some wisdom I guess, that's why the owl is there as well for some wisdom,
Speaker 1: Yes.
Speaker 2: art and representation of that.
Speaker 1: Yeah. Yeah, no, it's great. It's, it's, it's very symbolic as well as literal too, so it's great. So I have a question 'cause I, I get from people quite a lot, like, "Oh, financial planning, you know, they, they always need me to have, like, a minimum of $100,000," or, you know, "It's the, it's a very regulated industry. Well, it's confusing. It's expensive. Da, da, da." How do, how do you see it and how do ... kind of explain to people what the benefit of it is and the costs necessarily? You don't have to go into specifics,
Speaker 2: Yeah,
Speaker 1: in terms of when does it become worthwhile for someone to actually go down the path of getting a financial planner?
Speaker 2: Yeah, so look it, you, you need a financial advisor sort of from, from, from the get-go once you start earning money, right? Once you're once you're starting, you you need to be thinking about how, how you can save better with the, with the little that you have if you're a student coming into the, in, breaking into the, into the industry, into the market. You you should have some or speak to at least some money managers in the, in, in the industry to at least understand your, your cashflow, right? It all starts with the cashflow. You need to understand your inflows, your outflows, to, to recognize some surpluses that you can potentially use to put away for a rainy day. How to invest that money is where financial advisors then comes in. Now when it comes to ideologies about, you know, you need $100,000 in, in your super or in cash to invest and make it and to justify look, I'm of the opinion that you just need to be working have superannuation that you can invest and then, and it, and it makes sense to invest and using a profession, a professional like a financial advisor 'cause at the moment government has said that we, that we allowed as financial advisors to charge for financial advising recommendations that is going to that will target your superannuation fund at least. So that's something that you wouldn't need to sort of fork out out of your back pocket from a cost perspective.
Speaker 1: Mm-hmm.
Speaker 2: So people think that, yes, financial advising is, is quite expensive. Yes, you, there, there are clients who pay out of
Speaker 1: Mm-hmm.
Speaker 2: ... but that's because they want, they want sort of more complex strategies that involve money itself things like investing outside of superannuation space. And, and yes, we will be charging we, we will be charging them outside of super, but anything that's related to a superannuation fund, like insurance benefits, for example, so we'll look at your insurances, personal insurance, like life, TPD, income protection, trauma, trauma is held out of super, so that will be outside. But anything that's, that's related to superannuation and which is also related to retirement, we can charge the super fund for our financial advising
Speaker 1: Mm-hmm.
Speaker 2: ... just to make it a little bit more palatable for, for the general public. When that is, is when, when that time is, is when you are not happy with your current
Speaker 1: Mm-hmm.
Speaker 2: whether that is the costs involved inside of your existing platforms whether it is return on investments that you're not happy with, or whether it is insurance benefits for people who are looking into the market and purchasing their first home. Normally, their finance brokers should be asking them, do they have a do they have personal insurance in place? That then how can I say? Pushes the client to check their, the insurance benefits inside of their super, and lo and behold, we've got standard policies that is not really tailored to the client specifications as a, you know a working doctor, for example, or, you know, a plumber. It, it, it's not sort of... it's it's more general insurance.
Speaker 1: Yeah.
Speaker 2: And so that brings about another reason to speak to a financial advisor about those sort of topics to, to make sure that it's tailored, good quality products for, for the, for the money that you are already paying through the superannuation fund.
Speaker 1: Mm-hmm.
Speaker 2: Hopefully that answers that question. Sorry.
Speaker 1: Yes. No, that was a comprehensive answer. Thank you. Yeah.
Speaker 2: Yeah, yeah. Sorry.
Speaker 1: And I, I think, I think because we often, especially younger, the younger we are, the less we kind of think about our retirement and superannuation. But as you start to get into your sort of 40s and especially 50s, you're like, "Oh my gosh, retirement. I can see it. It's looming. I need to get my, you know, act together." And I think that's... it's a really good opportunity to, to look at how you can optimize it.
Speaker 2: Yeah.
Speaker 1: I mean, there's, there's a lot of industry funds out there, but there's still things you can do within that.
Speaker 2: Mm-hmm.
Speaker 1: ... and you touched on the insurances, which is extremely important because there's so many nuances in the insurance space that... and there's so many out clauses that are built into a lot of those policies, that you really need someone like a financial advisor who knows the ins and outs to actually be able to tell you, "Okay, well, how..." I mean, obviously life insurance is, is pretty black and white, you know? It's
Speaker 2: Mm-hmm.
Speaker 1: They used to call it death insurance, but I think that just sounded too dramatic, so now it's life insurance.
Speaker 2: Too dramatic.
Speaker 1: And then your TPD, so your total and permanent disability. Like, I've actually had some family members and I've had some, some clients recently who've been in that space where they've had to actually draw on that. And it's, it can be quite difficult to navigate, especially if it hasn't been set up well.
Speaker 2: Mm-hmm.
