Do clients always need an offset account? Will it always add value or is there an alternative?

Over the years I have had a lot of clients tell me they need an offset account. Typically this was because one of their peers had given them the barbeque advice so it meant they were right.

After reviewing some of the clients positions and looking at what disposable income they had, I challenged them as to how much non committed income they could put into the account? After a blank stare they would say “not much.”

Whilst we all understand that every dollar in an offset can help reduce the clients loan duration, there are probably a lot of clients who would be served better with a low rate variable loan with unlimited redraw that can still be used as an offset capability, ultimately saving them more by not having the large annual fee.

The message is really to just listen to your clients, but don’t simply take the order and ask “do you want fries with that”? A lot of brokers take the easy option be it either brand or just because it was what the client wanted. As credit ADVISERS we are responsible for giving our clients the best available solution for their specific circumstances.

Remember, if the clients aren’t seeking your advice they may as well go direct to a banker who can take the order and move onto the next victim.

Have any questions?