April 13, 2022

Delivering Cost-Effective Advice with an Entrepreneurial Mindset #1 – Transcript

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Delivering Cost-Effective Advice with an Entrepreneurial Mindset

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Fraser Jack
Thank you for joining me, Adele.

Adele Martin
Thanks for having me.

Fraser Jack
We are chatting about entrepreneurial mindset within the advice landscape. And who better to talk to then you obviously, we’ve had many, many conversations about this in the past, but I’m really looking forward to this particular one where we’re recording it for everyone to listen to. Let’s dive straight in the advice landscape. Where does it come from? And where is it going? And how do we overlay up entrepreneurial mindset?

Adele Martin
Yeah, so I clocked up 20 years and advice last year. So let me tell you, it is very different 20 years ago to what it is now. And yeah, I mean, when we first it’s blows my mind, but we didn’t have computers to log on to find manage information. Everything was on the phone. We spent Yeah, it was SOA, when called SOA, there were a couple of pages. And so yeah, it was a very different world back then. And but I think fundamentally, it was still largely about people. And so it still had that people element to it, which is very different to, you know, something like accounting, which is like numbers first. And then people sort of the afterthought. So yeah, it definitely has changed and evolved over that time. And I couldn’t have imagined how much so so yeah, I guess for me, you know, I got offered a job at a bank. When I first was at a uni. And I didn’t take it, I went down the paraplanning line, I wanted to understand it more, which you know, for a 21 year old with a lot of money and perks to turn away from but I knew I wanted to have an understanding. I just didn’t want to be doing sales. And then so yeah, went up that way. paraplanning. Yeah. Firstly, Assistant, paraplanning. Adviser, Owner, I’m known for two with business partners. And then that brings us to now.

Fraser Jack
Now I want to talk about this concept of, you know, the advice process as as, as you went down that journey, obviously, you know, we let’s lead into the fact it’s always been a compliance lead regime, you know, we need to make sure we do these things and tick the boxes, which is fair enough, because nobody wants to end up, end up on the wrong side of the legislation. But then, again, if we think about consumers, consumers, we’re consumers in many different industries, our consumers in you know, health and consumers and medical and consumers and groceries and the consumers and all these different areas, who all sort of took different paths over the last 20 years.

Adele Martin
Yeah. So I mean, for me, how I so I think we have forgotten about the consumer, I really think that we put so much friction in the advice process. So I think, imagine if we went to, you know, buy a house or buy a car, and before we’ve even done that, we want them to be ID and go find a GP and print this thing out. And like I don’t have a printer, why printing this out. And, you know, go find all this information about your superannuation. And during this five hour, a budget that’s like this long and like, we put so much friction and you know, in the advice process before they’ve even come to us a lot of the time, which, you know, if we think about other industries, there’s no way they could all those hurdles in place and make it hard. So yeah, I was talking to a solicitor the other day, and he said I would do I don’t own your, you know, financial planning businesses at all. You guys. I actually want advice. No, I just got too hard with all insurance, like, and so people want it, we just put so much friction sometimes because we haven’t thought about the customer at all. Yeah, so yeah, I think we have a lot to learn from other industries. And that’s where I’ve gone for expropriation and is to other industries. And you know, I’ve worked with, and I’ve invested very heavily in my myself and my brain, in lots of different coaching here and overseas. And a lot of that time, it’s not necessarily ideas that have come from other financial advisors, it’s come from external businesses and the practices that they were doing, and trying to incorporate that into what we’re doing. I’m certainly, obviously, you got to make sure you’re doing it legally and compliantly. No one wants to end up in jail. But there is definitely some things we can do. To make it easier for people to say yes, to work with us.

Fraser Jack
Yeah, we were talking earlier just off before we started recording about the value of financial advice. And you mentioned and you mentioned this concept around instant gratification earlier, just when you were saying, you know, consumers are outcome based, they want things now they don’t want to wait, you know, like I want to buy car, I’m gonna wait that’s gonna take you six weeks of information and backwards and forwards and making sure this is the right car for you. People want that instant gratification. And so, you know, having those small steps if you like that, I mean, obviously, we’ll we’ll get into some of the stuff that you’re doing in the next episode. But having those small steps are amazing. And lino, other industries do that very well, don’t they? Yeah,

Adele Martin
let’s I think that’s the thing. Let’s see if we can have some wins early on for them, like if we can give them that when they get that little high and dopamine rush to keep going. So I often work you know, with people in their 20s and 30s. One of the very first things we do is see if we can maximize their income. So I’ve got a script that they use that they can go back and you know, use to get a pay rise. And so that process, you know, they get paid a fire but this does sound to me. Sometimes I work with law. apply it at the moment. It’s been 13 years and she’s asked for a pay rise just because she’s never thought about it. No one’s ever put it into her head at all. She’s worried about what if they say no. So I’ve developed a whole process around that how to ask for a pay rise what to do if they say no, and we do that early on, so I couldn’t get that wind momentum. Or we another one we do is pick their biggest bill and help them negotiate it. So if I can say, you know, that that we do early on, before we get to the look at your superannuation, that’s something that’s going to have a long term that can sometimes feel not that excited about it. It’s been good, somebody’s wins early on, it gets them motivated, excited to keep going.