Speaker 1: so you need the specialist to help you set it up. And then at the, the, the back end, you need sort of the lawyers to help you, or whomever to help you tap into that potentially as well. But the
Speaker 2: Mm-hmm.
Speaker 1: ... is there to support you through that. So I think
Speaker 2: Yep.
Speaker 1: they're both really important. I often get the question around self-managed super funds.
Speaker 2: Yes.
Speaker 1: what's, what's your... how do you see them? Do you like them, dislike them, indifferent and how do you work in that space?
Speaker 2: Yeah. So I, I actually look, I can't be either like it or not. It all depends on my... on the client itself.
Speaker 1: Yeah.
Speaker 2: So I'm driven by what my client needs at the time and where their goals are located.
Speaker 1: Yeah.
Speaker 2: It's also a preferential investment, so my clients might say they would like to invest in
Speaker 1: Mm-hmm.
Speaker 2: ... and they've now exhausted their capacity to borrow more money to purchase another property outside of a superannuation
Speaker 1: Mm-hmm.
Speaker 2: ... which leads to only one area potentially, and that is to utilize your super your superannuation funds to then go out and potentially purchase a property or purchase or invest in markets that your industry superannuation fund potentially cannot. That's the main purpose for self-managed super funds, is to take control of your superannuation fund and how to best invest it and... your preferences, right?
Speaker 1: Yeah.
Speaker 2: ... for, for, for us I, can... I, I I like it because we can have more control. And, and I also don't like it because it, it does... it can cost quite
Speaker 1: Mm-hmm.
Speaker 2: ... for the clients who are not on a really good or really sound balance collectively. So when we write up ... super fund advice. We want to have at least a minimum of $500,000 combined, husband and wife. Or there's a collection of up to six members or trustees that can come together to create a self-managed super fund.
Speaker 1: Mm-hmm.
Speaker 2: In most cases that I've seen, it's normally partners that go into husband and wife, for example. So the... For, for, for myself and for my licensee it's the $500,000 mark that we
Speaker 1: Yeah.
Speaker 2: look to and then that would justify the, the, the large setup costs involved to then proceed with, with that sort of strategy. On top of that, it's also the responsibilities of the trustees. Now, the, the member... the individual members that we never thought about, you know, the accounting behind the super funds that they currently have, or the
Speaker 1: Mm-hmm.
Speaker 2: or you know, insurance deductions, paying the tax on the, the, the earnings that they, that they're making.
Speaker 1: Yeah.
Speaker 2: So there's a lot more that goes into it. And if your clients cannot accept the responsibilities... Now, we're not asking clients to, to deal with everything. There's, there's a group of professionals who come together to make sure that we're managing the self-managed super fund on their behalf and making sure it's compliant.
Speaker 1: Yeah.
Speaker 2: So, so we take the stress away from, from the client himself with the help of other professionals, like accountants, lawyers and auditors.
Speaker 1: Yeah.
Speaker 2: To, to, to make the, the, the strategy work. The good side of it is that, you know, you... It's flat fees, there's no percentage-based fees on it, depends on how you invest it. So it can be more cost-effective over
Speaker 1: Mm-hmm.
Speaker 2: ... you invest, as opposed to an industry related super fund, which is in... which is more percentage-based fees, right?
Speaker 1: Yeah.
Speaker 2: it can go quite high. Versus, you know self-managed super fund cost in total, which can be flat for a long, long, longer periods of time.
Speaker 1: Mm-hmm.
Speaker 2: so from, from my perspective, a self-managed super fund can grow wealth exponentially for clients who are looking to tap into the market, like, for property. If they're
Speaker 1: Yeah.
Speaker 2: ... outsource it outside of
Speaker 1: Yeah.
Speaker 2: they can continue with inside of superannuation, and they can build it up quite, quite dramatically. And we've all sort of seen how the property have... market have exploded in, in Australia. So everyone, you know, is looking for the next opportunity to purchase property.
Speaker 1: Yeah.
Speaker 2: but there's also things like, investing in other alternatives; like cryptocurrency
Speaker 1: Mm-hmm.
Speaker 2: ... investing in, in gold or, you know, other, other sort of areas AI that, that the industry superannuation funds are not offering clients. So, you know, from that
Speaker 1: I would
Speaker 2: exactly. little more conservative, but also what the client is more preferred to... what they prefer to invest in for themself.
Speaker 1: Yeah.
Speaker 2: self-managed super fund, great, great product. Not for everyone. Not for everyone, but it can, it can definitely help meet your financial goals and your wealth your wealth goals itself.
Speaker 1: Yeah. Yeah, no, that's, that's great. There, there's a lot in there, and I think that's probably one of the best, most comprehensive answers I've had in relation to self-managed super funds giving the perspective of both sides too, so thank you for that. Something else that, that I, You know, that... Having sort of older parents and having to sort of navigate, and it's different age kind of
Speaker 2: Mm-hmm.
Speaker 1: of capital growth versus in terms of strategies.
