Great business owners are known for their ability to take a strategic view that maximises business growth, while minimising unecessary risk. However, many fail to take a similar view of their personal finances – and this could be impacting their potential to create a long-lasting financial legacy.

When running a business, it is important to take a holistic view of your operations. You need to have a solid understanding of where the risks and opportunities lie, so you can build value and grow in the marketplace.

The same can be said for personal finances. Without an overarching strategy that considers your personal objectives and goals, it is hard to make the most of your wealth. For business owners focussed on their commercial operations, this can be a particular issue – with so much time spent on the business, personal finances often come second.

As such, many end up holding substantial funds in their private accounts or simple fixed interest investments – often by default. In the past, this approach could deliver steady returns, with diversification, liquidity, and income benefits. However, in the current environment, investors are unlikely to be seeing the same level of returns as in the past. That is because today’s economic environment is very different than before the pandemic.

Low interest rates combined with higher inflation are working together to undermine returns from cash and fixed interest investments. ANZ Private Adviser Joel Fuller offers an example.

“If you lock your money away in a term deposit for 12 months, you’re not getting that much more than a 0.5% to 0.6% return. So, when you take inflation into account, the money's actually going backwards,” he says.

“Therefore, the more immediate need for clients today is to find solutions and have discussions about alternatives to cash.”

This could be as simple as putting together a portfolio that is still conservative, but seeks to generate a higher return, or looking at other non-traditional assets that are targeting higher returns. 

Rethinking your personal wealth strategy

Fuller says that before making changes to your cash strategy, it is important to seek expert advice. An experienced adviser can not only provide access to investments that may be unavailable to private investors, but they can also recommend which ones are best aligned to a client’s situation.

“We can provide some really strong solutions in the investing space, but it’s also about the wider relationship you can have with your adviser, who can work with you to manage your overall financial strategy,” he says. "It does just come down to understanding the client's needs, their objectives, their risk profiles, and their wider asset mix.”

Fuller says that another benefit of working with an adviser is that they have the time to focus on your personal investment strategy – something that many business owners do not.

Of course, some business owners prefer to use their commercial acumen to manage some of their own investment decisions.

“For example, some have property portfolios they like to manage themselves – or enjoy making stock market trades,” says Fuller. “In those cases, an adviser may be able to provide support for those financial affairs they have less interest in.” 

Getting your personal finances on track

For business owners seeking assistance with their personal financial situation, an ANZ Private Adviser can help. Like you do with your business, they can take a holistic view of your entire personal finances and structure, including SMSFs, family trusts and investments, and work with third party providers on other services like estate planning.

ANZ Private Advisers can take the time to better understand what matters most, before providing advice to help you towards your personal wealth goals. Not only that, but they can also work with your other professional advisers – lawyers, accountants, and brokers.

ANZ Private Adviser Angelique Poulakis says she enjoys developing complex and tailored strategies that are in line with an individual’s personal risk profile and goals.

“Regardless of how much money you have, everyone has a unique circumstance,” she says. “We work to understand what our clients are looking to achieve and then work with their professional network.”

“Business clients who have really complex needs need a solid foundation to build upon their existing wealth, while also passing that wealth onto the next generation.” 

Discover how an ANZ Private Adviser can help

Seeking professional advice can help you identify new opportunities to manage your portfolio’s risk and returns. An ANZ Private Adviser can work with you to understand your financial goals and create a tailored portfolio that reflects your needs and goals. Find out more and request a callback.