Fraser Jack
Yep. Now I want to I want to pick on this, just because in this particular episode, we’re looking at the bigger picture of evolution. Talk to me about other industries, you and I’ve spoken in the past about the personal trainers and health industry is a is a great model. What industries have you modeled off? I guess?

Adele Martin
Yeah, health is great, they’re great for a couple of things, they do things really well on scale. So they’ve been, they also are really good at community, people want to belong to something even more. So in today’s world where you know, people can feel disconnected online, they want to belong to something. And so you know, that whole center, your neighborhood, you know, people used to belong the neighborhood, that’s where the local coffee shops are good, because it’s, you know, that community, people want to community. And so they’ve done that really well. And they’ve also done scale, you know, very well as well. So if I think about someone like Michelle Bridges, for example, has she got people amazing results with, with her challenges and stuff that she does her? Yes, she has has, she had to physically go around and train every single person? No, she hasn’t. And so she’s been able to impact the lives of hundreds of 1000s of people without having to do it all. The other thing they do really well is they gamify stuff. So they they measure they gamify they give them you know, supplements, the challenge is a perfect example, you’ve got an end result, they’re very clear about what the outcome is. And you know, then they’ve got some measurements and some things that they do along the way. So yeah, that I think is, you know, having an we can tie that to financial planning, what are we actually helping them to do? Where are they going to get to? What are some of the milestones we can do and tick off along the way? How can we gamify it and make it fun for them? So, you know, some of the things we could be able to do is, you know, what, how much, how much percentage? Are they saving of their income? How does that compare to the average Australian? If we want to measure financial independence, where they want to, you know, choose how much they work? What’s that number to them? How are they tracking along that maybe you have a big rocket and every meeting, we’re updating the net worth, let’s like, make it exciting, you know, a stretch something we’re going towards. So yeah, there’s lots of things that we can do to to gamify community. I’m a massive fan of community. I’ve got a free Facebook group, I’ve got paid groups. You know, I’m a fan of, you know, community. Also, yeah, a fan of doing stuff on scale. So I found as an advisor, I was having the same conversations all the time. And I don’t know of any other advisors out here. But by the time he stayed on the fourth time, that week explaining risk profile for the fourth time, you’re not doing as good as what you did at the start of the week. You know, especially with me, I’ve got two children under two, I’m sleep deprived by that the end of the week. So I thought there’s got to be a better way. So what I did was, I’ve read, you know, I recorded my best version of it. And then I use that. So now before the risk profiling meeting, the clients are watching this video, before we talk about, you know, their goals, they’re doing a goals exercise. So there’s a way to make that onboarding experience really amazing for the client. And then they you know, it’s not tied to the SOA, they’re getting stuff straight away. They feel educated, understood. So yeah, that whole, and I haven’t had to have the conversation, you know, 50 times with them about budgeting or 50 times with them about setting goals. It’s done. Once it’s done really well. It tells me I become a Netflix for the next six weeks, they, they do that. And then it’s that meetings are so much easier. Because that bulk education, a lot of the stuff that’s just you do over and over that’s repetitive is done by the client, and then you can spend more time on coaching with them on all the other stuff that adds value. So yeah, there’s definitely lots of stuff we can learn from the fitness space in particular, that we can bring in.

Fraser Jack
Yeah, jeez, I love talking to you. You know, sometimes, sometimes when I’m talking about the this sort of stuff, we’re talking about the evolution in the future, but you’re talking about the past, because you’ve already done it. I love it. One of the things I wanted to dive in there, and that gamification space is, you’re absolutely right. Belonging is a really important standing for something, you know, having a just cause or something moral about what we’re doing and why we’re doing it. You know, the gamification I love the levels concept I, I learned to gamify my age the other day, so I’m now turning increasing a level every year, not just aging. And you know, like you’re right in the financial process, if you’ve got 30 things to do then make it 30 levels and that allow people to grow as they as they get there, rather than becoming a checklist coming along and address.

