160. When "I Do" Meets "Let's Do Business": A BrightRock Conversation

What happens when a business partnership faces an unexpected crisis? Much like a marriage contract that's never reviewed until divorce looms, poorly structured business agreements can lead to catastrophic financial consequences when partners die or become disabled.
 
 Sean from BrightRock delivers powerful insights into business assurance solutions that truly protect what entrepreneurs build. He highlights how traditional insurance approaches often miss the mark by charging business owners for lifetime coverage when their needs may be temporary. Through BrightRock's needs-matched approach, businesses can secure precisely the protection required for contingent liabilities, buy-and-sell agreements, and key person insurance—without paying for unnecessary coverage.
 
 The podcast reveals game-changing features like underwriting in bands of R10 million, allowing growing businesses to access significant additional coverage without further medical underwriting. This proves invaluable as businesses expand and owners develop health conditions that might otherwise make new coverage impossible to obtain. Sean emphasizes that premiums themselves become assets that can be repurposed when original needs expire, embodying BrightRock's three pillars of efficiency, flexibility, and certainty.
 
 Perhaps most importantly, Sean warns against the dangers of generic online agreements, sharing a personal divorce story that underscores why proper legal documentation matters. "Spend money on getting this right," he advises, explaining how BrightRock partners with specialised attorneys to ensure comprehensive protection. In today's world of information overload, qualified financial advisors become increasingly valuable navigators through complex business protection decisions. The episode serves as a crucial reminder that successful entrepreneurs must look beyond immediate concerns to establish proper safeguards for their business futures.

Chapters

• 0:00 Welcome to Know Your Money

Transcript

SPEAKER_00: 0:12

Hello everybody, welcome to Know Your Money. I'm Bron Man Weiner.

SPEAKER_01: 0:16

And I'm Craig Finch, and we are from Growth Financial Planning. We hope you enjoy our podcast.

SPEAKER_00: 0:22

Hello, everybody. We have Sean back from BrightRock here, and he is going to discuss what he's really passionate about, which is one of the features of Brightrock where they help protect businesses. Can you maybe let us know what features that you do have and how they work?

SPEAKER_03: 0:39

Sure, thanks, Bruno. Thanks for having me. Obviously, uh, business assurance is is is is uh it's a very big component of our business and it's a very big component of of uh of economics, you know. Um if you think about uh people that go into business together, um, you know, uh I I find it quite fascinating because you know we structure a buy and sell agreement, but very often those buy and sell agreements are not structured correctly, you know. Um and it's I I'm not too sure if any of you are married, but I you know I don't know if you're on a Friday night you you take out your marriage agreement and sort of sit down with your wife and and and go through what you agreed to to do and what okay is that dysfunctional?

SPEAKER_01: 1:23

I'm too scared to do that.

unknown: 1:25

I'm kidding.

SPEAKER_03: 1:26

Okay, but get divorced and see how all of a sudden that marriage agreement is uh because it's not a marriage agreement, it's a divorce agreement, right? It's the same with business assurance. You know, if you don't structure the stuff properly, uh and something happens, you know, a a partner dies in a business, and then you know, all hell breaks loose. And and if and if there isn't proper structured buy-and-sell agreements, it can result in estate duty problems, it can result in uh in in obviously businesses being uh dissolved, you know, in order to settle uh you know um the outstanding shares or the you know the the remaining partner or the deceased partner's spouse. So we looked at that and we said, okay, what partners' business assurance, okay, obviously a life assurance policy, a disability policy. And I go back to what I've said in previous podcasts, you know, um once again, you know, if you if you've got a a business insurance need, okay, so for example, uh a contingent liability. That contingent liability needs to be protected in the event of you being disabled or or dying. Okay, and what would the bank want you to have, you know, a life policy? So to just to securitize, and I probably, you know, in a lot of instances they would want that um, you know, uh a seated and collateral in a collateral session to contingent liabilities are owe money to the bank. You owe money to the bank. Now the the thing is that let's say that contingent liabilities for five or ten years, okay. I buy a life policy. Again, I go back to what I've said in my previous uh discussions, is that policy is costed to 810 to all of life. But my actual insurable need is for five years or ten years. So with Bright Juck, you can buy that need for that period of time. And as I've said before, when you come to the end of that need, all right, your premium, which is an asset, okay, it's a predictable premium, it's a fixed percentage increase, can be used, okay, to either cede that policy over to yourself, okay, and and uh in an absolute session and obviously capitalize your state.

SPEAKER_01: 3:26

Maybe you bought maybe you've borrowed more money and you can use the money.

SPEAKER_03: 3:29

And if you've borrowed more money, as I've mentioned before, okay, we underwrite you in bans of 10 million, okay? Okay, you get access to that medical underwriting free cover, you know. Um and again, these are all very unique features. And for a business person, what that means, okay, is that you're gonna pay less because you're not being charged for cover that is unnecessary. And also do medical ones. Yeah, absolutely. Do medical ones, you've got access to you know, yeah, and and as we all know, you know, business can be stressful. You know, so you know your life you you you can develop blood pressure problems. Yeah, yeah.

SPEAKER_02: 4:00

Yeah.

SPEAKER_03: 4:00

I believe. Yeah. So but but yeah, so that's the one side of things. Uh, you know, that that you could also have a reliability that is is depreciated. A product can do that for you again. You know, bearing in mind your premium is an asset, right? And you can use your conversion facility.

