November 16, 2021

#268 Andrew Reynolds – Transcript

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Clayton Daniel
G’day, Clayton here from XY Adviser. It’s been a little while since I’ve done a podcast. But I got to chat with Andrew at the X Y event in Sydney the other day, and I thought it was super interesting. So I’ve dragged myself out of retirement. And I want to welcome you, mate here today. Thanks for joining us.

Andrew Reynolds
Thanks very much, Clayton. Thanks for having me.

Clayton Daniel
Absolutely. I found the latest events with XY was super interesting because COVID Obviously, split essentially split the event, the singular event into two events. So it was we did education digitally, but we kept the the boozing element until it was actual, you know, so that we can do it in person. And I met some super interesting advisors, there was an advisor there, who’s a pilot, an actual commercial pilots still a commercial pilot. Yeah. Right. And has his own financial planning business. And all of these clients, commercial pilots.

Andrew Reynolds
Oh, wow. There you go. What a niche.

Clayton Daniel
Let’s make it your ad. And I said, Well, what? what’s your what’s your client acquisition strategy? You guys, very simple. I get rusted on to float sit next to someone for 12 hours. And by the time we land there, my client

Andrew Reynolds
that’s awesome. You’re trapped.

Clayton Daniel
Yeah, yes. Hilarious. And then and then we got chatting about your you had a really interesting niche as well. And as a general rule, I think financial planning is just walking into the space of the hyper niche. Would you tend to agree to that?

Andrew Reynolds
I yeah, definitely think so. The nice just allows you to stand out and be an expert and know how to approach your client base and what to say to them. And I think more and more that’s just become so important to have, have their hyper niche that you know, back to front.

Clayton Daniel
Yeah. Ben Ben buddy mine. And on the on the board here at x y. I’ve been Nash he’s gotten really involved in the in like the tech scene, you know, like Google and Microsoft, and all those cats over there. And, and so employee share scheme. He just knows everything about employees, yes, nice softballs and all that sort of stuff. And he’s just hyper niched into that. Then you’ve got your airline pilots that are hyper Nishi into airline pilots and and then you hyper niching, not just in, because previously, you were niched, but now you’ve even gone in a further step. And you’ve got this awesome kind of story of being involved in a high quality licensee, and then deciding to go self license and go even further high finished. And is the story I just think has so many elements to it. So do you want to maybe give us a little bit of a background on how you got into advice? And even if your background? Is that why you even started at your first niche? Or, or how did you even nation the first place before you even got to where you are now?

Andrew Reynolds
Yeah. Oh, oh, thanks, Clayton. Yeah, so I’ve been in financial services. I sort of fell into it. 20 years ago, my dad was a financial advisor, but I didn’t hurry to follow in his footsteps. And then I think, I mean, what happened? My dad had a stroke when he was 59. And so I was probably I think I was 23 at the time, and I was working for Zurich in advisors support type role. And that was a massive shift. Like, my dad managed the whole family finances. And my mom just had her whole life turned upside down because he was heavily brain damaged. And so he was sort of no longer there to support mom and the family and everything. And then six months later, I was working for a small advice, business practice. And I just saw the way it was my dad’s old business partner, and helping my mom and it didn’t work very well. Like I think he just put so much pressure on her and said the learning curve is super steep. And I just saw how the finances just added massive stress to my mom already during a really tough time for her so but that’s how I sort of found myself in financial advice. And I was I was an associate working for a small as a risk practice at the time. And then I wasn’t there too long and I moved to AIPAC, which was booked with Rose company A lot of people might know. And, and they had a specialist, like a personal injury type offer. They had a national legal relationship manager who had relationships with law firms around the country. And it was people having serious illnesses or injuries or accidents and getting settlements and things like that. So I aligned myself with that part of the business that I attacked very quickly. And that was the area we’re in. And so I was at AIPAC for a long time was a great company to work for, as anyone would know, if you were there. It’s changed and change is going on right now. AXA, purchased them. And then I MP took over AXA. And now it’s sort of being fully integrated into a&p. So there’s a lot of changes along the way. And look, I loved it there. We had great advisors and a great nation personal injury. But there was this, most of what we were doing was large, catastrophic, court appointed lump sums. And we did a little bit of this work in Super and insurance. So most Australians have definite TPD insurance and maybe income protection through their super funds. And there’s, we estimate about 20,000, people are getting a TPD claim through super every year. And and these people just don’t know where to go TPD claim gets approved gets paid into your super account, and, and then you’ve got all these choices. There’s all these different financial implications as a different tax rate for everybody. There’s so many pitfalls people can fall into, and so many opportunities and unique financial strategies that people can take advantage of. So I thinking more about that. And that’s when I left. I actually went from AIPAC to perpetual for a little while because I have a big Personal Injury presence. And then very quickly, I decided I want to do my own business and, and set up my own business license through Fitzpatricks, like you mentioned, and they were great. I had a lot of extra viruses moved to Fitzpatrick that I used to work with, and I knew some of the managers and great business. But yeah, I just found as Fitzpatrick’s got bigger, a fantastic place. But my niece was just so different to what everybody else was doing. And I kept wanting to do things and create this website and build this tax calculator tool and do all these things and Fitzpatrick’s were not sure about a lot of that are taking months to get back to me to approve things. And I wanted to do things a little bit of a different way. And that’s when I found x y advisor, actually, so this was probably early last year. And XY buyers, it was fantastic. Because pretty much every advisor I knew was employed or working with a big licensee. And I didn’t know too many self employed advisors and I think the licensees sort of scare you off that a little bit and especially in the current climate and how you’re gonna get insurance and don’t go self license, whatever you do. But But I remember X Y Yeah, so good. I reached out to some people, they said do it, right, look back, and they put me in touch with other people and compliance consultants. I remember coming away from my first x y function last year and just dictating pizza notes from Yeah, it was like Christmas party last year. And I’d already gone to set up my license and we sat around a table and like four out of seven of us had already just set up our license through the same person. It was it was crazy. Wow. But so that’s what happened in November last year, went self licensed, as you said, and and now the business is pretty much focused on TPD claims through Sue, but we still do a bit of the more general Personal Injury stuff, but it’s it’s very narrow, because you can just say people are googling it all the time. You know, how does the tax work? What are the Centrelink implications on TPD claims through super.

