10 minutes with… BDO partner Lachlan Kennett
Business Insight sat down with BDO partner Lachlan Kennett to hear about his top tips for retirement prep and end-of-year financial planning tips.
Tell me about your career so far and what areas you specialise in at BDO.
I started out in the advice industry in 2007 shortly before the Global Financial Crisis and became a financial adviser in 2011. I have held a number of roles over the years, including time working with business banking clients at Westpac. With this background of providing advice to business owners, it was a natural fit to join BDO when the opportunity presented itself in 2020.
Given the strong business services and tax offerings at BDO, most of my clients now tend to be business owners and executives, along with a number that have been through that journey and are now successfully retired.
My role really focuses on empowering people to make good financial decisions. There is no shortage of information available when it comes to investing, so cutting through to the most important issues and helping clients make confident decisions is what I enjoy most.
What main services do you offer your clients in Adelaide?
Our local BDO Private Wealth team offers a holistic advice service. While a large portion of our work focuses on investment advice and retirement planning, we like to emphasise the relationship people have with their money and ensure they are empowered to understand how it’s being invested.
Many clients come to us because the options available to them are overwhelming and they want reassurance that their hard work will be rewarded in the future. Quite often, this means reassuring clients about what they need to do to ensure that their money lasts in retirement or assisting in building a legacy for future generations.
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In addition to investment advice, we pride ourselves on providing great support in the areas of risk management and estate planning. Contemplating the impact an accident or illness could have on one’s finances can be distressing, and this topic often gets swept under the carpet. Assisting clients through these conversations and seeing the sense of comfort our advice provides is incredibly rewarding.
In this current economic environment, what’s the main piece of advice you give your private wealth clients?
To make sure you have a good understanding of your long-term strategy, and to be realistic about what that ongoing journey looks like.
It is easy to get carried away with the fantastic returns achieved by most investments over the past 12 months. Coming out of Covid, we are now in a position where interest rates for investors have recovered from the lows of Covid, and share markets have more recently had a great run-up in value.
People need to remember the range of outcomes that come with each type of investment. This means that quite often, the conversation focuses on ‘taking profits’ during periods where markets are strong, to ensure they are protected should the momentum of markets reverse.
What are some easy financial decisions any Australian can make to set themselves up well for retirement?
I believe most Australians could be better off by being a little more proactive with their understanding of their financial position.
Unfortunately, we often meet people too late in their working lives, who want to drastically change their outcomes within a few years. So, having a conversation early around not only developing a plan but to make sure that it is achievable and where possible, automated.
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This can be easily done for some of the big planning goals like being debt-free by retirement or building a solid superannuation balance. Taking simple actions like increasing your mortgage repayments above the minimum, or starting to salary sacrifice to your superannuation can not only change your long-term outcomes, but importantly these are habits that are easy to maintain.
When should one consider setting up a self-managed superannuation fund? Is it for everyone?
Superannuation in general can be a fantastic environment for managing your long-term wealth. Whether using a self-managed fund or one of the various other options available, the superannuation system provides a great incentive to save for retirement.
We advise a large number of clients that have self-managed superannuation funds for a wide range of reasons. They typically offer clients more control over the operation or investment structure of their retirement savings, and for some people, this can create fantastic outcomes.
However, it is important to remember that there is a lot of responsibility that comes with having a self-managed superannuation fund, where you are responsible for managing the fund. Where with other funds, the decision-making is done for you, within a self-managed fund, the long-term outcome is dependent on the quality of the decisions made by you, the member.
The set-up of a self-managed superannuation fund is always an area that I suggest people get expert advice on and understand why they are committing to the ongoing management of the fund prior to going on the journey.
What’s the best time to approach someone like yourself for succession planning?
When it comes to succession planning, sooner is always better and I think there are two key points to remember.
Firstly, transparency is the key. Having everyone on the same page and able to communicate openly about their personal priorities for the future can solve a lot of problems. Ideally, this conversation is driven by an external person who can keep everyone on track and remove some of the emotion that can derail the planning process.
Secondly, the importance of planning early. Too often that difficult conversation happens too late. By starting the process as soon as possible, more options are available to all parties.
It doesn’t mean that you need to know all of the answers at the start of the process. Quite often we work with clients to implement strategies that provide options in the future and not tie them to a certain agenda. For instance, reducing an owner’s reliance on their business as a means to fund their retirement can provide greater options for how they choose to pass that asset onto the next generation.
As we head towards the New Year, what should Australians be taking a look at concerning financial planning in 2025?
The end of the year is always a great time for reflection and reviewing your priorities for the future.
There is always a lot of distraction and noise around investments, whether driven by elections, inflation numbers or any number of other news headlines. The investment space, like many others, does not stay still. However, cutting through this noise and focussing on your long-term priorities, along with the strategies we know work, is very powerful.