SPEAKER_01: 4:18

But maybe as a business expands, you need more cover to cover the shareholders' agreement. Absolutely. You've got to do that.

SPEAKER_00: 4:23

And in terms of the buy and sell, so you were doing that that 10 million ban thing. Is that just on the contingent liability or would that also be on the buy and sell agreement?

SPEAKER_03: 4:33

It's on everything.

SPEAKER_00: 4:33

So if I've got a hundred and seventy-five thousand rand um as as business assurance, you're saying that there is cover up to ten million. So if that business really starts to do well, it's I'm actually underwritten for up to ten.

SPEAKER_03: 4:48

Correct. And if you and if you and if you take out a ten million in one rent policy, we'll underwrite you up to twenty.

SPEAKER_00: 4:55

Which is really helpful, especially in businesses, because like you were saying, Warren, when you start up a business, it's worth a hundred Rand, basically. And you can take that insurance out now. But then if you in five years' time now you've put all your blood, sweats and tears and you have high blood pressure, you can't get it again. You've you've got that up to ten. Yeah.

SPEAKER_03: 5:16

And and and and and you know, uh obviously a product can structure to meet any need, be it a buy and sell agreement, you know, be it a a contingent liability. I mean, I find it fascinating, right? So if you look at if you look at key man insurance, okay, how do we underwrite key man insurance? Okay, and it differs from company to company, but generally as a rule, okay, it's it's it's your annual salary times three. Okay, it can differ. So I don't want to be quoted on that, but but but we sell the whole of life policy. Yes.

SPEAKER_02: 5:45

Yeah.

SPEAKER_03: 5:45

But because you know, if you haven't replaced a key individual, yeah. If you haven't replaced a key individual within that's not a key individual, right? Then you're utilizing that, okay, to to to capitalize your business. Okay. Uh and that's fine. I mean, no one's no one's saying that that's wrong or right. Um but again, you've just got that flexibility, as I've mentioned before, in those three pillars, you know, that efficiency, flexibility, and certainty. Uh you've got that flex flexibility that I think flushes through to match those uh uh business needs. You know, we've actually developed a a b a bright rock for business grid, you know, um that that that we have available to our advisors. So it helps determine what cover you need to initially. Because like for example, business insurance, you don't need childcare net, right? Yeah, yeah. You don't need healthcare need. Yes. You know, it's it's it's very often capitalized in nature.

SPEAKER_02: 6:37

You know, the the way you described it earlier is um how you create a profile for people. That's um do you do the same thing for a business? Is it personalized to the business? Yeah. Same idea, same concept.

SPEAKER_03: 6:49

Same con the same concept. You know, we we also provide uh ancillary support services. So we work with two very um experienced uh attorneys. Uh the one is uh is an estate specialist, the other is obviously a business assurance specialist. Um we we work with advisors because you know I I I find it quite fascinating, and forgive me if I if I'm sounding um judgmental here, you know, I'm I'm not an advisor. Um I'm very passionate about advice and about advice giving. Um and um and and uh contrary to a lot of people's thinking, I think advice giving is becoming more and more important in time. People have this this plethora of information, you know, hitting them. I mean, gifts and uh stuff, you know, all kinds of social media. Okay, I want to look at my kids. I mean, it's a great babysitter because when I arrive home, I don't even know they're there. Okay, they're stuck with their face with a blue screen on it, right? But the reality is people with with access to a glut of information now need someone to sort through that information, you know. Um and very often I find that that that people are quite flippant about about their buy and sell agreements, you know.

SPEAKER_00: 7:56

Well they have the they have the policy, but they don't have the actual buy and sell agreements in place.

SPEAKER_03: 8:01

You know, it's correct. And and I'm I as I said before, I'm no blue, I'm no advisor and I'm no lawyer, okay? Um but I look at some of the buy and sales, I see, and all I see is an accident, you know, coming down the road. So so we we do try and provide access to professional services, you know, um, because it is worthwhile. You know, I say to any business person, you know, spend money on getting this right, you know. It's like, you know, uh you know, um when I got married, and maybe I shouldn't say this in public, but when I got married, okay, so my my first wife, okay, her father said, get married in community of property. Okay. I didn't know what that meant. You know, I just like the school. Okay. Boy, oh boy, did I learn what it meant when we got divorced, you know, and I lost everything. You know, um, so again, I I I use the analogy of a marriage, okay, because it is when you're in a partnership in business, it's a marriage. Yeah. So one must one must be you know very serious about it. And um and and and and and again, that is why I place so much emphasis. Because a lot of the times people will just print off an average buy and sell agreement off the internet, you know, or they'll get some a legal advisor at a at a life firm who's not going to go stand in a court of law and defending.

SPEAKER_01: 9:13

Go to an attorney, get it done properly.

SPEAKER_03: 9:14

Get it done properly. And and and structure a proper business assurance solution that can match that need.

SPEAKER_01: 9:21

Exactly, and your circumstances.

SPEAKER_03: 9:23

And that's exactly what we're about, yeah.

SPEAKER_00: 9:24

And that's the whole point of our podcast is all of those things. We talk about how you are married, what is a buy and sell, and then all of that is based on then using a provider that is thinking the same way and being able to give that to our clients.

SPEAKER_03: 9:40

Thanks very much, guys.

SPEAKER_01: 9:41

Good.

SPEAKER_00: 9:41

Awesome. Thank you so much for that.

SPEAKER_01: 9:44

Thank you for listening. If you have enjoyed this podcast, would like to subscribe, please visit our website www.growthfp.co.za. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.