There’s a huge amount of misinformation there, they’ve gone and spoken to their local accountant advisor ATO and they’ve all given three different answers about how it works. And it’s tax free, or it’s 22% tax or, you know, so it’s um, yeah, so that that’s sort of how I ended up where I am today. I just recruited our first advisor. So he’s a guy used to work with an iPad. And that’s been massive, you know, so I’ve just been able to, he’s helped me a lot with the advice piece and production and he used to manage a big book of clients at AIPAC. And so now I can get out there and start promoting it again, which will be great. So

Clayton Daniel
maybe what a journey that that’s amazing. I actually didn’t realize there was such a strong subculture of silver lines, or self licensed advisors in Inex wire. So, you know, they go like, the stuff that’s kind of interesting stuff that I get to find out about, you know, the members that have joined xy over the years, it’s blows my mind all the time.

Andrew Reynolds
I think it’s good diversity there, you know, and there’s a big shift going on, right. So there is a lot of movement and people reviewing where they’re at and the licensee factor in Yeah, not saying there’s a right or wrong but yeah, different different people need a different support system don’t know So

Clayton Daniel
absolutely. And realistically that that’s exactly why why we started this is a support system for whatever it is that you want to deliver as an advisor. And so I super interesting Genesis story that you have there. So, you know, as a personal reason, then it reflects into your professional growth. And then over time, you’re just hyper hyper, hyper nice into people that would you say? Because you haven’t used this terminology. But do you then see yourself as as a claims? Specialist?

Andrew Reynolds
Yeah, good question. Not at all. Really? Yeah.

Clayton Daniel
Because I’ve heard someone call themselves that previously. And but you haven’t used that terminology. So what would be the difference between a claims specialist and what you’re talking about?

Andrew Reynolds
Yeah, I’m seeing them after the claim has been approved. So I definitely get those inquiries. If you put in TPD claims assistance into Google, you’ll get 50, you get heaps of results, right? If you’re looking for, like a claim, or TPD, claim financial advisor or someone after approval, it’s really narrow, there’s just not a lot of help out there. I can definitely put people in touch with different claims support people or lawyers, if they need that, or you know, a lot of different. So I know a lot about it. But no, my business is very much after the claim has been approved. And nobody’s doing that very well. Like, yeah,

Clayton Daniel
that makes a lot of sense. I remember. And it goes to show you how long it’s been, since since I gave advice, certainly around, certainly around what to do with a TPD payout. But I remember getting super stuck in two, and you might you’ll probably be able to explain it to me. But super stuck in on all of the fun a minute details in there was those certain things where certain amounts would be calculated this and then other amounts, calculated like that. And I remember I ended up creating like this behemoth spreadsheet, and it was still probably wrong, because I couldn’t, I wasn’t entirely satisfied. But I remember it being a huge hole that I just spent maybe like two weeks running down. And in the end, my business didn’t really do any of it. So I sort of didn’t have a chance to get thoroughly involved in it. But by the sounds that you’re that is now your second nature. And I don’t I don’t I’d actually like to go through some of the stuff. What are some of the more interesting aspects of what you can do with a TPD? payer?

