The Value of Fintech as a Financial Planner
Fintech as a Financial Planner, what is the value, a listener to our radio segment asks?
Fintech stands for to-fintech-in-2017/#102d53633340″>Financial Technologies that are used and applied in the financial services sector. Fintech is now coming to represent technologies that are disrupting traditional financial services, including mobile payments, money transfers, loans, raising capital and asset management.
Fintech have been around since 2008 and have been growing exponentially since then. They are now starting to have an increasing influence with small start-ups providing capital, mobile payments, and money transfers services. These services are making it easier than ever to start and run a business.
Would I suggest using an entity like Fintech as a financial planner?
Definitely not, it’s a bit like having a medical problem and visiting Dr Google instead of your GP.
A computer programme can provide a basic plan when you enter your financial details but we are not robots. We are all different with different problems, circumstances and aspirations.
The bottom line is people are better off getting individual advice rather than rely on a computer programme.
I have had clients in the Central Highlands for the last 35 years and it is sad that only about 20% of people have some sort of financial plan and of those only about 5 people in every hundred have an efficient plan.
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Here is an example of a client who thinks they have a good financial plan but in reality they don’t.
I have a client who is 59 years of age with a good job and solid income, intends retiring at 70, owns two residential investments unencumbered, owing nothing and he thinks that is sufficient.
He could improve the efficiency of his portfolio by buying another two properties for $500k each. He could use the equity in his existing properties and borrow 100% and finance it with a Principal and Interest loan. He’d reduce his income tax liability on his existing properties and the income from these properties will pay off the new ones.
If he borrows 100% plus legals, stamp duty etc. his equity in the two new properties, because of these borrowings, would initially be minus $34k.
His equity in 10 years would be approximately $1.2million.
By using the income from his existing properties, he borrows 100% to buy two at $500k and creates $1.2million extra in 10 years.
In simple terms, in Central Highlands region there are many people whose income could be likened to a supercharged V8 but they are travelling down the highway in first gear. I know some who are in reverse gear.
And whomever you go to for information has a bias to their product, which is not always in the client’s interest.
My preference is the high quality residential investments in Brisbane’s northern corridor. A survey of clients’ portfolios from a local accountancy practice over a period of 15 years proved my strategy is superior to all others.
I know that this is a pretty big call but the survey supports this. Apart from building a residential investment portfolio in the traditional manner using either a deposit or equity, I also assist clients with self managed super funds (SMSF).
If a client is interested in my assistance to build up a property portfolio in a SMSF, I arrange the property, the builder, the finance and the property management. I hand the setting up of the SMSF to my colleague Mr Peter Maundrell who is an accountant and a certified financial advisor.
Until next week …
Steve Taylor
Tired of using tools such as Fintech as a financial planner? Need help to start your residential property investment portfolio the right way? Please contact our office to schedule a free, no-obligation consultation and let’s discuss your options.
If you prefer to listen here is my radio interview on Emerald 4HI:
At the helm of Steve Taylor & Partners, Steve has been delivering expert advice and product knowledge to clients for over 30 years. We provide individuals, couples and families with the right strategies to create wealth and change their lives with solid bricks and mortar.
DISCLAIMER
Steve Taylor & Partners blog is opinion and not advice. Readers should seek their own professional advice on the above subject. The figures stated in this article were accurate at the time of publication. For up to date figures, please contact our office.
