Welcome to Adroitness, the official Adroit Insurance Blog, where our team of insurance experts provide advice and insights into current and emerging trends.

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Teaching Children About Money

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Most parents know the importance of teaching children to read. But few place enough emphasis on teaching them about money.

Financial illiteracy among children is an epidemic. A recent OECD Pisa study found that only 15 percent of 15-year-olds were able to make simple decisions about everyday spending. That’s devastating.

Financial responsibility means clever saving as well as smart spending. If children don’t learn financial responsibility at an early age, they may have difficulties dealing with money as adults. Schools are beginning to recognise that financial literacy is a core life skill, which needs to be taught, but progress is slow.

Here are some easy tips for parents to get their kids on the right track to a prosperous future.

3- TO 5-YEAR OLDS

Once children enter preschool, they have – hopefully – learned a little bit about delaying gratification. That’s a good time to begin teaching them about money. Children this age are able to understand that they may have to save up for something before they can buy it. Lessons like having two piggy banks, one labelled “spending” and one “savings”, can create visual and physical boundaries.

6- TO 10-YEAR OLDS

As they enter school, children should become part of the family financial responsibility plan. Discuss purchases with them. Let them into decision making. For instance, is it worth 50 cents more a jar to buy a name-brand applesauce that tastes just as good as a less-expensive generic one? The important lesson for them to learn during this time is that money is finite. As a limited commodity, they have to decide what is important and find ways to get more bang for their buck.

11- TO 13-YEAR OLDS

Teaching children about anything gets tricky once they enter the teenage years. Move away from piggy banks to digital apps. FamZoo, for instance, is an online, virtual family bank. Funds are managed by the banker (parent) in IOU accounts or prepaid cards. Parameters are almost limitless. Parents can set up automated allowances, offer rewards for doing odd jobs, set up “payroll” withholding to be used for saving, set up budgets and more. Manoeuvring through the apps such as FamZoo will prepare teenagers for managing savings accounts, balancing a checkbook and creating a personal budget later on.

Last, but certainly not least, be a good example. Your children are watching your every move – and purchase.

This article does not consider your personal circumstances and is general advice only – unless otherwise stated. You should not act on any recommendation without considering your personal needs, circumstances and objectives.  Adroit Financial Group recommends you obtain professional financial advice specific to your circumstances.

Source: Allianz Insurance

7 Classic Financial Quotes

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Sometimes in financial strategy, the best tactic is to call on the advice of those who have come before us. You’ll find that more often than not, the best advice is timeless, and considering it can bring you back to basics – grounding your mind in what your true financial goals are. We asked our team at Adroit Financial Group for some of their top finance quotes. Consider these the next time you need some extra financial guidance.

Ash Dowie – General Manager

“Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t, pays it.” – Albert Einstein

Most people relate compound interest to debt, however, it is as beneficial to those who are willing to save and make money, as it is detrimental to those borrowing it. Basically, compound interest is the act of having money invested and allowing it to accumulate over that period at a rate of interest/return, then allowing that increased amount to make more money. The lesson…use the power of time, start early and let the money work for you while you sleep.

Samantha Clarkson – Financial Planner

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful” – Warren Buffett

This quote is in relation to contrarian investing. This means we should aim to ignore the emotional factors at play, and go against the masses: buy when the market is low and stocks are underpriced (when others are fearful, and selling), and sell when the market is high and stocks are over-priced (when others are greedy, and buying).

Bart Healy – Financial Planner

 “By failing to prepare, you are preparing to fail.” – Benjamin Franklin

Although not a financial quote, it’s definitely applicable.  I like this quote as it’s how I approach my work; I’m one of those people who writes a list each morning with what I need to do for the day and then plans accordingly.  It’s the same for personal insurance – with some foresight and good advice; you can start planning for the unexpected.