Adele Martin
Yeah, something that I’ve started to work on is in because I sometimes get advisors say, oh, Millennials don’t want to work with you long term. Well, that’s just because you haven’t laid out the pathway, you haven’t said what it is what they’re trying to tick off. And so what I’ve done is I’ve sort of introduced this concept of like, okay, high school, these are things that you need to tick off. One is having an emergency fund one is creating a spending plan. One is being clear on your goals, one is doing your will. So I’ve got like this really clear High School, then once you graduate high school, we go on to university, a diploma, these are the things you need to start to do. And that is pay off your personal debt, increase your super contributions, these are all the things you need to do in that, you know, high up space. And then we do your masters in financial planning, under your masters in financial planning, these are the things that we need to do, we need to start thinking about your legacy, what you know, financial independence, we need to start thinking about building wealth outside of superannuation Max self managed super fund maxing out super contributions. And so I’ve developed this really clear pathway that clients come in, they see the big picture, they know what you’re working towards, they tick it off. And so that’s been really a game changer, because they know it’s not a set and forget thing. They know what the next step is. They’re engaged, they want to tick or more off. So yeah, I think that’s the other thing that’s important is having knowing that pathway. Um, the other thing, I’m really big one, which I see other places industries doing is celebrating client wins. So I’ve become bigger and bigger at capturing client wins. So one of the things I start every meeting off with is, I want to know what’s the big win you’ve had big or small, or when you’ve had big or small since we last met. It doesn’t have to be money related, but it can be what’s the when you’ve had explained to them the reason why we do that. Sometimes we can feel a bit demotivated. This gives us momentum to keep us motivated. So it’s really important, we do this at the start of every meeting. And then I go, Okay, let’s reflect on some of the other windy pads in three steps first started working together. And then I’ve got all the other wins that they’ve ticked off. So I’m reminding them of the value that we give every single time we meet, I’m getting them excited and motivated. So I had this happen the other day where the lady goes, I can’t think of anything. Oh, if you didn’t think if you could think of something, what would it be? Oh, I’ve just paid off my debt, this personal debt she’s had for ages. Amazing. So you’ve got an extra $3,000 a month now spare? She’s like, Oh, so like an extra 30 something grand a year. Now you’ve got to put somewhere else. That’s incredible. You’re gonna say this much interest? What are you gonna do with this task for now? Yeah, so yeah, I think that celebrating the wins has been really big as well. And celebrating those milestones. So yeah, that’s definitely something that I’ve, you know, borrowed from other industries and have instilled into the business is celebrating those wins. Now that has two things, what then happens from that is, they then, you know, become your biggest advocates, because they like, so excited and pumped, then also a good opportunity for you to say, Listen, I love helping people smash their goals, like just like you, I would love to have all my clients just like you. It’s a very natural conversation to say, you know, is there anyone else you know, that I could help? Or would you mind spending 30 seconds and doing this Google review, because I love I’m growing my business, I want to help other people just like you. It’s very natural fit to then ask for referrals to ask for that good review, when you’ve been celebrating those weeks.

Fraser Jack
Yep. And celebrating your wins means that they can you can celebrate the win with them. And then you can encourage them to celebrate their win with their friends and family and talk at start with the win and then obviously work their way back to to you helping them but just before we, before we jump off this particular episode, I just wanted to talk about one 2 million zero to many, that’s something that you’ve really embraced over the years.

Adele Martin
Yes, I’m a big fan of that. Because it gives me the capacity to help more people. So I know there’s only so much that I can do as one person. So it lets me help more people. And yeah, so I start so it starts, it can be with your. So I started I’ve got a program called my money buddy, a self paced program that people go through. So that is done at a very much a scaled level. I’m very, you know, hands off with that. So and but then there’s also other ways that we can incorporate scale. So as an example, you know, every quarter or every month, I’m big fan of doing it monthly. Why don’t you do a workshop or a training, which is just a webinar, but don’t call it a webinar to your clients. Nobody wants to go to another webinar, call it a workshop or training for your client. So you could be the person that drag someone else in it’s an expert. So you know, at tax time I bring in the accountant to talk about how to prepare for your first tax return. If you’ve got an investment property for the first time, what do you need to have? You know, we have someone come in to talk about the federal budget, we have someone come and talk about state planning for helping your elderly parents, you know, my clients are going through that journey where they have older parents and they’re starting to ask questions about that. Let’s bring someone you know experts in on that. So I think that can all be done immense value without you having to do it all individually. So yeah, I think that is another way we can add amazing value between review meetings for clients. So we can be the expert and talk on something or we can bring another expert. And that can be something that we do every month. Now, this could also be something that then gets stored inside a members area that they can watch back when convenient. So when someone comes on board, they’ve got all this training, all these these coaching calls, all of a sudden, it’s making your advice business, you know, much more valuable because it’s something tangible that they can see they can get access to straightaway. So it can’t be just something that you record, it can be something that you actually, you know, people log into, and it feels valuable to them. They can watch them all. Yeah, absolutely.

Fraser Jack
It’s certainly its number one rule of scale, making sure you can record and send it out and allow people to, you know, many people to watch the same thing. Adele, thank you so much for being part of this very first episode, we look forward to jumping in catching you in episode two, where we go for a deep dive into all the really amazing stuff that you’ve been doing. You both welcome. Thank you for joining me, Vince.

Vince Scully
You know, Fraser, it’s great to be here.