Speaker 2: Mm-hmm.
Speaker 1: How, how... you know, 'cause you know, read more and more about how industry funds are starting to do this whole kind of portfolio balancing, you know, life balancing, I think they're calling it.
Speaker 2: Mm-hmm.
Speaker 1: But then there's ultimately, when people are older and they're no longer working and they need
Speaker 2: Mm-hmm.
Speaker 1: ... how far ahead do people need to start thinking about switching from, like... And it... and is it simply switching from capital growth versus... to, you know, stop reinvesting the, the dividends kind of thing, to
Speaker 2: Mm-hmm.
Speaker 1: the right things that are going to give them income? How, how does that kind of balance kind of play out, generally speaking?
Speaker 2: Yeah. It Look, when I was working for indus... And I used to work for industry superannuation funds. We would... I remember there was a strategy where you sort of dial down the risk from... for a client from the age of, like, 55 through to the age of 65.
Speaker 1: Mm-hmm.
Speaker 2: So they might start the investment from a risk perspective that is sitting in a growth. So which is taking about 70 to 80% risk in shares and property style assets versus the more defensive space or lower risk options, which is 20 to 30%. So what they'll do is, each year automatically it's dialed
Speaker 1: Mm-hmm.
Speaker 2: ... till they get to the age of 65. By the time a client will get to the age of 65 and they're ready to retire we're looking at a more balanced portfolio where 50% of, of their funds would be invested in shares and taking a little bit more risk. The other 50% would be more invested in defensive assets or lower risk options like term deposits, government bonds and more conservative options like potentially gold as well. It... And it's it's another sort of product that we've seen, or a commodity that we've seen over the past number of years, you know, very low risk but massive returns that we've seen in, in gold space. But the point I'm trying to make is that your portfolio, it's all about that asset allocation structure
Speaker 1: Mm-hmm.
Speaker 2: for when getting into that retiring spaces, to make sure that...... because you're withdrawing money from these portfolios at 50/50 percent splits, generally speaking, they can produce returns of about six to seven percent
Speaker 1: Mm-hmm.
Speaker 2: ... on investment. And if if clients can afford to, you know, withdraw that same six to seven percent each year from their portfolio to live comfortably, potentially with the help of government incentive or the age
Speaker 1: Mm-hmm.
Speaker 2: ... then we, we're smiling. We're keeping our, our balance in check. So you're making it to seven percent, but you're also withdrawing that same seven percent each year, which means that your balance stays sort of flat. It's not going to grow, but you still have that,
Speaker 1: Capital protection.
Speaker 2: potential for capital protection to, to, to pass down to your to your loved ones if you're no longer here. But with that said, some people can if you have a little bit more risk involved or risk tolerance of
Speaker 1: Yeah.
Speaker 2: then you can potentially increase that for, for your own portfolio, for, not sort of highly recommended because you are sort of, you're accessing that money so you don't ... want to access that money if the markets do go down.
Speaker 1: Yes. Yeah, I have
Speaker 2: Mm-hmm.
Speaker 1: my parents when they were approaching their, like, from about 75 and their, well, my mom's still in her 80s and my, my dad was it was like 80/20. So I still had, and to be honest, the 20% only, was 20% of their his portfolio was in shares was because the capital kept growing. And
Speaker 2: Yeah.
Speaker 1: I kept on trying to go, "Oh, we need to, like, try and balance this." And he still had enough in cash. So I was like, "I'll just let it keep growing."
Speaker 2: Yeah.
Speaker 1: So it's, yeah. So it just kind of, but I had, I made sure there was plenty of cash there to
Speaker 2: Mm-hmm.
Speaker 1: ... like, aged care support, whatever, whatever was needed.
Speaker 2: Yeah.
Speaker 1: So yeah, so that's one. Another question I get quite a lot and I'm interested to your perspective on it, is when we say investing in shares, like, probably 10, 10-plus years ago, everyone's thinking, like, individual shares, like, having to stock pick and, you know, trade, like, buying and selling.
Speaker 2: Mm-hmm.
Speaker 1: Over the last 10 years, more and more has come out about this concept of, like, ETFs and, like, industry funds and things.
Speaker 2: Yep.
Speaker 1: what do you see for, for people, like, what's, is there one better than the other is it just, again, depend on what people are after? But like direct share investing versus ETFs.
Speaker 2: Mm-hmm. Yeah, direct share investing comes with higher risk involved because we are investing in one company only as opposed to investing in the entire
Speaker 1: Yeah.
Speaker 2: ... where, where that one company is operating from.
Speaker 1: Yeah.
Speaker 2: So it's it's a sort of I'm not going to say it's a no-brainer 'cause I'll, people are sort of they, they've got different levels of risk
Speaker 1: Mm-hmm.
Speaker 2: ... and they've got their own preferences to companies. So for the, for the large contingent that I've, I've, met with, my clients, we do we do a sort of a combination of ETFs or exchange traded funds as well as managed funds or, actively managed investments where the active managers are trying to outperform the share market, right? They, they do invest sort of strategically. You
Speaker 1: Yeah.