Andrew Reynolds
Yeah, thanks, Clayton. I mean, try not to can talk about this all day. So I’ll try and keep it short and sharp, but first of all, TPP through super different to TPP. Outside of so but that’s paid to you directly tax free. It has, you know, obviously, the usual financial planning implications there. But TPD paid into super, totally different, right, it goes into your super account first, you then get a form from the super funds, do you want to do a partial or full withdrawal? When you’re taking that money out of super, there’s this standard tax rate, this is before you turn 60 or preservation age, it’s 22%. But you get this special calculation, which is basically from when you start working to 65. It’s the future period, you couldn’t work? What’s that called? The tax free uplift or

Clayton Daniel
That’s it? Yeah. Tax Free up

Andrew Reynolds
lift? Yeah. So there’s a lot to talk about there. Right, the date, last word is gray superfunds make mistakes there quite often, it’s a proportion, that future period, you couldn’t work as the tax free portion of your proportion of your total working life, which goes back to eligible service date. So you run into all these problems with eligible service dates, if you consolidate, they always keep the earlier one. You know, we had super legislation come out two years ago to automatically consolidate funds. This has been massively problematic in the TPD space because someone gets a quote from their funds saying your tax rate is going to be 1%. And then all of a sudden, they go and make a big withdrawal. And they’ve been charged 10%. And the reason is that eligible service date that automatic rollover came in off sometimes without them knowing. So it’s a huge mind

Clayton Daniel
dodgy, like rest, super fun that they had. Along

Andrew Reynolds
exactly they like those $300 from a restaurant I had 20 years ago. I’m like, I’m sorry, it’s not. It’s not the quantum it’s that eligible service state pays. Now as part of a Law Association, when we’ve tried to lobby the ATO and the government for carve outs around. But that’s not been successful. And there’s also the thinking that really it is meant to take into account your total working life. It’s just the people with multiple super accounts have totally different tax tax treatment. So we often get two TB claims and this one, they’re going to pay super low tax rate on some tones, almost entirely tax free, and the other one has a really high tax rate. So we might segregate account. Once, you know they might take from one and leave the other for post 60 If they can, there’s a whole bunch of things from there. If you leave your money where it is, they don’t do that tax free uplift until you do withdrawal or rollover. So you’re relying on that fund to do this calculation going forward. medical certificates can expire after 12 months. So then most of the time 12 or 18 months or two years, you have to resupply those to keep getting that tax free uplift. There’s a way around that you can roll over to lock in that big tax free uplift on rollover so there’s all these unique strategies I mean, there’s the you can contribute to the fund before the rollover. If you do this non concessional increases the power of the tax for up lift, so some people can wash out the taxable component and use it for going forward. Oh, yeah, I can take they can take lump sum withdrawals or they can start a pension like a retired Australian would and that totally changes the tax treatment.

Clayton Daniel
Wait, wait, wait, wait, you can start a pension before the I before preservation eight. Yes. Yes, no, I love this stuff. I just I didn’t know that

Andrew Reynolds
I should back up. That’s exactly right. So when this claim was approved through Sirpa, it all becomes unrestricted numbers, their existing super and their TPD amount because they’ve met the permanent incapacity conditional release. All you need to start a pension is made that and have it fully unrestricted numbers. So you can start a pension. Right? Wow. Yeah, he takes it our clients do that they started with you still

Clayton Daniel
get the low rate cap in that environment because of a capital that you can pull out before it enters into that taxable environment.

Andrew Reynolds
So the low rate cap is for people over preservation age and under 60. Yeah. And it used to be 55. It’s working its way up to 60 people these days if they’re 58, depending on which side of one July they were born. I still get it’s now $225,000 rate cut. Absolutely. Sure. Yeah. Yeah.

Clayton Daniel
I get Yes. Thinking it was at any time before the age of 60. But it’s

Andrew Reynolds
not any present. I can say it’s pretty, pretty unique. Super

Clayton Daniel
Man. Sorry. Sorry. Before we move on. Yeah. Do you? Do you know anyone? And even age? Let’s call it let’s go super? Yes. Like, previous preservation age, the youngest ones 55. So do you know anyone on a pension under the age of 35?

Andrew Reynolds
Yeah, yeah, for sure. Most of our clients are in their 40s. It just so happens that way. We have some in their 30s, some in their 50s. And you get the odd person in their 60s, but most of them are in their 40s. And they have an allocate or an account based pension. Yes, yeah,

Clayton Daniel
mate, that is honestly mind blowing that I’ve never heard.