Fraser Jack
It’s fantastic to have you on you’ve obviously no, no stranger to the X Y podcast. So thank you for joining us again. But when it comes to entrepreneurs, and mindsets around, you know, the the landscape and financial advice, you’re certainly one of the people that comes to my mind, or

Vince Scully
may or may not quite fit the XY demographic, right. Certainly an advisor. Yeah,

Fraser Jack
exactly. Right. So So you’ve, you know, you’ve, you’ve been in advice a long time, and you’ve seen the traditional model and being part of the traditional model. And, and then decided to think about things from a completely different mindset. And before you launch your existing business, which we’ll get to a lot of the detail of it when we get to that episode, episode three on in this series. But before we get to that, let’s I wanted to chat to you about the landscape itself, and how, how far it’s coming, or I guess even how far it hasn’t come. So Vince, tell us your thoughts on the the evolution or the evolving landscape of the advice. And I guess we’ll start in the past of where it’s come from.

Vince Scully
So I think the history of advisors, we’ve gone through three, three phases, we had advice, one 1.0, which was really product sales, where your typical advisor, and I’m sort of going back to the 70s, you were your typical advisors was largely a insurance or fund salesman, dressed up as advice. And that matured very quickly in the 80s into our call advice 2.0, which was product sales dressed up as strategy. And now I think advice 3.0 is finally become a client centric practice where everybody acknowledges that it all starts with goals. And we need to be delivering a solution that meets those goals stated or unstated. And we’ve seen huge changes over the last over the last decade or so since fsra, Kenny, and, you know, as older advisors transition out of the industry, we’re seeing a complete change. And the withdrawal of the big banks in the last year or two, I think is accelerating. But I don’t think this transition will be complete until we get rid of vertical integration completely. We can’t possibly so don’t force that product from the advice because almost all advice involves some product, some, even if it’s the simple, pay off your home loan or buy your wife flowers, which are probably the best advice with most clients, it still involves a Hummer and telling someone that they should get the best rate doesn’t really help unless we can actually help them do this sending them off to cancer. So get a better rate is not really advice.

Fraser Jack
Yeah, I must feel like just inside of that product advice pieces, almost, you know, providing information or conversation around a product and then encouraging someone to implement a product probably two slightly different things if you’re in the advice landscape, but they’re not they’re not separated within any of the acts.

Vince Scully
Yeah, but I’m not sure that you can actually in practice, deliver a holistic advice piece of advice to a client without also sold in the last bit. It’s a bit like going to your doctor and your doctor again. Well, Fraser, you’ve got cancer needs to take some medication and go down the road to your pharmacist and negotiate which one and how much to take. Sure you don’t want your doctor taking commissions from the drug company. But to divorce the prescription from the diagnosis, I think does the consumer deserves.

Fraser Jack
Yep, yep. Now. Now one of the things I wanted to sort of tackle in this area is how other industries or professions, you know, work and trade and have customers and clients and those sorts of things and how financial advice or things that financial advice can learn from those other industries. Do you ever sort of look at other professions or Are industries and say, well, if they can do it, why can’t we?

Vince Scully
I’m not sure. The vast bulk is actually all that difference, as you may or may not know, I’m actually qualified as an engineer at university. And if you look at your typical engineer who you commissioned to design or build, he’s obviously going to work out how much concrete you need, and how much reinforcing you need to put in the pillars. And then you’re going to commission a builder to build it to his specification, sometimes he’ll supervise the job, sometimes your architect will, but he’ll be there to certify that the right amount of steel is in the pillar, and to get your occupation certificate from counsel. So as financial advisors, well, what are we doing that’s different, we can say, Look, you need some, some life insurance, here’s how much you need. And here’s who you should buy from, because that’s the one that’s most suited to your needs. Mature that does two things are materially different. And to leave a consumer to their own devices, having told them they need half a million dollars of life cover to then go to cancer and choose that choose the cheapest one, we’re actually leaving them in a worse position. We said, look, the answer is you need to have them in each of these features. Here’s the most effective way of buying that oh, by the way should you just pay for, and here’s the tax implications. I think once you remove the prescription from the diagnosis, you failed to deliver the advice the consumer needs, but we can fix structurally there’s a whole bunch of things that can be changed. And vertical integration is one of the people’s problems. If you go to a an advisor, this leads to an insurance company, it shouldn’t surprise you that more of the advisable favorite issue, beat notwithstanding, it’s getting getting a lot better than it was.

Fraser Jack
I’ve always, I’ve always thought the same thing. I’ve sort of thought to myself, though, if you if you go into a Toyota dealership and you want to buy a new car, they’re going to tell you a Toyota and and that’s fine, as long as you’re not expecting them to say what’s the best type of car for you. It could be a Mazda could be Mitsubishi, it could be a Toyota, and then come up with the fact that a Toyota, you know, just,

Vince Scully
but I think the one thing you do expect them to do is to tell you what Fraser have sort of what you should expect them to do. And that’s where the dealership analogy falls down is you should expect them to say well look for as a you only drive 4000 kilometers a year, therefore you should never go get membership. So assessing whether you need that product at all is part of the advice process. And whilst a consumer would maybe have a reasonable expectation that you go to an a&p advisor, you might be more likely to get a&p, it’s less clear that they’re going to get the advice that maybe you don’t need insurance at all.