Speaker 2: ... little bit more for that, but it, it helps during times when you know tariffs come into play again, for example, you know, then the markets tank That's what we saw at the start of the year.
Speaker 1: Yeah.
Speaker 2: these active managers can easily pull those levers in order to respond to the
Speaker 1: Mm-hmm.
Speaker 2: as opposed to an ETF fund. It takes a long time for them to get in to respond to the market than active managers. So,
Speaker 1: Yeah.
Speaker 2: at Dreamwise, we, we like to use a combination of the two.
Speaker 1: Mm-hmm.
Speaker 2: It's called a satellite approach where, core satellite approach, where the core base of your investment is
Speaker 1: Yeah.
Speaker 2: with some satellites around it or some active managers in the market who are looking at, you know, the interest rates are going down, "Oh, let's quickly pull some levers to, to make some money on the way down or on the way up for, for that industry and investments." So I like ETFs because they, they do capture the market, they, they are well-diversified depending on, you know, which industry you or how, what type of investment you are investing in.
Speaker 1: Yeah.
Speaker 2: Separately managed accounts, which is SMAs as well.
Speaker 1: Mm-hmm.
Speaker 2: That's another area that people could be considering for their investments. It's also ETFs, but it's more, it's ETFs in, you know in, in Australian market, international markets emerging markets, fixed interests, cash. So it has all four or five of those sort of industries all in one.
Speaker 1: Mm-hmm.
Speaker 2: As opposed to choosing, okay, the top 200 companies as an ETF, and now, now, I need to choose which other industries I need to
Speaker 1: Yeah.
Speaker 2: ... as opposed to just getting one separately managed account that
Speaker 1: Mm-hmm.
Speaker 2: for you.
Speaker 1: Right. Okay. Yeah, no, that's that's a good one. Yeah. I've, I've seen them before. I haven't sort of gone too much down that path, to be honest. But yeah it's definitely one that needs to probably have a little bit more of a profile for people to understand them.
Speaker 2: Mm-hmm.
Speaker 1: and can anybody access SMAs, or do you have to go through a ... planner to access them.
Speaker 2: You have to go through a financial advisor to, to to access SMAs, yeah.
Speaker 1: Yeah, which again, it's more specialized and that, that's what you, you then pay for that access.
Speaker 2: Exactly. Exactly.
Speaker 1: Yeah.
Speaker 2: So that's And with the direct investments it, like I said before, it, it just comes with a, at a higher price if that company, if anything happens, their directors leave
Speaker 1: Mm-hmm.
Speaker 2: people find out about it, they leave with the director, you know,
Speaker 1: Yeah.
Speaker 2: there's a lot more risk involved and that's why if it's a good company, yes, we want to invest in it as well, but let's not make it our sole focus.
Speaker 1: Yeah.
Speaker 2: Let's make it part of our, part of our strategy.
Speaker 1: Yeah, diversify. No, it's... Strategy is the big thing.
Speaker 2: Absolutely.
Speaker 1: I think it's something that's, it's probably lacking for a lot of us in our money 'cause the idea of it just sounds too hard or too scary and we don't, we don't know, but I... And, and this sort of leads me a little bit to, to Well, two questions that have sort of the same, same kind of concept behind it, but trying to find the right financial advisor and someone like yourself who likes to educate and make sure that their clients understand it. So it's
Speaker 2: Mm-hmm.
Speaker 1: you know, you, you need like... obviously you're preparing a statement of advice and people are having to understand it enough to sign it, but there's, there's that extra step there about do you really understand it? So I, I think that that's a really good measure for when people are looking for a financial advisor. So
Speaker 2: Mm-hmm.
Speaker 1: how do you let your clients know that that's an extra sort of added benefit that they get from the service you provide, is that education piece? Like, do you tell
Speaker 2: Yeah.
Speaker 1: ... upfront or how do, how do you make sure that they're, that they're... 'Cause you also want the right clients who want that kind of level of understanding too.
Speaker 2: Yes. Yeah, so most of my clients are they engage me because they want a financial relationship
Speaker 1: Yeah.
Speaker 2: with the advisor. Not someone that can do a job for them today and then never call them back again. So, so that's how... that's a first step where that's how we sort of that's our service that we do offer. It's an ongoing service with the client. So when we do present the file, it's not like, "Yeah, your, here's your, here's your statement of advice. There's your financial plan. See you-" "... in, see you in later." Yeah.
Speaker 1: See you in 12 months 'cause I'm legally
Speaker 2: See you
Speaker 1: once a year.
Speaker 2: Well, not necessarily not if you, if they're not signed up for an ongoing service.
Speaker 1: Oh, okay.
Speaker 2: So
Speaker 1: Right.
Speaker 2: So you can just present a file and give, hand it out to the client.
Speaker 1: Mm-hmm.