Andrew Reynolds
I mean, we’ve just scratched the surface to like, there’s so many unique, like, if you start a pension in the fund, where your TPD claim was, yeah, the whole income is taxable, and you get a 15% tax offset. But if you roll over your crystallizing that tax free amount, so Tony, the taxable portion, that’s taxable, you can give your medicals to the new fund to get a 15% tax offset. So there’s a lot of there’s a lot of unique things to TPD. And it’s not it’s more than that as well, like, all funds are a little bit different when it comes to implementing these things. So we track about 85 super funds, there’s two out of those 85 that locking the tax free, so you can’t do that wash out piece on rollover because locked in but the rest. So and there’s all these things we try and track like,

Clayton Daniel
wait, wait, but where are you get, you must be getting that information from the PDS because there’s no way that the client service person on the phone knows

Andrew Reynolds
what you’re talking about. It’s actually just through experience. And we like to talk to people because you don’t get that in the PDS either. Oh, you can’t get that stuff. So it’s all it’s all very hard to get answers on this stuff. But some funds are better than others, they ride out to the member, you’ve been TBD, your medicals would expire in 12 months or 18 months. And so that’s how we get that kind of information. And there’s about five different metrics we try and track across these funds. I’ll just say one more thing, like a massive issue for us last year in COVID was some super funds will take the TPD and put it straight into the person’s account and invest it in accordance with a default option. Most will or maybe half will put it into cash. And you can see already on Sambhal say after 90 days, we’ll invest it. But during COVID We had a bunch of super funds that automatically invested the TPD amount into the market at the perfect you know the worst possible timing. And so we had many, many people compensated because they didn’t even know in some cases that they tape it had been approved several weeks ago and it’s fallen, you know, 10 20% Ah, they but then they’re the types of things we’re trying to track across funds because and that’s not in a PDS that’s just this. That’s just the fun procedures and it’s a lot of these cases, it’s the fun not really giving heaps of thought to TPD they just go it’s new money. It’s automatically invested like any other contribution to a fun

Clayton Daniel
I reckon A lot of a lot of times the payout, there’s not, there’s not Well, in my experience, there’s very little hand holding on the payout, like is very much like, we’ve done our job work out, you know, we’re and they should be they should be proud of the work that they’re doing because they’re actually paying the money, but they feel like that is the crux of it. I’ve seen and this is slightly outside of your lane, but I’m sure you’re very well aware of it. So income protection within superannuation. Now, technically, it if you have an IP or is it TCP or whatever it’s called a claim inside of super, it’s the money should get paid super. And then you should claim the money from super into your own account. But I’ve seen people receive it directly into their bank account, just bypassing superannuation altogether, even though the superannuation owns the income protection policy. And so you’re saying, oh, yeah, I’ve seen some crazy stuff. Do you know what that would have been?

Andrew Reynolds
Well, actually, in most cases, they do pay it directly to the member and there’s special super condition to have an ad can be can be both ways. I mean, this is like you’re saying it’s all super funds are a little bit different.

Clayton Daniel
And yeah, because it because I have experienced both ways. Yeah, one of them. Yes, that my dad, that’s super interesting.

Andrew Reynolds
It’s interesting. And like you said about the hand holding, this is my biggest thing. Like, I just think, first of all, my relations were mostly with personal injury law firms. And so that’s where a lot of my original work was coming from. And I go around the country saying, you can’t just send these people, a pre completed withdrawal form. Without them understanding all the financial implications and the choices and things that aim goes for super funds. And I’ve tried a little bit, it’s a bit harder with super funds. And there’s often a lot of bureaucracy and things you’ve got to deal with. But they’re just approving these TPD claims put into their account, sending them a nice letter, but often these people, I mean, it’s hard enough for us in the industry to get our heads around what’s involved and trying to understand it. And there isn’t a lot of hand holding, there’s not a really good solution there for these people. In a lot of cases. It’s like, yeah, so yeah.

Clayton Daniel
That’s, uh, yeah, I’m, I’m still my mind still blown about the people under the age of 55. Having an account, I

Andrew Reynolds
very realized about as most of our clients Yeah. And then so yeah, that’s, it is, yeah, there’s some really great, unique opportunities for these people. They can take advantage of and there’s often they’re on Centrelink payments, in some cases, because they haven’t worked for years. So they’re on a disability pension or something. Yeah. So that’s got to be factored in. And how does this impact my disability pension? And yeah, the answer there, it’s all shielded in Super while they’re under age pension age under 67. But as they start pulling money out, there can be implications. So that’s the case as well, and you don’t start a full pension. In those cases, you might just start with two or 250,000, keeping them on to the the Centrelink mains testing and then the rest stays in accumulation, where it shielded, you know, so there’s,

Clayton Daniel
but technically once you get through that 250 You can just start another ABB anyway, right?

Andrew Reynolds
Well, the, the 250 is more like the Centrelink income test. Now this is a Centrelink means testing. And that’s the number at the moment in financial assets a person could have under the income test. Yep. So there’s different asset test thresholds if they’re single couple homeowner and non homeowner. Yeah. And under the income test, a single or a couple. It just works out to be about 250 At the moment under the current Centrelink deeming rates. Yep. So then that’s why you might limit it to that much again. It’s different for everybody if they have

Clayton Daniel
any other one once you pulled that entire 250 Yeah, you could then just go back to the lodge.

