by Erika Jonsson Meet Julia Schortinghuis, Lighthouse Capital Director and Good Money Habits podcast host
Julia Schortinghuis has been working in financial services since 1994. Her career began in commercial lending with the National Australia Bank, after which she worked as a stockbroker at Merrill Lynch. In the late 1990s she was promoted to the role of Vice-President within the funds management division. Julia joined the Lighthouse Capital team in 2006 and, as a Certified Financial Planner, works directly with clients to assist them with achieving their financial goals and objectives. Julia also hosts the Good Money Habits podcast.
Julia speaks to Six Park head of marketing Erika Jonsson about how the industry is changing and the most important lessons for investors to understand.
What was the first thing you remember saving for? How long did it take?
It would have been saving for my first car. My mum and my nan were quite progressive for their generation, and they ran a clothing store in Fremantle. I worked there from quite a young age, but I didn’t really spend the money I earned. I reached a point when my mum suggested that, instead of putting money in the bank, I could buy the bank.
I bought a bank share – which was on reflection actually quite risky, as a single investment – and reinvested my dividends, which was my first investment. Every quarter you’d either get a cheque in the mail or you’d get a notice of reinvestment.
That really opened my eyes to the power of compounding.
After three or four years, by the time I was ready to buy a car, I had the money to do that. With some help from my parents, I was able to avoid the need for a loan, which also set me up to avoid student loans and the whole thing really started me off financially in a really great way.
What motivated you to work in financial services?
I didn’t really know what I wanted to do when I left school, and so I did a fairly broad degree.
What I knew was that I wanted to help people and solve problems.
There have been a lot of career twists and turns on the way, but they have all been beneficial and brought me to where I am now. In the mid-90s, I attended the Godfrey Pembroke conference with my husband, Bernard, who was a paraplanner at the time. I was working in HR but I snuck into a lot of the financial planning sessions, and that inspired me to change directions.
It has been a journey. What I love about financial planning is the challenge and the continual learning.
Financial planning is one of the most multidimensional and complex professions I can imagine.
It’s both left-brain and right-brain, and it’s more than just maths – it’s also soft skills. It’s very personal and involves an unbelievable amount of trust from clients.
You’ve worked as a stockbroker as well as portfolio construction and funds management. What are the most important lessons for investors to understand?
Broking was a great learning environment for me, but I learned the most about portfolio management when I was working at Merrill Lynch alongside some incredibly smart people to understand the processes they go through for portfolio construction.
For anyone who’s new to portfolio construction, I talk through the fundamentals of understanding diversification, inflation, compound interest and dollar cost averaging as a strategy to reduce market timing risk.
People can tend to get fixated on picking the next winner, and that’s a lot harder than it looks. What’s more important is arriving at a mix that’s right for your risk profile and for what the markets are doing over time. ETFs can be a good vehicle for achieving diversification – and most importantly, time in the market beats timing the market.
How has the Banking Royal Commission affected advisers and their clients? What are the biggest positives and negatives?
From an adviser perspective, the declining number of advisers is evidence of the challenges facing the profession. There is a relentless level of change, including changes that are yet to be formally legislated, which has led to significantly increased compliance requirements. Ultimately, we want as much time as possible with our clients rather than working on compliance. There are also much higher education hurdles now for advisers – I moved quickly on that front.
For the consumer, there have been increases in cost for many people due to the combination of greater compliance and fewer advisers.
What keeps me awake at night is worrying about people who really need advice who may not seek it now because of the cost.
The Good Money Habits podcast is aimed at addressing that by building financial education and helping people learn how to change their everyday habits around money to meet their goals and objectives. I’m also pulling in experts for their experience and stories. There are some extraordinarily good advisers and the podcast is also aimed at sharing their insights on a one-to-many basis.
What differences have you observed, if any, in how and why men and women invest?
I’m conscious of not stereotyping, but what we do know from neurological science is that the male and female brains are wired quite differently.
From an investment perspective, anecdotally, some women lack confidence when it comes to investing, but I find that when I work one on one with my female clients, they tend to be really positive about learning new things and stick with their strategies.
What’s the most important lesson you’ve learned about money?
My team would say that I bang on about the power of compound interest all the time!
Aside from that, I think it’s important for people to understand, get organised, and have ongoing oversight of their cash flow. That’s essential.
I feel like there’s been a real societal shift away from the concept of delayed gratification. The buy now, pay later trend and societal norms around credit cards has resulted in many people finding themselves in financial stress and buried in credit card debt – there’s a huge burden from that, and we need to turn that around.
Six Park knows that confidence is an important part of investing decisions. The Women in Finance Q and A series helps women build their financial confidence by providing advice and inspiration from strong role models in Australia’s financial services community.