Speaker 2: Most all my clients I present an ongoing service to as well. it's only when the client tells me that they are they only want an, self-managed super fund recommendation, nothing else. That would be transactional. so we'll leave it there. I will write the plan for them and away they go. If they need in, in a lot of cases they're always coming back.
Speaker 1: Yeah.
Speaker 2: They would need to, I would need to set up new costs and all that sort of stuff. So it does, it does help the client and saves money for the client when they ... go ahead with an ongoing service. Now, it does mean that we we give you the, the, the plan. We also then implement the plan for you.
Speaker 1: Mm-hmm.
Speaker 2: so with the implementation, it's also an education piece to explain to you what the next steps are.
Speaker 1: Mm-hmm.
Speaker 2: If the, the next steps are also embedded within the financial plan as well. So you can always refer back to your financial plan to see these are the next steps. Actually, I don't understand step number four, you know, which is to over a portion of your super maybe into a new superannuation platform that
Speaker 1: Mm-hmm.
Speaker 2: ... produce more returns. Why only a small portion? Why not all of it? So then we go back and we explain, "Well, it's because your existing superannuation fund holds your existing insurance benefits in it."
Speaker 1: Yeah.
Speaker 2: "And if we're gonna move all of it out, you won't have insurance anymore. So while we're getting new personal insurances, we have to keep your old ones 'cause anything can happen between the those periods where-"
Speaker 1: Yeah.
Speaker 2: you don't have anything." and, and we've seen
Speaker 1: Mm-hmm.
Speaker 2: ... it's happened before. You just don't want your clients to ever be not insured.
Speaker 1: Right.
Speaker 2: So exactly. So a lot of the times I get those sort of questions, "Why only a small why only a portion, why you're leaving a small portion in my old account?" You have to go back and you have to educate the clients again along the way. So I give them time to ask questions after each strategy that we provide for them.
Speaker 1: Yeah.
Speaker 2: And then just to explain it back to us as well, or maybe just like, "Okay, so what does that mean for you?" So and then you can hear their responses that they've got it or not.
Speaker 1: Yeah. And then you can start to get a feel for, okay, do they really understand what I said in the first place? And clearly maybe they didn't.
Speaker 2: They didn't, yeah.
Speaker 1: Yeah.
Speaker 2: Or maybe it, it also helps me to understand how how, how deep I need to go with the explanation or, or, or not.
Speaker 1: Yeah. Well,
Speaker 2: And,
Speaker 1: money's a journey and money's a, there's a language to it. And, and you might not realize that you haven't understood it until you actually understand part of it and then you realize that you didn't understand it. So it is an ongoing thing, which is why it's good to have that ... sort of support and relationship.
Speaker 2: Exactly. Because you know, things change in people's lives. So we can give you advice today, but in two months time, you, you know, you got a promotion from work. All of a sudden the strategy I gave you two months ago doesn't make any... It's not relevant. And if advice is not relevant, it's not gonna be beneficial to you, so we encourage our clients to always let us know if there's any significant changes along the way including maybe a loss of job or maybe an accident of, or, or a promotion like I mentioned before.
Speaker 1: Or an ... where you're getting a chunk of money in one go. That, that's
Speaker 2: Or, or an inheritance. So like, "What do I do with all this money now?" Like, "Where do I park it?"
Speaker 1: Mm-hmm.
Speaker 2: Well, there, there are ways that we can and there are products that we can recommend to the client as well when that does happen, so.
Speaker 1: Yeah.
Speaker 2: So it helps to get that o-ongoing relationship. It's
Speaker 1: Yeah.
Speaker 2: beneficial for the client.
Speaker 1: Yeah, it's like having a a relationship with a single doctor. They, they kind of know everything, the history. Helps them make better, better diagnoses and decisions.
Speaker 2: Exactly.
Speaker 1: Something I've, I've been reading about over the years, and yeah, is the concept of robo-advice. And everything these these days seems to be about using AI and, you know, we're all going to lose our jobs and blah, blah, blah. Well,
Speaker 2: Mm-hmm.
Speaker 1: I'm not a reluctant user of AI. I use it for certain things. Like, if I want to put captions on a video, I'm going to use AI for that. I'm not going to sit
Speaker 2: Yep,
Speaker 1: ... and myself. But when it
Speaker 2: Yeah.
Speaker 1: things that are very human I don't, I don't think artificial intelligence can ever replace human... and not just knowledge, but instinct and connection and all of that. So what do you how do you see robo-advice playing out in the financial advisory industry?
Speaker 2: Yeah, look, robo-advice, I haven't had a lot of involvement with it. So I, I've, can only but imagine it's sort of plug in your details and we'll give you a plan, so it's very basic advice. Eh, it's still... Look, I, I think it's still an a new area, even AI itself, where people are a little bit concerned with giving a, a platform all the information. I, I believe that when robo-advice can help in the sense of there's a platform, it's got all my financial details in there, maybe ask it, "Can I save X amount of dollars and-"
Speaker 1: Mm-hmm.