Andrew Reynolds
Yeah, absolutely. Yes, exactly. You can top it up a recast doing another one that stuff. Yeah, yeah, man,

Clayton Daniel
if I’m ever injured, I’m coming directly to you. Hey, that’s, that’s so cool. That that is I love that kind of stuff. This is

Andrew Reynolds
the thing. The beauty of it, like you just said is people don’t have to sit in front of us too long to know that they’re in the right place. Because yeah, especially if they’ve tried to talk to somebody else about it, or try to find client services about how this work. So it’s so nice. It’s so and it’s not even the theory, even if you know that well, you need you need years of doing this and dealing with super funds and we know where the mistakes happen and how to the implementation piece can be as important as the advice you know, so

Clayton Daniel
yeah, well, it is. I think it’s a weird thing to be a specialist in right and I’m sure you probably agree to that because because even though as you mentioned it 20,000 People, you know, you claim a TP TPB event events in it within super each year. That’s still really low percentage that it’s gonna be one of Clients, right? So then it doesn’t real. And this was the experience that I had, was it, you know, because I was always I loved to learn about all of it, because Superannuation is so interesting when you get into all of this stuff, right? Like these huge, you know wormholes, you can just crawl into and just discover all this amazing stuff super, like intellectually rewarding. However, if over the course of a 40 year period, you complete 10, you know, total permanent disability claims, in your entire career for you know, like the 80 to 100 families that you look after, like, it just doesn’t really make much sense to allocate a huge amount of time to doing it. And so, so I was aware that there are a lot of claims specialists out there that can help to get a good claim. But yeah, I’ve actually never met someone who understood this space, as, as well as you do. It is really

Andrew Reynolds
narrow. And it’s really interesting to me, like when you’re at the bigger licensees, it’s not a space they want to play in, right, I mean, caught a lot of claims that are small, you know, the average TPD amount for a super might be 100,000. So it’s really hard to help people and then you get the odd, you know, half a million million million and a half, you get the larger ones too, or you get the paper with multiple claims or other complexity going on. But it’s not, especially when it’s licensees and where, you know, funds under management is the biggest target, it’s not really a space they want to get into really, it lends itself to a fee for service completely unconflicted model, yes, you can’t be aligned with the product either. Because you need to be able to tell people, the rollover pace and locking in tax free and stuff. So it’s it and look, they just aren’t big numbers, like you said, Clayton, I mean, there’s quite a lot of claims every year but but a bunch of those people need the money desperately. And all they need to know is how’s the tax work? Is my Centrelink going to be impacted? And am I missing anything major. And for these people, we have a, like a low cost consultation service where it’s purely factual and general information. And we just be really clear on the you know, what, what this is and what it’s not around the advice piece. And like you say that there might only be five or 10% of those that need holistic, ongoing advice and starting income streams and things like that. So that’s always been the challenge is, how do you and that’s where the website has been fantastic. Like, I’ve got this website. Now there’s a free calculator on there. There’s five videos answering the same question I get asked every day, you know, how does the tax work? How does? Yeah, dental ink work? What are the key and so I just try and give all that away through the website. And that will be enough for most people, and then they start to self select. They know I’m not missing anything that explains it. I can do the tax calculator. I can check it. And then some people know that yeah, if they if they’re going to be using super going forward. They need advice pretty much right. Yeah. And it kind of needs to be from us or someone in this area.

Clayton Daniel
Yeah. Um, so basically, like, what’s the window with someone is a potential client?

Andrew Reynolds
Yeah, that’s interesting. I mean, in this business, it tends to have to happen quite quickly after the claim. Well, that’s not entirely true. But that’s just the way it goes. You want.

Clayton Daniel
People want to get their hands on

Andrew Reynolds
the money. I want to get a hands on the money. And we definitely want to talk to them before they do anything if they want to do a small withdrawal. But even a lot of people don’t know that they can do partial withdrawals and keep making I mean, it’s it’s crazy. The lady I talked to yesterday $700,000 claim and she thought she had a one off choice to withdraw, and she thought it was tax free. She was looking at about 80 Something $1,000 in tax. And so it was all just this unfortunate people get to that point. They think it’s TBD, TBD is tax free, or they think it’s a flat 22%. And it’s sort of both right and wrong. Those answers the TPP has no taxes, that early withdrawal from Super that creates the tax and it is 22% on the taxable component, but there’s this tax free uplift. So it’s it’s usually we want to talk to people, they’ve just had a claim approved, and they’re about to complete that withdrawal form and decide what to do with it. And then it depends there’s no real window beyond that like medicals will expire. So that’s a big part of what we talked about. They might have other claims progressing, you know, they might another TBD claim, or they might be personal injury or they might be on work cover. So sometimes they might want to wait several months until everything else finalizes and if if the medicals expiring is an issue. They have to get advice before that 12 months is up usually, they do definitely want to look at where that TV money goes. Like if that massive TV amount is getting invested. That’s one of the key things they want to look at quickly. And look they can engage us for advice on that. case or they can talk to their super fund or, you know, just be aware of that. Otherwise, there’s no real window necessarily so long as they can provide medicals that as valid and updated if they need to, they can still do it down the track. And some of these strategies, you sort of get one off, one go at it. So once you do roll over, you can’t go and re provide medicals and do it again. You know, that’s, that’s tax avoidance. That’s not tax reduction. So yeah, there’s some, some things like that.