Fraser Jack
Yeah, that’s right. And I actually think it’s, um, it as a profession, it’s a bit more like saying a doctor that works for Pfizer, or one of the big medical company, you know, companies that is employed by them and, you know, gives you advice on what you should be taking would pretty much end up with a product out of the back of it. So it sort of makes sense from a professional point of view. And but but you know, from a sales point of view, if you’re talking about you know, products that people wanted to purchase, then it probably makes more sense to just say all the labels on the top you walk into a Commonwealth Bank you’re gonna get in you’re asked for a home loan, you’re getting a Commonwealth Bank home loan that’s that’s a product on the on the top of the other label, you make that decision before you walk

Vince Scully
in. When you when you change the dynamic from our homeland. I’m walking into a homeland chapatis CPA on the on the door, that’s a pretty clear analogy, that they’re consuming, very aware that they’re only going to get CPA close. Yeah, it’s a little less clear when they walk into an Aussie Home Loan broker. Which still 45% CPA. Yeah,

Fraser Jack
that’s right. And that’s, and that’s the vertical integration piece. You’re talking about? Weapons. So

Vince Scully
just before we before we leave that comparison with other professions, if you go to a lawyer, you’re almost always going to be told that you need legal advice. So I don’t think the fact that I’m selling hammers, most problems look like nails. And almost everybody, as a human will naturally go, Well, Mike, you need my solution. That’s another problem. Vertical integration. So if you’re gonna see a an advisor with your superfans, all they can tell you is super. So the answer to wealth accumulation is always going to be put more into server and by corollary, put more into MySQL. So, you know, I don’t think that’s a peculiar thing limited to financial advice. Yeah, it’s a problem with anyone who’s selling a single solution.

Fraser Jack
Yeah, exactly. Now, before we before we move on to the individual episodes, I just wanted to talk about Some of the headwinds that advisors are facing at the moment, there’s obviously been a lot going on with with exams and mental health and issues around additional and changes and more and more legislation stacked on. But then some people, I think the advisors with entrepreneurial mindsets have sort of not worry too much about then just got on with what they needed to do. What are your thoughts on?

Vince Scully
I mean, my, my thought is that all change is good change, and those who embrace it profit from it, as he resisted that, that’s just a fact of life in any profession. So what what’s really changed? Well, I think a lot of fundamental changes. For your requirements have passed the exam. Well, the exam was really a demonstration that you understand the regulatory environment, you know, when you should give, if it’s G. So, I really struggle with the resistance. And I must admit, I’m sort of coming off on the wrong end of that by 2026, when the educational policy, despite having four degrees, and a whole bunch of other qualifications, including the Chartered Accountants, and doing this with your departure is, I’m actually not going to meet the education requirements without doing three more modules. So you would think, therefore, that I had an incentive to whinge about these things, because that does seem sort of unfair. And that’s one of the criticisms later, later the door of the changes. But I think it is a good thing that it demonstrates the public that everyone is qualified. And one of the things I’ve always read about is people who fail the first exam, or the first attempt, because many people took a number of goes at it. And so as a licensee, I have a, an authorized rep that failed the exam. The day before they sat the exam, I could take a reasonable assumption that they knew what they were doing, that they after they felt the exam, I now have a piece of paper that says, actually you’re not competent, according to the law. So can I continue to let you give advice, or what other additional precautions do I need to take? Now that may sound a bit harsh, and I’m not sure that many zealot groups to that view. But yeah, I would want to be defending that record. So that’s just one example. But there have been a lot of changes, the FDS is another one that keeps coming in for criticism. But actually, guys, this is an opportunity to say to your clients once a year, here’s what we gave you. And here’s what you pay for it. Isn’t that a wonderful deal. And if you don’t have the confidence in your offering, that you’re scared of telling your client what they paid and what they got for them, then maybe you need to relook at your product offering service that we very much see VFDs as a as a marketing opportunity. It’s an opportunity to reinforce with our members once a year, what they paid for, and how much better off they are. So I think we should be embracing this as an opportunity to demonstrate what we’re doing. I mean, historically, we may have sort of done this in the annual review. But to make the juxtaposition of service and cost very clear, in a document once a year, where you’re saying to your client that, yeah, this is not your corner gym, we’re not going to renew your membership without hitting the wall says, We’re not going to build their business on inertia wrenches, we want you to be happy. We want to be demonstrating that what we’re doing is value for money. I don’t see how anyone could object to that. Unless you’ve got something to hide.

Fraser Jack
That’s certainly right leaning into it. I love the fact that you embrace change as an opportunity. And that’s exactly what entrepreneurs do. Vince, I just want to thank you for being part of this first episode. But I really look forward to going to a deep dive into your business as we get into the third episode. Thank you for having me. Thank you for joining me, Nicola, this week.

Nicola Beswick
You’re welcome. Pleasure to be here.

Fraser Jack
Now we are talking about the evolution of the advice landscape and specifically with an entrepreneurial mindset. So I thought we would start this particular episode of the conversation with you around that and just your thoughts on on the traditional advice landscape and how we’re able to come at it from an entrepreneurial mindset.