Speaker 2: "... how much can I save if I took out my rent money, for example, out of this platform?" and so from that perspective, it, it can help. I, just think that there are some limitations when it comes to the robo-advice as well. I think that there is a, a, a seat at the table to get people to think about speaking to a financial advisor that's going to be more tailored to, to answering those questions. And nowadays, financial advisors also use AI to, to help generate... I mean, you know, when we do our calculations and modeling, that's all AI-driven, right? It's maybe not on a robo-advice scale where we're expecting this AI to give the answers, "Do I invest? Do I take out life insurance?" Yes, you do. Well you know, that's... If you don't have the cover, it's kind of obvious that you, that you, that you potentially might need it.
Speaker 1: Yeah.
Speaker 2: So look, there, there is a space for it. I think it still needs to be a little bit more developed so that people can take or have more confidence in robo-advice. We've just at a point where, you know where people are, are starting to believe more in financial advisors. Now we're asking them to now start believing in robo-advice. So it's like can, can we just do one thing at a time?
Speaker 1: Yeah.
Speaker 2: you know...
Speaker 1: Yeah,
Speaker 2: let's get the human being. Let's sort out, you know, financial advisors first.
Speaker 1: Yeah.
Speaker 2: And then we can deal with things like robo-advice. Do, like I said before, it's got a place at, a seat at the table. Maybe not a, a full chair.
Speaker 1: Yeah.
Speaker 2: Maybe a
Speaker 1: Yeah, just
Speaker 2: or something,
Speaker 1: ... cautionary.
Speaker 2: Yeah, but
Speaker 1: Yeah.
Speaker 2: It's s-sort of like you know, like you use Google to search for ideas, use robo-advice in the same way.
Speaker 1: Yeah. Yeah, 'cause it's interesting when you you know, we're only just starting to, to build up. 'Cause there was a certain lack of credibility that happened in the financial planning industry. And, and I'm a, I don't want to use the word victim, but I, I'm kind of a product of that because I had an advisor who was just commission based, was very, like, you know, inhuman in a way, like, couldn't, couldn't answer a lot of questions. When I asked for information, just gave me, like, the standard wrap fund, 300, you know, fund like, performance report kind of thing, nothing personalized. And I, and I think people that have been burned in that way, the idea of fee for service feels, A, sometimes more expensive, but at the same time they're like, "Can I trust this?" Like, "Is this... Are they... You know, are they just going to be like the others who are just commission based?"
Speaker 2: Mm-hmm.
Speaker 1: So I think, you know, having advisors like yourself is definitely working to build up the credibility of the industry. So that's great.
Speaker 2: Thank you. Yeah.
Speaker 1: So I wanted to also just, just tap into a little bit of, like, money... Like, as... You've given us a lot of really good information about financial planning as a, as a profession and, and, and the sort of work and things it, that they can do. How did money kind of... Like, how did you, I guess, get interested in even accounting to start with? How did money play out for you when you were growing up? what, what did you sort of see and what the impressions did you have as a, as a child and teenager?
Speaker 2: Yeah. Look, as a teenager, I, I really loved woodwork. I I loved doing more manual sort of stuff and and it was when I came home one day and my... I, I, I'd got 100% for one of my projects and I, I think that there was either my one of my parents, my my dad probably, he's like, "Look, woodwork is not going to get you the money. It's more like you need to focus on things like IT, programming and accounting and that sort of thing." So I was really and truly ... into accounts by my folks because I wanted, obviously, the best for, for myself, growing in
Speaker 1: Job security.
Speaker 2: ... all that, all that sort of things. But, but more importantly, we weren't you know, we weren't wealthy at all. We were very average. It was not a great suburb where I grew up. It, it, it was back in South Africa. Needless to say, there was a lot of strife and struggle in the '90s, '80s, you know? And so it was, it was a, it was a tough time. And look out of all that, we still managed to help me to sort of pass my... or get... go through university, do my thing.
Speaker 1: Mm.
Speaker 2: And then from there, it was sort of let's latch onto this accounting. It wasn't always an easy subject for me, accounting, because of the debits and credits and the extra debits and extra credits. And but, yeah so I've changed over my subjects I think in year eight, I think, and two years before, or three years before you graduate.
Speaker 1: Mm-hmm.
Speaker 2: I changed over from woodwork, being my major to, to accounting. And yeah And, and also, my dad had a lot of influence over my decisions back then.
Speaker 1: Yeah.
Speaker 2: As a six-year-old, I remember when all the other kids were playing out in the streets he would have me sit inside at... from 5:00 6:00, and we'd go through math book textbooks. So... And I was like, "What am I doing?" I tried to... 'Cause I knew this is... this is coming up.
Speaker 1: Yeah.
Speaker 2: But all of that did help massively in my understanding of maths, mathematics, numbers, sort of problem-solving.
Speaker 1: Mm-hmm.