Clayton Daniel
Yeah, that’s an that’s an interesting thing. I know. I know that the ATO does give people you know, occasionally they’ll let things slide if there’s mistakes, you know, genuine mistakes. And in your, in your opinion, that doesn’t happen in this in this in this, you know, this area of of advice, if people make a mistake, is it pretty much on rewind double? Depends what

Andrew Reynolds
you’re talking about there. If they make a mistake, like they’ve done a rollover of their rest account into it. That’s pretty much unreliable unless you can convince the fund that accepted it to reverse it out and send it back, which we have had. But you’ve got to be on that really quickly. There’s no leniency on the ATO and that kind of stuff.

Clayton Daniel
And then even with pro What about a withdrawal? Can you

Andrew Reynolds
know, it’s really fun? It’s, it’s a good question. It’s really up to the Superfund, they’re the ones that calculate the tax and report it to the Tax Office

Clayton Daniel
name. And Shane mate, which was the good wants to get to getting

Andrew Reynolds
a white guy there, but I could, there’s mistakes all the time in the tax free uplift calculation. And I think the way I’ve been doing this for, you know, solely for four and a half years, and they’ve picked up their game a lot, because how many complaints we’ve made and

Clayton Daniel
remote hold 195 of the injured.

Andrew Reynolds
So that stuff can always be fixed up. But this the Superfund has to fix it up. And sometimes they try and fob you off and say go fix it up on your tax return. And they can’t do that. Because it’s the Superfund reporting your taxable income to get them to fix it up.

Clayton Daniel
How do you do it? How do you deal with the human element? How do you deal with the the, because to me, everything is achievable under law, except one in 10 people that you speak to, from these companies actually understands the rules. And so 90% of the time when you’re having conversations at this level, I might be even worse, but I found that the more accurate and niche that advisors, including my own previous advice was the more I found inefficiencies in ability to get the actual rules completed. So how do you deal with the human element, all these super, you know, specific rules and regulations.

Andrew Reynolds
Look, it’s always a challenge, we have a number of extra steps throughout our process that other advisors wouldn’t even think of, because we’re always trying to cover off the end, the errors are going to happen, and we’re gonna have to fix them up. The beauty of being so nice is I have a template email for all these errors. I’ve usually got one before we do anything to say, make sure this withdrawal is processed this way. And this is our estimates of how it should be treated the rollover from one fund to another well, that goes from almost 40 or 50% of the time. So so often we go, but we always send, we either send the request straight to the phone with a cover letter saying this needs to be treated as a disability super payment. So it needs to be preserved and blah, blah, blah. And and if if there are problems, the first thing we check when, you know, rollovers or withdrawals and processes, what were the tax components so me and the staff were all very clear that’s that’s a step in or every time implementing a client so you can get onto it right away. There’s a template for withdrawal that was done wrong or rollover that was done wrong. So it’s all very streamlined and templated and and this very process driven. And it’s absolutely crazy some of the funds and I won’t name in shame but Garth, I mean, I’ve had I had a fun last year it took me six months to get an eligible service date and I was given five different dates throughout that six months. I’m like it’s an eligible service date. How can it be that hard? I don’t understand. And everyone gives a different tax. Right, right. So yeah, it’s sometimes the big places have a bit siloed and claims don’t talk to the client services and it can be a real interesting mess sometimes.

Clayton Daniel
Which which come which makes me come back to this concept that I love it. Like I really like what you’ve done because it it The issue I see for your business model, however, is client acquisition a. Technically you don’t want, right? No one wants to talk to me. Yeah, yeah, yeah. It’s always like, you’re you’re in a position where things are rather unfortunate if they’ve made their way to speak to you and your Yes. So, do you find your greatest acquisition of clients happens with your website and what you do publicly direct to consumer? Is it through claims specialists that are already out there? Is it through advisors? Like, you know, let’s say, I still have my business, and I got to be with you. And then, you know, five years later, one of my clients and I go, Oh, Andrew, like, you know, like, or is these legal firms? Or, like for you? What is your best client acquisition channel? Because that that to me, is because I think if you can, if you can answer this, well, this question, well, then there’s so many business models that are out there and available to advise, that currently are impossible to to run profit profitably, because the demand is so nation so low, however, so that, I guess that’s probably the most, the most amazing thing that I’m finding that this conversation is, because it’s so hyper niche, to me, that would freak me out to have a business model based on it, because I go, like you How on earth am I going to get clients? Right? So I am really interested in how you get clients, because it not only solves the problem for you, but for many advisors who potentially might explain themselves in a different, but still a hyper niche space.