Nicola Beswick
I think one of the big things is knowing that we have to completely adapt to ever changing things that we say I think COVID is very much showing what we have to do. And particularly when we look at the advice business, we know that things are changing or have changed and we need to adapt from what was maybe the more traditional generating fund is under management to more of a, looking at the different ways that we can service our clients and key aspects that may be part of what they’re looking for. So integrating key areas such as aged care, and building wealth for the future generations, those kind of key areas are good for new businesses to particularly adapt to and understand.

Fraser Jack
Yeah, it’s fair to say that, you know, a lot of the entrepreneurial mindset I’m thinking of when I think of it that is thinking about things outside the box, or other industries, doing all those sorts of things, because at the end of the day, oh, and also scale, which we’ll get to in a second, but thinking about things from outside the box, you know, that we do see other industries, doing things that we can learn from, what are your thoughts on how other, you know, how advisors can learn from other industries.

Nicola Beswick
I think that’s a really, I’m laughing a little bit because with my legal background, and seeing the way that the legal profession has, has changed, maybe and is actually a profession, that’s one of the key things that I know is a hot topic in the advice space. And that is something that we’re all striving for in some shape, or form. So looking at how lawyers and accountants became a profession, and us as financial planners adapting to that is probably a really good comparison. And also looking at the legal space where lawyers did very much specialize in key focuses. So you’ve got your family, family law, intellectual property law, which is where I came from your normal law, from a property perspective and commercial aspects. So it’s probably a good comparison. There.

Fraser Jack
It is. And obviously, those sort of things, as you mentioned, they are a profession and there, whether it’s the medical or the legal profession, there’s they’re very much a lot of specialists around, they’re doing those specific things. And they refer out everybody’s referring other people off to specialists.

Nicola Beswick
Yes, they are, and is building that really big, trusted network of key advisors, not in the sense of financial advisors, but advisors and a broad spectrum of of areas, I think is something that we’re going to have to develop more and more and more, and there’s this love hate relationship that maybe financial planners and accountants have, that’s probably a key one there to, to mention with that, that aspect. Yeah.

Fraser Jack
Because there’s, there’s probably pros and cons, on both sides of that conversation, too. There’s obviously, you know, a traditional profession might have some great learnings, but then, you know, we have to sort of sit back and go, do we actually want to follow those provisions down the line of doing it that way, because that might add, I’m just imagining, you know, if there was a specialist that was super, and a specialist for investment, and a specialist for, you know, for risk, then it could end up adding a whole lot of additional cost for consumers to be able to come in, and then, you know, we’re gonna start again, with a needs analysis and start again, with the process. And, you know, there’s a whole lot of licensing and upfront costs that that need to come with, you know, having a, you know, a specialist. generalists sort of set up, what are your thoughts on whether we should follow down the the lines of the existing professions or whether we think that think about something completely different,

Nicola Beswick
it’s good point you raise there, I think we, as financial planners need to know a lot about key areas, and be able to recognize certain aspects of a client’s situation. But like a DP, where you have a really big broad knowledge of a whole range of different areas. And if we take the GP example, they know a lot about everything from a finance, a medical perspective, some of them might know a lot more about financial planning than we thought, I think. So giving that as a comparison, and then having a real key areas that specialize in that a bit like GPs who refer out to that may be what we see. But it’s, it’s this real chicken and egg perspective, when we particularly look at cost perspective, and when we’re building a business and we’re in a business and we want to make sure that we’re still servicing our clients but yet remaining profitable as well. But it is that real kind of key area of how do you make sure that you’re doing the best for for your clients, but also getting that that cost piece and equation as well. So that’s a never ending kind of conversation, isn’t it?

Fraser Jack
It’s simply one that I think the industry is grappling with at the moment. And I mentioned scale because I think it’s a it’s a good part here. It’s about saying, you know, how do we provide clients with a value at a at a price point that’s, that’s relevant to them? I think I think, you know, one of the points you mentioned there that businesses do have to still, you know, understand what they’re in business for, which is, you know, helping their clients. And that could be through investing or, or, you know, looking at all different bits of pieces, whether it’s goals based, or whether you, you know, you how you’re coming out this, whether you want to be an investment focused analyst style of planner, or whether you wanted to be gold base, or whether you want to outsource certain areas, I think it’s really important to firstly understand where that sits, and what your business is going to look like. But, yeah, I think we do sort of still have to understand that there are parts of business that still have to remain, as, you know, revenue or income for the business and to become profitable. How do we get then, you know, from the traditional areas of, you know, people coming up to retirement or retirement retirees to, you know, now looking at it as a population going, how do we service the entire population of young families and all those sorts of things,

Nicola Beswick
I think, making advice accessible and for, for people to understand a lot more about what financial planners do and how they can help and particular life stages, were so driven to work with the, I guess, the older cohort of people, but they there is so many other people out there that are in so many other different situations that we just don’t necessarily maybe think of, or in that traditional sense. We don’t think necessarily about making sure that people that are in their 20s 30s and 40s are actually setting themselves up right, to be able to then live, essentially that life that they want to live when they get to retirement. And I think we’re we’re starting to do that really well, in the broad sense in the industry, where there’s so many businesses that really specialize in that areas, but it’s about that awareness and building that awareness within I guess, the general public and and the community to be able to say, hey, it isn’t just for the wealthy, it isn’t just for the the retirees or the people entering into retirement. It’s about everyone and, and building that set that up for people to really exit access at the required points in time.