Annette Ros – Financial Planning Assistant

“Planning is bringing the future into the present so that you can do something about it now.” – Alan Lakein

We all have goals in life that we want to achieve, whether it’s achieving the great Australian dream, developing your own business or raising a family.
All goals are different, but one thing they have in common is that there is always a plan outlining the steps required to reach that goal. Putting together a plan now, can provide comfort and peace of mind – if something happens, you are prepared and what you have worked hard to accomplish is protected.

Lisa Tran – Financial Planning Assistant

“Think ahead. Don’t let day-to-day operations drive out planning” – Donald Rumsfeld

It is important to make time during your busy day to prepare for the future. Having a financial strategy in place is important for creating wealth and protecting what you already have, as success will not come to people who do not take action.

Matt Hills – Financial Planner

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for” – Robert Kiyosaki

My view on the above quote is to spread your risk! Don’t have all your eggs in one basket. This will help maintain and grow wealth.

Sean Myles – Practice Manager

“Someone’s sitting in the shade today, because someone planted a tree many years ago” – Warren Buffett

With any financial strategy, it is important to realise that it will take time to achieve your financial goals – it won’t happen overnight. But with the right environment (a strong and prosperous economy), proper pruning (reviewing of strategy), water and fertiliser (contributions and reinvested dividends) a seed (small initial investment) can grow into a magnificent tree (a really fruitful investment). Truly great things can grow from the smallest of beginnings.

This article does not consider your personal circumstances and is general advice only – unless otherwise stated. You should not act on any recommendation without considering your personal needs, circumstances and objectives.  Adroit Financial Group recommends you obtain professional financial advice specific to your circumstances.

How will your business be affected by new data breach laws?

This problem is going to need everyone's imput

Like you, many consumers are concerned about how their personal information and valuable data is being used in this tech savvy age. As a result, Parliament has passed a new bill for mandatory data breach notification laws.

This bill is an important step to highlight the importance of consumer data protection although there have been some fears in the business community about the consequences and potential costs associated with these new laws.

Any business that suffers an eligible data breach will now have to report the matter to the Privacy Commissioner and any party whose data has been compromised must be notified by the business. An eligible breach can include unauthorised access, disclosure or loss of personal information held by a business which is likely to result in serious harm to the individual or customer which that data relates to.

“Cyber exposure is the fastest growing risk for SME businesses and Deloitte expect there will be 10 million cyber attacks in Australia in 2017,” says Adroit Professional Risk specialist, Anthony DiFlore.

Experts estimate a data breach could potentially cost businesses between $150 to $350 per record. If 1,000 records were breached for example, then the cost could skyrocket anywhere from $150,000 to $350,000.

The large costs associated with a data breach can potentially include:
- legal fees to manage an investigation by the Privacy Commissioner
- fines imposed by the Privacy Commissioner of up to $340,000 against directors and executives personally or $1,700,000 against the company.
- costs of forensic experts to find how the breach occurred.
- costs to fix IT systems and upgrade security.
- ransom payments made to cyber criminals to unencrypt data.
- loss of clients, new contracts and revenue due to adverse media.
- public relations costs.
- civil proceedings from those affected, including legal costs and damages.
- financial fraud and any ongoing credit monitoring costs.

The list goes on. Those affected by the legislation included any business with over $3 million in turnover, smaller firms that handle sensitive client information like healthcare professionals and most government agencies.

A business that is not prepared and uninsured for a data breach is risking significant financial loss should one occur.

To ensure your business is protected, download our full Cyber Security Essentials kit here, or get in touch with Adroit Professional Risk, our cyber and privacy experts, on 1300 6923 7648.

Review Before You Renew

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We all have things we subscribe to that end up not fitting our needs down the road. Maybe it’s that magazine you subscribed to back in 1992, or the gym membership that you haven’t used since you finally started fitting back into those jeans. Your insurance policy shouldn’t get lumped in with these things.

