How to look after your business clients

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In the lead up to June 30, financial advisers need to think beyond superannuation when providing advice to their business clients, according to Andrew Pavuk, author of Nobody Else’s Business.

Pavuk said business owners are facing uncertainty of profits and personal income each and every year. “Advisers should therefore be encouraging business clients to conduct a yearly review of trading activities via a process of treasury planning.”

Treasury planning assesses cash flow and future business requirements and identifies how excess cash requirements can be used either inside or outside the business.

While extracting wealth from a business is crucial to the owner’s personal security and retirement, Pavuk said many are so busy working in the business, they don’t think about their future financial security.


“This means they run the very real risk of not building up their own personal wealth. While financial advisers are ideally placed to help, some may be missing the opportunity,” he said.

Pavuk said there were two main ways business owners can build personal wealth:

  1. If they plan to keep or close the business, they can gradually and continuously extract wealth from it to invest elsewhere.
  2. If they plan to sell, they can keep wealth in the business and pay themselves out of capital proceeds when they sell.

There are other possibilities however, including putting money annually into superannuation and separating business assets such as business property from the business and putting them into a superannuation fund.

Pavuk said financial advisers can play a leading role in advising which method is likely to be most appropriate and where, when and how to invest excess profits.