Andrew Reynolds
Yeah, that’s great. I, that’s great, because it has changed a fair bit. And when I started four and a half years ago, I very much didn’t know if TBD would be the main focus, or part of what I do, would it be more general pre retirement type planning, which is where I’d also been heavily exposed to at AIPAC and perpetual and so I didn’t know. But I have had relationships with personal injury lawyers for many years. And that’s, I mean, I had a few law firms saying we need a solution like this. So that was part of the reasoning to step out on my own and given me the confidence. And so I knew there would be some interest and look pretty quickly that generated enough work to, for me to not do anything else except TBD. But what’s happened, I mean, it’s always hard to change firms and what they’re doing and tell them that what you’ve been doing for 10 years, there’s a bit of a risk here, and so that the website now probably generates a bit more than half the inquiries and the people that go ahead with advice. So the website has been a game changer. where I was before, I’d have to be going to conferences, and talking to lawyers, and getting in front of them and trying to really keep front of mine was tricky. Whereas the the website’s probably only 18 months old. And since Lee Wow. Fitzpatricks in November last year, I’ve been able to really ramped that up and put more on there and do more videos and things and working

Clayton Daniel
like written SEO blogs or video explanations like,

Andrew Reynolds
look, I was doing SEO stuff for a little while, but not long, because and that’s been on hold forever, because we were pretty swamped. It. It is this. It is SEO, and there’s just no one if you go and google it, we were ranked number one for TPD. Tax estimate or calculate or something like that. So that’s a big one. Because everybody wants to know, and they’re all often misinformed. So that generates heaps of people. And then the next thing is, I think the videos just give people a bit of peace of mind that when I know they get to see me, it’s always hard to because I’m dealing with people everywhere. I’ve very rarely meet these people face to face, I do occasionally but often they’re interstate or they’re regional. So I think the videos have helped a lot people and and so when people make an inquiry, we have a templated email that goes out. And here’s a tax estimator, if you want to have a guide that here’s some videos, frequently asked questions. Here’s a checklist attached, and it’s got too busy. It’s got so many things that people can have a look at. And when they look at the videos, a lot of people said, thank goodness, we found your website because I was so confused. Nobody knows what they’re talking about. And so that that’s been huge, you know, so, yeah, look, I haven’t done much beyond that. I mean, we’ve talked to my new advisor about should we talk to advice groups, and we’ve done a little bit of talking to super funds, but I haven’t done much because we’ve been so busy, I think I think

Clayton Daniel
thorn in their side.

Andrew Reynolds
And then there might be a conflict. And so I don’t know how to go. But personally, I think superfunds need to do more because Sure, no, Nana people on me that don’t understand what they’re doing when they sign that withdrawal form. That’s right, crazy. I mean, they need something to better educate these people. But it’s a tricky one. Sometimes they haven’t had a great relationship with a superfan anyway. And that might be a big trigger for these people just to go for withdrawal. Because I you know, it’s taken me two years to get this. So it’s a hard one. But yeah, the website and XY has been great there. I love the way you know, the Ben Nash’s, and the pivot were and these really nation to this space. And, yeah, yeah, that’s, that’s been what’s helpful. And I could do more if I had had more time.

Clayton Daniel
That’s so interesting. So 50% from Yeah, and, and what you’re saying right there, and it is super interesting is that before the internet, it was all about who you knew locally, and who you could get your client to refer. And, you know, get them to bring you another client that that essentially was like local, and Yellow Pages and word to word. of mouth. Person A person. Yeah. Word of mouth. And, and, and when the internet came along, and the longer that the internet’s been around, it’s a bat. Rather, rather than being super flat, and not very deep. Now, it’s super deep, and really narrow, right? So and so I can say these things. But then it’s, it’s always remarkable. I mean, it’s a really, it’s a, it’s a systematic miracle, the fact that your business model can exist, right, but the fact that, that you do such a niche thing, and there just so happens to be enough people that fall into that in a personal capacity, that it that it’s a blue ocean, that no one else is competing in this area, that you’re really the only source of truth, to the whole thing. And then to make it even better as is you are what all advisors aspire to be, which is to deliver like a phenomenal financial and life outcome. And so like, it’s, it’s, it’s one thing to sort of talk about it theoretically. But it’s another entirely so to sit here and listen to, to what your business model is in advice. It sort of reminds me of like, like someone, you know, goes to med school and becomes in like a heart surgeon. And then now I only deal in aortas you know what I mean? Like, it’s just, it’s like, suddenly, so, so, so, so nice, that it’s awesome. That your, that the internet allows your business model to flourish, I think that is really like it’s really promising it to be honest. Because if, if advice is what I suspect is, and that is moving to a situation where tech will handle masses, advises I’m moving more to this medicine approach of you know, there always still be GPS, but you know, dermatologists and, and and it’s, it is really cool to see it in action and happening. So. So if Internet gives you 50% At Is it like the legal groups and your professional network that kind of fill in the other? 50?

