The Royal Commission into banking and superannuation has grilled financial institutions and exposed, in some instances, practices which have horrified their customers.
Frankly, those exposed have blatantly taken advantage of the trust their customers have given them and deserve to be embarrassed.
Given the multi-billion dollar annual profits made by a lot of these financial institutions, most of their customers probably had an inkling, a suspicion, they were being overcharged in some areas. But the Royal Commission exposed an almost systemic program of customer rip-offs.
It took some pretty aggressive questioning to reveal the truth behind what was going on.
Does this sound familiar on a personal level? Do you have similar suspicions about your personal finances and the role of your partner in managing your money? Do you need your own personal Royal Commission to get to the truth?
When we talk about suspicions, we mean those nagging doubts about how honest your partner is when it comes to managing money.
You know what we mean. Things like:
• your money questions are met with evasive or defensive responses which leave you none the wiser. Responses like "no need to worry, don't you trust me" or "I'll check on it but it's under control". Even more worrying is an angry response out of proportion with the question asked.
• your partner refuses to have regular sit down meetings to go through your finances. Even when you explain it's for your own peace of mind in case they get hit by a bus, you're still never included in managing the finances.
• financial statements start to disappear. You can't find recent credit card or bank statements or investment files are missing from the filing cabinet. Even worse if your partner won't produce them or denies anything to do with them.
• there are unexpected cash withdrawals or transfers from accounts. When you ask your partner about them there is tension, nervousness or weird explanations.
• your partner asks you to sign documents without explanation or a chance to review. When you ask to read the documents you're told there isn't time or you wouldn't understand.
• strange phone calls or letters and emails demanding payment that you know nothing about. And you partner is evasive when explaining.
• you discover a secret account or credit card you never knew existed and you're partner doesn't explain it properly.
If a couple of these red flags start to appear together then you need to establish your own version of a Royal Commission, ask the tough questions and get some straight answers.
We it can be an uncomfortable position to be in because it questions your partner's loyalty to you. You're challenging them to justify and prove their loyalty. But remember your financial wellbeing and future is at stake.
When we talk to friends who come to us with concerns about their partner's control of the finances we use a very simple quiz as a starting point:
• do you have online access to all bank accounts?
• do you have access to the file with all the insurance papers, land title deeds, investment documents and wills?
• do you know your partner's salary and superannuation fund.
If the answer to anyone of these 3 questions is no, then you could have a problem and need to dig deeper.
For a start no-one should ever surrender responsibility for managing their money to someone else. Agreeing to delegate the responsibility to a trusted partner as part of an open and honest relationship is different. You're kept fully informed by the one you love and all major financial decisions are made jointly.
It's the secrecy and financial power of one partner over another which is a recipe for disaster and extremely dangerous. And it could hide something serious like a gambling problem, mounting unaffordable debt or straight out fraud.
Remember, if those debts are being accrued on joint credit cards or lines of credit, you are in the eyes of the law equally responsible even if you know nothing about it.
So take a deep breath and confront the situation with your own mini Royal Commission. Here are some steps to follow:
1. Ask for a meeting with your partner to express your concerns
Don't be aggressive, be calm, measured and explain you're feeling vulnerable and out of the loop. Don't be surprised if your partner is relieved to be put in this situation. They may have made a mistake which has careered out of control and they've been too embarrassed to tell you as they try and resolve it.
If they refuse to even meet and talk, then you have serious problem and need advice from a professional like a lawyer or accountant.
2. Forgive and forget, within reason
Weigh the situation rationally. But your partner should make some financial sacrifices, such as delaying other purchases, to get the family budget on track.
3. Agree on financial goals and a budget
If your goals and desires are significantly different, talk about how you'll set priorities and compromise. Try and come to an understanding about what is important to both of you.
4. Discuss your money styles
If you have different styles of spending, consider creating separate accounts so each has control over a reasonable amount of discretionary cash.
5. Agree to have regular financial conversations
Follow our rule of setting aside 15 minutes a month to sit down with your partner to talk money and your financial goals and priorities.