Fraser Jack
Yeah, I look forward to I certainly look forward to being a part of that movement, trying to get the messaging out there to consumers. And in particular, we’re going to actually dive into when we speak to you in episode four of the series we have, we’re going to find out a little bit more about your business and how you’re bringing an entrepreneurial mindset towards your business. And it’s very, it’s very easy for us to talk about small business individual business and say, it’s set yourself a goal to be a specialist in this specific area. But But what we’ll hear about when we get into your episode is a little bit more around how you’re able to do that inside an existing traditional practice. It sounds great, fantastic. Thank you for being part of this series. And obviously this first episode, and we’ll look forward to catching you in in Episode Four when we go into a deep dive into all of the things that you’re doing in your business. Welcome to the conversation, Greg.

Greg Newman
Thanks, Fraser. How are you?

Fraser Jack
Very well. Thank you. Thank you for joining us today. Now joining give the listeners a very quick overview of you and your position at the moment.

Greg Newman
I certainly I’m the head of retail distribution for hub 24 in Australia, I have the pleasure of looking after most of the BDM interactions with financial Australia advisors across Australia. So it’s great job.

Fraser Jack
Wonderful, fantastic. And you’re doing that all the way from the beautiful state of Western Australia.

Greg Newman
Yeah, absolutely. I’ve been fortunate enough to live in Western Australia for about 20 years and prior to COVID was commuting pretty well every second week to the east coast. But But I have to say it’s I’ve got itchy itchy feet to get on the road again, a bit

Fraser Jack
of a pity can’t wait to get back across and catch up with people. Now let’s get into this. We’re talking about the entrepreneur mindset. We’re talking about the current landscape around advice and the somewhat traditional advice process and working out ways and ideas and concepts around attacking this from an entrepreneurial mindset and being able to think about different ways to maybe scale financial advice.

Greg Newman
What are your thoughts? Our our thoughts on this is that there’s never been a greater time than now for entrepreneurs and innovators to take center stage. The landscape that exists at the moment, which we’ll we’ll cover in a moment, is creating lots of opportunities and lots of challenges. Probably Unfortunately, few people are seeing it as too many challenges and not enough opportunities. So we think the entrepreneurs are definitely seeing the world differently. And they’re really seeing opportunities that others are missing. And we see that very much as the DNA of the planet. Seeing the opposite areas that others haven’t seen. And it’s historically been through regulation or, or how to interpret opportunities for portfolios. This group of people are really quite courageous that we’re seeing. And with that, it’s not really a reckless approach to taking the opportunity to the taking really calculated risks, to push their organizations forward. So they’re seeing this turmoil of this great, great opportunities to be different. Yet, it

Fraser Jack
is a really interesting point you raised there, because often, often around that recklessness or creative opportunities, it can often be seen as you know, we’re compliance driven, and we need to make sure that we’ve got all our ducks in a row, etc, etc. And so we just don’t step outside the lines or we get we get a little rap across the knuckles are absolutely.

Greg Newman
And I think what they’re saying is they’re, they’re saying the same landscape as everybody else. But they’re not being limited by conventional thinking about it. So really thinking it’s not that they’re special, it’s just that their mindset is very different.

Fraser Jack
Yeah, I couldn’t agree more. It’s definitely it’s definitely a mindset shift. And of course, you’ve managed to look at and think about some studies and surveys and stats and, and figures around this. And, you know, you speak to a lot of planners around the country, and you and your BDM network, speak to a lot of advisors, obviously, you have these conversations all the times internally, what are you seeing in regards to, you know, some of the stats around,

Greg Newman
like some of the statistics, many people would know, but it’s worth highlighting, because they are moving quite regularly. And the things that we’ve seen, you know, really, since 2020, onwards with the big exits of of larger financial services organizations, in particular, the banks, has displaced a lot of advisors. But pleasingly, I think many would say they found a better home than where they were before. So that changes is pretty much complete. From what we’ve seen, and the Australian consumer is very much occupied by the psyche of, of money management. And we know that from changes through through the last couple of years, the great thing that we’re all seeing is the demand for advice is still there. But you’ve got this, this this counter force running, which is that the number of advisors in in the industry is steadily decreasing, to really where we’ve seen in in 2021, though, is around about 17,000 advisors, and in 2022, will be down to around about 15,000, probably a little bit less than that. So huge demand, and then a diminishing supply of advisors. And those advisors, of course, are being very much faced with with less time if they don’t get it right. And there’s a real caveat there with not getting it right,

Fraser Jack
you’re talking about the perfect storm. The you know, I think what happened with consumers in my in my opinion of this is that post Royal Commission, there was sort of a people didn’t want to or there was a lack of that supply, people weren’t coming into financial advice, then then, of course, Mark has dipped, and we went through COVID. And all these sorts of things happened. And the pendulum swung back the other way of all these people that didn’t get advice in that period have now all sort of, you know, merged, emerged as potential clients or financial advisors. And like you said, it’s been, you know, with with less advisors around, it’s certainly banks and opportunity for those that are still there.