It’s one of those things that’s misunderstood; your policy is not something that you just set and leave as it is. It’s something that you should always be reviewing, in conjunction with your broker. – Damon Edwards, Branch Manager.

 

Insurance policies renew automatically, but you’ll be notified by your insurance broker or financial adviser before that happens to see if anything has changed. This is the perfect opportunity to review your insurance policies and ensure your coverage still suits the needs of your business.

Here are a few examples of changes that could affect your insurance cover:

  • A significant increase (or decrease) in revenue
  • A significant increase or decrease in stock
  • A purchase of a new asset like a property or piece of machinery
  • A change in business activity
  • A change in market conditions

These business milestones, like growing your staff, opening a new store or upgrading to the latest equipment, are exciting. They can change your life and improve the profitability of your business. As much as they change the way your business operates, they also change the requirements of your insurance policy – and sure, that takes some of the romanticism out of it, but these are the assets you’re working so hard to protect.

Life grows along with you, so make sure you enable your insurance policies to do the same. Your Adroit Insurance Broker or Financial Adviser will get in touch with you to review your insurances, so take that opportunity to update them on any changes in your life or your business. If your broker or adviser doesn’t do this, talk to one of our trusted Adroit Brokers for a free no obligation insurance review.

Balancing the Scales in a Hardening Market

Imbalance

By Bernadette Vanderwolde

In the past few years there is no doubt we have enjoyed the “premium scales” being in our favour.  We were in what we commonly call a “soft market” and in most cases, premiums were heading in a downward cycle.  We have seen the scales start evening out and reports are now saying the scales are tipping.  A major crash is not expected, however, we are slowly moving toward a “hard market”.  This change will inevitably bring higher premiums for most businesses. Adroit Insurance Group brokers are always focused on achieving the best outcome for their clients, regardless of the market conditions.  Below are a few tips to help you balance the scales in your favour –

  1. Relationship with your broker

The relationship with your broker at this time is critical.  Your broker is dedicated to working with you and to truly understand your business as well as the current market conditions.  They can assist and direct you based on your individual circumstances.

  1. History with your existing insurer

Consider and review your existing insurers.  Getting alternative quotations is common in any market but the relationship with your existing insurer will, in most cases, assist to reduce the impact of any premium increase.  All insurers will be under pressure to increase their gross written premium and improve their overall results.  The benefit to you is two fold.  Firstly they understand your business but secondly and most importantly they have collected premium from you for a number of years.  This assists in keeping premiums to a minimum, particularly if you have had no claims or only one or two small claims.

  1. Consider the policy excess

It is always relevant to review your insurance cover in detail.  One consideration is the policy excess.  The policy excess allows you to take on more of the risk yourself and can often mean premium savings.  The cost benefit analysis will differ in every circumstance but it is certainly something worthwhile to consider.

  1. Risk mitigation strategies

Insurance companies love clients that want to protect their own business – the lower the risk of a claim, the cheaper the premium.  They will often provide considerable savings to clients that adopt effective risk mitigation strategies.  Ensure you have considered all risk mitigation strategies and ensure your broker/insurer is aware of the strategies you’ve adopted. Often we see clients take very effective internal risk mitigation strategies but not make their broker/insurer aware of these.  They may be simple or complex strategies but make sure you consider them.  

  1. Claims management

If you have a high level of claims, it’s important to do what you can to manage them. This is particularly relevant for areas of insurance where claims are inevitable, for example, large motor vehicle fleets. While the odds are that you’ll have to file more claims than someone with just one vehicle, there are strategies you can put in place to reduce the number. Make sure you are working with your broker to gain an understanding of how/why/when your claims are occurring and as above put in place strategies that can reduce them.  By reducing either the number of claims or the total costs of your claims you will be in a better position to reduce the costs of your insurance or mitigate any increases.

Adroit Insurance Group brokers are always available to discuss these and other strategies with you.  We value all of our clients, and we want to ensure you get the most from your insurance programme.

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