Cashflow modelling has come back into fashion, says Sam Carroll, who’s an adviser with Talem Wealth.
This is particularly true in Sydney, where a lot of clients are “staring down the barrel of million-dollar mortgages,” as Carroll describes it. “They know they’re going to have to be really clever in how they invest and save so they can afford to buy a home.”
It’s within the younger demographic – usually between the ages of 35 and 55 – where Carroll has been focusing his efforts and where Talem is growing its client base.
“Our client base is starting to skew younger, and I think because I am in that age group myself, any chance I get I tell my friends and associates the importance of managing your money properly,” he says.
Carroll’s advice philosophy is rooted in the advice business his father, Paul, grew over 23 years. Sam Carroll took over the business three years ago and has found the goals-based philosophy resonating with a new generation. He now has eight full-time staff, two advisers including himself, and roughly 250 to 300 full-service clients.
“Dad’s business was very much a goals-based advice business,” he says. “It was about cashflow modelling, and seeing what people could afford, then putting the necessary strategy in place.
“The fundamentals of that approach have not changed at all, but I think we are now attracting that younger group, as well as retirees, who are interested in wealth coaching and cash flow, more so than they are about superannuation, at that age.”
In some circles, goals-based advice can get a bit of a bad rap for being overly simplistic, Carroll notes.
For instance, Scott Pape, the no-nonsense, straight-talking ‘Barefoot Investor’, often gets perceived in institutional wealth management circles as proffering an overly simplistic view of consumer finance. Some advisers might be dismissive of his broad appeal among Australians – despite the fact his book, The Only Money Guide You’ll Ever Need, has sold more than 1 million copies – Carroll acknowledges.
But Carroll sees it a little differently.
“It’s been a while since I read his book so I can’t speak for the nature of his advice in great detail, but I do like the fact that he has people thinking and talking about their finances,” he says. “The advice he gives on cash flow is very solid, and his concept of setting up buckets to manage money is a really great concept.
“So while he does get a bad rap by some advisers, in a way his success is not a bad thing, in that more people are coming to us with a real interest and enthusiasm for getting on top of their finances and getting ahead.”
Carroll notes that advising a younger group of clients involves a fair degree of behavioural economics.
“It’s not so much that people aren’t earning enough, it’s more that they tend to spend more, the more that they earn,” he says. “They will often say that they work hard, so they spend money to reward themselves. We have so many consumer goods that we can spend money on now, and people just put it on the credit card.”
Carroll took to managing money – his and other people’s – early on but even he is surprised he followed his dad into the advice business.
“I never thought I would do it, but I worked at the business part-time during university and I started to see the impact it had on people’s lives,” he says. “I would see people come in quite dejected that they weren’t enjoying work at the moment because of a new boss, but figured they couldn’t afford to retire, and Dad would be able to tell them that, actually, they could retire.
“I have seen tears of relief in that office.”
Name of firm: Talem Wealth
Name of licensee: Financial Wisdom
Years in the industry: More than 10
Academic qualifications: bachelor of business (financial services); advanced diploma of financial planning; Certificate IV in finance and mortgage broking
Professional association memberships: Member of Business Risk Institute of Australia; FPA
Other memberships: Wealth expert for NSW Leaders