NEWS April 17, 2026
Financial risk: what to avoid, what to accept, and what to insure
As every engineer knows, risk is a part of life. Richard Hopwood, Queensland State Manager of PPS Mutual, advocates understanding what financial risks should be avoided, which ones should be accepted and which can be mitigated in the form of insurance.
Engineers understand better than most people that risk is not the enemy.
In any well-run project, the goal is not to remove all uncertainty. That would be impossible, and in many cases impractical. The goal is to understand risk clearly enough to make good decisions about it: which risks are acceptable and which need to be mitigated.
The same thinking should apply to personal finance. The art lies in knowing which risks you can afford to accept, which ones you should actively mitigate, and which ones are likely to be financially disruptive that they should be transferred through insurance.
That distinction matters, particularly for professionals such as engineers. People who work in professional fields are particularly susceptible to risks of unexpected income loss.
For many engineers, their greatest asset is not a property portfolio or a business they can one day sell. It is their ability to earn a strong income through specialist knowledge and experience. That earning capacity underpins everything else: mortgage repayments, school fees, retirement savings, day-to-day lifestyle and long-term financial security. If that income is interrupted by illness, injury or disability, the consequences can be far more significant than many people realise.
“Financial risk is not just about products. It is about judgement. It is about understanding trade-offs, setting priorities and making sure limited resources are directed to the areas of greatest exposure.”
Richard Hopwood, Queensland State Manager of PPS Mutual.
Diagnosis of a major medical issue, for instance, can have an extraordinary financial impact. Research shows that, in Australia, a quarter of all cancer patients have out-of-pocket expenses exceeding $10,000 every two years, and some drugs can incur out-of-pocket costs approaching $100,000.
Data suggest that, compared to the overall population, high-earning professionals experience a greater financial impact for any given health trauma.
The right path to follow
There are four practical ways to treat risk: it can be avoided by removing exposure entirely, it can be reduced by lowering its likelihood, it can be transferred to a third party such as an insurer, or it can be accepted.
In practice, most people use a combination of these approaches. Determining the best combination, however, is not a straightforward task.
Many professionals have not been given the tools to think about financial decisions in these terms.
Instead, they may rely on assumptions that turn out to be misleading. They may assume their superannuation provides enough protection. They may believe WorkCover will cover every relevant scenario. They may have a group insurance arrangement through work without fully understanding its exclusions, benefit limits or duration.
The problem with assumptions is that they tend to remain untested until a claim needs to be made.
This is one of the reasons professional advice matters. Financial risk is not just about products. It is about judgement. It is about understanding trade-offs, setting priorities and making sure limited resources are directed to the areas of greatest exposure.
Minimising misconceptions
A qualified financial adviser can help identify which risks are reasonable to carry and which are not. They can test whether a person is relying too heavily on assumptions or default settings. They can also help with the structural questions that make a real difference: whether cover should sit inside or outside superannuation, who should own the policy, how much cover is appropriate, and how to align protection with broader financial obligations and goals.
That matters because insurance is not just about having cover in place. It is about getting the right money to the right people at the right time. It is also about making sure people are not overcommitting scarce cash flow to protect against risks they could comfortably absorb, while leaving themselves exposed to the ones they cannot.
For engineers, this way of thinking should feel familiar. It is the same logic applied in professional practice every day. You do not eliminate every risk. You do not ignore every risk. You assess, prioritise and respond in proportion to the likely consequences.
Financial risk deserves the same discipline.
And because PPS Mutual uniquely accredits its advisers beyond regulatory requirements, it ensures the advice they give is best positioned to take care of the needs of professionals.