Speaker 2: So, you know, I I'll, I'll forever be grateful for that. And also, we didn't have a lot of money growing up. So that's why I always wanted to do... help my parents in, in a lot of way to, to get ahead. So that's when the background comes in. That's why I want to sort of teach and help the, the next person because it's not that hard. it's not difficult. It's, it's all habitual that, you know, as humans, we, we tend to spend more than what we actually earn. That's, that's... it's psychology, right? So it's... and you know better than me in that space, you know? You do deal with it quite a bit.
Speaker 1: Yeah.
Speaker 2: But
Speaker 1: Very emotional when it comes to money.
Speaker 2: it's the mindset. It, is an emotional game. And it's partly why I wanted to be in that emotional sort of space because yeah, it's quite important for people. When we do talk about money, we talk about financial goals and, you know, having to achieve it, how we're going to get there. Well, here's your plan to... There's a roadmap and use this roadmap to, to reach your financial goals, and I will be there along the way. You know? So, so that sort of stuff drives me to, to, to take on the next client, to understand their, their, their background, and to sort of see myself in those sort of situations if I can, obviously.
Speaker 1: Mm-hmm.
Speaker 2: Not every situation, but my... from my sort of from my background, not, not well. There was no wealth. It was
Speaker 1: Yeah.
Speaker 2: ... very average, very simple life. Dangerous, and then sort of moving on from there doing my university. And, and even all the way through, no one taught you about money management. No, no one did. My parents didn't. They were... they suffered as well, as, as, as most of South Africa. So yeah, it was just, why are they not teaching this in school? Why are they not showing us how best to save? Very simple life skills. It's a life... Isn't it a life skill? ... money management should be.
Speaker 1: Yeah, should be.
Speaker 2: as much as geography is and history, there should be money management as, as, as a core.
Speaker 1: Yeah.
Speaker 2: Just to keep us going.
Speaker 1: Totally agree.
Speaker 2: so, so that, that was... So if I can bring some of that to the public, then I'll, I'm all for it.
Speaker 1: Yeah. And have you gone back to woodworking now as a grownup?
Speaker 2: No, not yet. There's... It's building a business. It, it takes up all your time.
Speaker 1: Yeah.
Speaker 2: having kids, it's, it's just like, where's the woodwork in this, you know? Where's the,
Speaker 1: Yeah. Time for you.
Speaker 2: But for, for myself, I think
Speaker 1: Maybe you can try and build in some time for it.
Speaker 2: ... I could but now my hands are quite soft. It's all sort what do they...
Speaker 1: You're a soft office worker.
Speaker 2: I'm a soft office worker and so now any splint, you know, is going to be like, oh, no, I can't do that.
Speaker 1: Oh, I got a paper cut. No.
Speaker 2: Oh, I got a paper cut. Exactly, exactly. But no look, woodwork was... Back then when I was obviously in high
Speaker 1: Yeah.
Speaker 2: ... I loved it then. And now I'll leave it for the experts and maybe do a project with a professional that
Speaker 1: Well, you can always join a men's shed.
Speaker 2: Oh, that. Exactly. I've never heard of that, but happy... It sounds like it's something that I would like to attend. Yeah.
Speaker 1: You need to check them out. They're all, all around the city.
Speaker 2: Yep.
Speaker 1: I mean, generally for... they're for retirement. But that doesn't mean that a younger man can't join. But that they basically get together and they make stuff. And if
Speaker 2: Mm-hmm.
Speaker 1: ... like like schools or or organizations in the community that need things, ... help support them by making it. It could... Yeah. But anyway, just, just a little bit of a... I'm teasing you slightly. But,
Speaker 2: No, I know. I know. Thank you.
Speaker 1: But but no, no, no, I'm serious about the men's shed though 'cause they are... I was trying to get my father to join one, but yeah. And there's also Repair Cafes out there. But I think men's shed is nice 'cause it's a it's a social thing too.
Speaker 2: Yeah.
Speaker 1: But yeah, maybe for the
Speaker 2: it would be nice to build if I could one day build my daughter a sort of, I-... tree house or something, you know?
Speaker 1: Yeah. Perfect.
Speaker 2: So yeah. I, I don't know, I'm just yeah. You
Speaker 1: I
Speaker 2: ... as business owners we have all these ideas, "Let's do it, let's do it, let's do it." And then it's
Speaker 1: Yes.
Speaker 2: when you
Speaker 1: The list is long.
Speaker 2: long, exactly. When I get there I will do it, for sure.
Speaker 1: Yeah. So do you teach your daughter about money?
Speaker 2: She is well, she is two years old, so I teach her,
Speaker 1: Oh, two. I thought she was older. Okay. Yeah, not
Speaker 2: No. No. Yeah. Not, not yet, but I teach her to share.
Speaker 1: Yes. That's a good start. Yeah.
Speaker 2: Yeah. Good,
Speaker 1: no, and, it's, it's an important thing as well. I mean, my, my daughter is 10, so I'm a little bit further down the path there. But it's, it's an interesting one, and I've got teenage my cousin's children.