Greg Newman
It doesn’t, and that’s very here, and now in the last couple of years approach, but we’re seeing a huge, huge change in the redistribution of wealth, which is, which is intergenerational wealth transfer that so many people are talking about, and the scale of that of some $3.5 trillion, passing from one generation to two millennials, over the next, you know, dozen or so years is just monumental. And I think from an advisor perspective, the profile of that future client is different. They’re not baby boomers, they’re millennials and their, their, their different beasts to who they’ve dealt with before.

Fraser Jack
You know, obviously, we’ve spoken to some advisors that are tackling or taking on that proposition. What are you seeing out in the, you know, when you’re speaking to advisors and planners about that exact topic about them positioning their businesses for that?

Greg Newman
Yes. Well, it’s interesting, a lot of the advisors that we deal with, kind of used to dealing with 58 year old couples, I guess, I’m trying to be quite general and who they who they are the people that they’re dealing with, I think advisors generally are struggling a little bit with who are these people they’ve heard good and bad. And we try and describe it to them. They This is a generation of the digital native, they are wired, they’ve come into this world, knowing, you know, technology inside and out. They have Facebook, Twitter accounts, they they’re, they’re the people that shows me I’m struggling to give examples of being a wired individual, as a 52 year old I wish to talk to my kids. But this is a wide generation. And as a part of that, there’s very much this sense of, it’s not who they trust, it’s what they trust, where do they where they get validation from. And that’s a bit of a hard concept for, for all of this because it used to be very much the individual relationship. There’s, there’s so much research done about advisors, and what’s said online, where you’re rated on Google, where you’re right around advisor ratings and the light, so they validate differently about who they’re going to deal with.

Fraser Jack
It’s interesting, isn’t it when you think about that validation or trust aspect to when consumers walk into, you know, and choosing within their own minds, choosing who and how they’re going to deal with this, and with the people. And I guess, you know, in the past, it used to be there was a bank, it was a branch, it was trusted, you walked in you spoke to them. That’s very much not the case anymore. People have different relationships with their banks. And they have, they have different relationships with the the devices and the programs and the companies that they trust online.

Greg Newman
Oh, absolutely in and the millennials coming through. And just to kind of cover them, it’s such a broad band, millennials can be someone that’s 26, or 41, or sorry, in all parts in between. So a conversation with a 40 year old 41 year old versus a 26 year old is a very different experience. But the some of the attributes around this, this group of people that that this is a bit broad brush, but there’s someone nurtured and pampered through through their experiences, but they’re really confident, ambitious, and achievement oriented. So the the, the opportunities there to, to find rapport with this group of people is something that we spend a bit of a bit of time talking to our clients about, and they really value experiences. So even though they may research initially, online, the human experience is one part of the total experience.

Fraser Jack
Yep, couldn’t agree more. And we were talking about probably those clients, but a lot of clients in that middle, middle Australia area like to call it advice, affordability can be a massive issue for them, or the perception of advice, affordability, I should say, because often they’re you know, the the actual advice is is beneficial at the current price, but they just don’t realize the value of that advice. Oh, absolutely.

Greg Newman
And I think the the thing that they have fairly lofty expectations as well. And that is that being such a connected group, they, in many cases find it amazing that that it’s so hard to find a consolidated picture of them, which is their bank accounts, their credit cards, the investments they make, they probably have an online share broking account, they probably have had their first managed fund purchase, and then to come in and their insurances and like, and I think that the needs of these people very much is consolidating a single view of them, many are amazed that the industry has struggled so hard to get a single view of a client’s wealth. Up 24 I think, yeah, we’re very much at the leading edge of achieving that. But there needs a very much show me my real position. And they’re on a journey, they may not need a holistic plan, they will actually require iterative advice, moments. And what we’re seeing is advisors recognizing you’ll need a model to support opting in various advice, journeys.

Fraser Jack
Yeah, one of the things that we’ve sort of discussed and had in mind for a long period of time is it just that individual, doing one thing provides clarity around that one little thing, but doesn’t necessarily provide that clarity across a broad spectrum of different something over here, and something going on over there, and all those other things, which is why financial advisors have always done so well as bringing all that together. Greg, I’m gonna probably leave it there for this particular episode, because we want to catch up with you in episode five of this five part series I really want to start looking at you know, obviously, we’ve talked about what the current landscape is here, but I want to start diving into what some of the opportunities are, and challenges for that matter, within the advice practices that you’re seeing, so thank you so much for being part of this first episode.

Greg Newman
Thanks, Fraser.

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