The team at KLI Group recently helped a client regain his financial independence. They did this by closely working with the client and his family dependants. Kelly Pillay explains how this was done.

Our client, Gerry (not his real name), ran his own successful business. Gerry was in his mid 40’s but over his lifetime, he had generously helped his family with their finances. This included helping them financially to purchase houses and investments.

When we first met Gerry, he was in meltdown phase. He had reached his mid 40’s and realised that he didn’t actually have a lot of assets. It was a relatively common scenario, where somebody earning a great deal of money tends to spend a lot of that money. So, Gerry thought his net-worth was building, when in reality, it wasn’t.

It was from this point that my team and I sat down with Gerry and began the financial planning process with him.

Throughout the discussions, it became apparent the issue confronting Gerry was more about money management and the interaction with members of his family, than it was about Gerry specifically needing a certain type of investment restructuring.

My team and I then went about implementing all the standard processes that financial planners do. This included reviewing superannuation and insurances.

Stepping up

This implementation work is really the bread and butter work of what most financial planners do. In order to step up as a professional, it required us to take on the more challenging role of mediator and mentor for Gerry and his family.

We started talking through the emotional issues that were in play with this family and at times, that was difficult.

The process began by asking Gerry to introduce us to the different members of his family. And so, by the end of the process, we were dealing with both sides of the family – our client, his parents and his siblings.

The next step was to appoint each family unit with their own adviser from the practice. It was at this stage that we began those difficult discussions about money with the affected parties. There was a lot of emotional undercurrent behind the money and how Gerry’s success was perceived by the other family members. It was also interesting to see how this family believed Gerry actually had the money to give them, when in reality, he didn’t. These family members simply didn’t understand that.

In the end, my team and I took over the management of Gerry’s and his family’s day-to-day cash flow and budgeting, including paying council rates and bills.

By doing this, we could sit down with each of them and tell them exactly how much money they were spending each month. This enabled us to have a conversation around money management and realistic spending, and what that meant for their lives, where they were heading and what they wanted to do.

By closely working with Gerry and his family, we were able to ensure that Gerry was able to balance off all the complex financial arrangements he had with the other members of his family.

It’s taken a couple of years to do this, but we’ve been able to clean up this situation. There are no loans between family members and all the other financial and emotional baggage has been sorted out. By doing this, over $1 million has come back into Gerry’s pocket.

By restructuring Gerry’s financial affairs to a successful outcome, the family relationship now works and Gerry is feeling much better about that.

And what is particularly pleasing for me is that through the KLI Group’s intervention, not only have we retained Gerry as a valued client, but we have also added his family members as clients too.