Andrew Reynolds
That’s right. Yeah. Most of them have come from the personal injury lawyers network. And I have relationships with a number of them nationally, some big and some small. So that’s where predominantly they were all coming from. And you’re right, the internet has just fell out. Exactly. I’m very lucky that we can do that. And the internet, because if I was just working on my local regional area, I wouldn’t have a business for sure. I wouldn’t go this niche anyway. Yeah. But because of that, I can I can, I can be the absolute expert in my very, very narrow. I had a laugh and you said surgeon because my new colleague, and he’s another Andrew, which is a bit unfortunate, but he he’s like me, we used to work together. He’s one of the best advisors I’ve worked with. And it’s so technical. And he keeps getting blown away by how much we can do and help and he keeps the surgeon so if someone wants to talk to him, or I goes, No, I think they want the surgeon you know.

Clayton Daniel
It doesn’t surprise me just just with the precision that the that you’re talking to, in this particular era. Yeah, let’s say and this goes back to the business model. Let’s say You know, say I don’t know, let’s say 100 People go through your service per year, what percentage of those stay on for retirement planning or for, you know, ongoing, let’s call it traditional there I say it, compared to what we’re talking about financial advice like this your is, let’s say, for example, obviously, you know, if I have my own business, and it happens to my client, I send them across to you, I’m sure it goes without saying you’ll shoot, you flick him back across to me, and I handle them again. But let’s say for all these people that come in direct to you, do you do any traditional financial planning after you’ve achieved this outcome? Paul?

Andrew Reynolds
Yeah, that’s a great question. So I still do general and holistic financial planning and can do that. And my advisor who’s joined me, that’s his background, too. And he’s been super helpful to have that extra expertise as well. So, look, wait, yeah, I have two pretty different services, there’s a very defined scope piece of advice, because these people that don’t want to pull their money out of server, but they don’t want to risk, the medicals or the Centrelink implications and the text so we might help those people. And it might be one off, and they can come back to us if they need help going forward. And then there’s the holistic advice. And a lot of these people have working partners and all the usual things that come with that, and, and they have larger settlements or multiple settlements, and they need to segregate accounts, to do more advanced strategies. And they’re very likely to be long term clients, you know, I think they just can see the usual reasons for needing an advisor ongoing, and they also see the added complexity of the TPA space. And like he’s talked about, like recasting and future contributions, and if there are an income protection, the deductible contributions and all those things. So So yeah, we it might be half and half, maybe half of them just need one off advice, quite defined scope and narrow, and in the other. And, yeah, and then there are a bunch of people that just need that first off, sort of factual information type session, and that’s all they need. Before they feeling that withdrawal from

Clayton Daniel
my that is sinsational Regret where Believe it or not, we’ve actually kicked on through the whole, the whole our mate Ross Yeah. Hey, because I know, I know, when we’ll sat next to the Zurich blue cocktail stand. And I’m glad we got to cover a little bit of it. But I tell you, this was exceedingly it to me, it gives me a lot of hope to see more and more of these business models. I mean, such a fan. If you think of the CIS act, how much is going on in the CSET that that we get to use on a day to day basis like this is there’s a lot in there. And we we get to use about 10 15% of it kind of thing on sort of a regular basis. But the amount of different speciality that could come out of what is available to be done because of all the crazy levels of conflicting in some cases, rules, regulations, gross all the different aspects of that financial advice covers. Um, yeah, I My hope is that an advisor or two is listening to this and then says, I think I can go down this path of being known and delivering on this really specific thing. Because, yeah, I mean, realistically, as soon as you said, there’s 20,000 people per year that’s going to have a disability event inside of superannuation per year. I went, Oh, I get it. I get that, you know, like that. That makes a lot of sense. If you’re the guy that does that. Yeah, you only what do you need, like, point one of the percent to have an overwhelmingly large business and and the number of different models. Like I said, the SIS act is very complicated, the number of different versions of what you do is, would be in the 1000s. So make I hope that other advisors can take the bravery that you’ve taken and take on take it on themselves. So thank you so much for coming on and sharing. Yeah, I’m glad I got dragged out of retirement for this podcast.

Andrew Reynolds
Right. Excited Clayton massive thank you to you. I love what X Y does, and it’s absolutely helped me take that self licensing and that really take the narrow niche to the next level. And I love the people in the group and the positivity so awesome. What you’re doing. Thank you,

Clayton Daniel
Nate. Thank you. All right. Take care. Speak soon.

Andrew Reynolds
Take care

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