Speaker 2: Mm-hmm.
Speaker 1: And, and I think unless... Like, my daughter's been... We, like, we've been talking about money since... I started her, her journey on money when she was five. I was like, "Okay, you, well starting to learn how to count, we can start to talk about
Speaker 2: Mm-hmm.
Speaker 1: And especially about, you know, the value, like, making versus buying and all of that sort of stuff. And and, and now I'm starting introduce, she's 10, I'm starting to introduce the concept of compounding, and I really want her to understand that, because I think that's probably one of the most powerful concepts when it comes to, to money and, and building wealth. But when I talk to
Speaker 2: Yeah.
Speaker 1: just kind of, like, gloss over. And I have to really make it relevant to, to things. You know, it's
Speaker 2: Mm-hmm.
Speaker 1: ... buying a car or, you know, buying the thing that you want. Like, this is how... but, and I'm kind of hoping that that thing eventually will become more like a house or an investment.
Speaker 2: Investment, yes,
Speaker 1: Rather than... 'Cause obviously for them retirement's, like, totally, you know, not interested right now. But yeah, so I'm trying to find what's, what's the thing that will motivate them to be interested in what I'm talking about. So yeah. But it's, it's we need to, we need to have those conversations and that education.
Speaker 2: Yeah, the earlier the better. If I had that, those conversations I might not have had some debt along the way that I needed to have, like, sacrificed my time to pay off, for example. And I think most people will end up, if not in their mortgage, but at some point have to deal with debt. Which is which is quite stressful.
Speaker 1: Yes. Yes. I, I ended up there in my 20s, and sometimes it's probably, it's just trying to make it not too dramatic so that it doesn't take you too long and pay you much interest to get out of. So yeah. But I, I, there's probably a little bit of a, you know, you make mistakes, you learn from them kind of thing. But at the same point if we can lessen the, you know, the magnitude of the mistake.
Speaker 2: The mistake, exactly.
Speaker 1: Yeah. Yeah. Awesome.
Speaker 2: But yeah, no, I do, I do... I don't teach my, my daughter. I, give my, my wife some, you know, direction. When it comes to money and financing and stuff, I build the, the Excel platform for her to then go in and, and
Speaker 1: Play
Speaker 2: if you will. Play
Speaker 1: Yes.
Speaker 2: ... and, and you know.
Speaker 1: Yeah.
Speaker 2: 'cause she, she, yeah, she's on top of most things in the household I guess, so...
Speaker 1: Yeah.
Speaker 2: But yeah, no she, she's also... I mean, when, when it was COVID she would listen to all my calls about, "Past performance is not a reliable indication of future performances, da da da da da," and we would have to explain to each client about obviously the, the drop in the markets, and everyone was calling about that. And so, yeah, so she picked up
Speaker 1: This April. March 2020.
Speaker 2: Oh, exactly. March 2020. Oh my goodness, I was doing five, five, six appointments a day.
Speaker 1: Yes.
Speaker 2: Clients,
Speaker 1: But you talked them through
Speaker 2: Fun times.
Speaker 1: Yeah.
Speaker 2: You, you talk them through it and you talk yourself as well, you, you motivate yourself as well in the
Speaker 1: Yeah.
Speaker 2: because your, your money is going, doing the same thing as all your clients. So we're all in this thing together, and that makes it easier to discuss it with my clients as well.
Speaker 1: Yeah. It makes you a more relatable advisor, so no,
Speaker 2: Exactly.
Speaker 1: ... that's wonderful. So if people want to find out how to work with you or more about you, how do they go about doing that?
Speaker 2: Yeah, so we can... We've got a, a LinkedIn profile. So I'm on LinkedIn as an individual and DreamWise Financial Services.
Speaker 1: All right
Speaker 2: I've got my
Speaker 1: Love
Speaker 2: Dream, DreamWise as well. It ha, in you can go straight to my website and, and sort of just schedule or, or let us know about your inquiry and then we'll get in touch with you and and schedule what is called a no obligation initial meeting. And it's just to understand the situation and what the client wants to achieve and and, and then to see whether or not we can actually provide those sort of services and and help the client ditch, ditch that or respond to their concerns Yeah. ... But that one is no no obligation there. Thereafter, we'll then discuss things like, you know the, the, the upfront charges, et cetera.
Speaker 1: Yeah. Wonderful. Well, we'll put the, the links to, to your website and your your LinkedIn profiles in the, in the show notes so people can, can peruse that a bit more.
Speaker 2: Perfect.
Speaker 1: thank you so much. I really appreciate everything that you shared and and your insights.
Speaker 2: Thank you. No, thank you, Alfa, much appreciated and thank you for, for listening and keep doing what you're doing as well in your space. We need more people like you.
Speaker 1: Oh, thanks very much. All right everybody, well, I will leave you there to, to think about everything we just spoke about, and have a wonderful week and I will catch you in the next episode.
