A three-decade financial adviser’s advice for FAPs

“Don’t engage your spouse as a director, unless your spouse actually works in the business, because directors take on significant personal liability,” he said during the FSC event. “And if your spouse isn’t a day-to-day part of the business, why have him or her taking on that liability when they really have no control over it?”

Biggest risk for FAPs

Aside from putting the wrong people on board, one mistake Greenslade sees is how businesses often approach risk from the wrong perspective.  

“As a small or medium-sized business owner, we should be looking at risk and going, ‘What is the biggest risk to our business?’” he said. “And the answer for me is inability to make any money. And so you go, ‘Geez, what’s going to stop me from making money?’ Well, that could be, I lose my licence or my licence is suspended, or if there’s a complaint and I’m kicked out (if I’m a mortgage-based FAP) of an aggregator group. So, therefore, I can’t go and join another group while the FMA has got some form of investigation underway.

“So, what you’ve got to look at is, if loss of license or suspension of license is my single largest risk, then what do I need to do to ensure that doesn’t happen? Sure, cybersecurity is all important, but that’s lesser risk than not being able to run your business, really, from that sort of perspective.”