Steven Travis explains the thinking behind Sunsuper’s On Track financial planning service.

Andrew May and Peter Bowman explain how a new book can help planners and clients survive the various crises often sparked by redundancy.

Chances are that all financial planning businesses across Australia have had to deal with clients who have had their posi­tions made redundant as a result of the global financial crisis. Financial planners, like recruitment agencies, are often the first line of defence for people who have lost their jobs.  Unfortunately, recent statistics show that redundancy in Australia is on the rise and this rise is set to continue. In July, the unemploy­ment rate rose to 5.9 per cent. The unemployment rate is viewed in an economic sense as a lagging indica­tor, meaning that it’s probably going to continue to increase in the near to medium term.

Redundancy of course is a part of a normal economic cycle – and clearly that’s the statement of an economist. What starts as a percent­age quickly becomes very personal for those who find themselves out of work.  The immediate response for any professional assisting a client with financial advice around a redundancy is to jump in and cover off all of the relevant issues:

  • understanding leave and redundancy entitlements;
  • minimising the tax paid on your redundancy payment;
  • maximising government entitlements;
  • managing your cash flow, debts and expenses;
  • maintaining insurance where appropriate;
  • working out your superan­nuation options; and
  • re-building your personal financial and retirement plan.

So how can advisers best help their clients deal with issues outside of the financial ones? This topic is discussed in a new book, Between jobs – a redundancy survival guide. Writing the book provided first-hand experience of the impact redundancy can have on individu­als, families and their relationships. National financial planning business, Financial Services Partners, contrib­uted two chapters to the book – one on building a financial battle plan and another on looking after your finances. The book is written for those people who find themselves between jobs, as well as for their spouses, partners and friends. The book can also be used by responsible organisa­tions who are dealing with retrench­ment, to help their staff cope with what is a life-changing situation. It’s also a tool for financial advisers to use to help their clients get through redundancy.

In dealing with everyday life, one of the first questions we are asked when we meet someone new is, “So what do you do?” If the job title alone defines you, and you are between jobs, this question can now fill you with horror. Defin­ing yourself through only one aspect of your life – whether it is your career, a relationship, or financial status – is a recipe for unhappiness. Why? Because who we are is much more than our work alone. Who we are is something that can’t be taken away from us – unlike a job.  For some clients, the impact of losing their job can be just as devastating as a relationship break-up, divorce or even the death of a loved one. In situ­ations like this, people will typically move through a five-stage grieving process. The stages are: denial, anger, bargaining, sadness, and acceptance. It is a very natural and normal process, so it is important that you allow your client time to express these emotions, however fast or slowly they may occur, through the financial advice process. A good strategy is to help clients think more deeply about and explore all the roles and inter­ests in their life.

They might be a wife, a mother, a grandmother, a sibling, a friend, a dog owner, a fitness enthusiast, a musician, a volunteer, an investor, a student, a good listener, a great organiser. The list could go on. Remind them also that the skills they brought to the job are also the skills they walked away with and no one can take that away from them.  Research shows that the overall wellbeing of males is more dependent on having a job than females, so male financial advice clients typically are going to struggle more with their unemployed situation.  Try also asking this question: “What’s the number one thing I could take away from you right now that would hurt you the most?” Chances are, even though they are unemployed, those things that are really important to them, like family, friends and health, are still important. Now might be a good time for them to reconnect with them. After all, how many people do you think would like to be remembered for having spent more time in the office or workplace during their lifetime?  Often the closest people to the person who has been made redundant will suffer stress too.

It’s important that the financial adviser giving redundancy advice remembers this, as the impact is often greater for them than for the client who finds themselves between jobs. Maintaining and nourish­ing healthy relationships is an important part of dealing with redundancy and it is not uncommon for marriages to fail in some instances. Encourage clients to talk openly and honestly with family. Open communication can help avoid outbursts that occur as a result of pent-up emotions.  Redundancy advice also provides advisers with the real opportunity to be a positive force in a client’s life. Optimistic thinking and focusing on all the good things in a client’s life can help them succeed both in the short and long term. While negative thoughts can get on top of them very easily when they’re unemployed, it is important to remember that although they’ve lost their job, it is not a life-threatening situation.

People never make good decisions when they are panicking, and advis­ers are in a position of influence. Arming yourself with the right support and information as well as the right mindset, you and your client can work through the difficulties of redundancy. Who knows, they might even find that it finally gives them or their partner that chance to slow down and take stock of what’s really impor­tant in their life.  Many people have said that their redundancy was possibly one of the best things that ever hap­pened to them. Obviously not at the time – but they eventually gained a totally different perspective on work, their relationships, their life and their goals. In researching the book, here is what some people said to us:

  • “It forced me to get out of my comfort zone and reinvigorate my career.”
  • “I never had enough time to exercise and get fit, so I used my redundancy as a time to get myself back into shape again and I’m fitter now than I was 20 years ago.”
  • “I had no idea how much of a rut my life had become. After healing the wounds, I went back to university to study psychology, which was something I’d also wanted to do but never had the time [to do].”
  • “I now have a consulting business, travel­ling the world, and I get to take more than three months’ holidays every year with my wife and two children. I’m so much happier and relaxed. As my children continuously say, ‘Go figure.’”

Yes, redundancy is an end. But it can also be a brand new beginning. Be prepared to go through an emotional roller coaster, but after the dust settles, also be prepared to broaden your horizons and look for some exciting new opportunities in your career and in your personal life.

Join the discussion