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#286 Tim Farr – Transcript

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Andrew Rocks
Hello, my name is Andrew Rocks, aka Rocksy. And it is a another pleasure to be here as the host of the X Y Podcast. Today I’m interviewing someone who I know very well, may his name is Tim Farr. And he’s the Chief Operating Officer of virtual business partners. Strap yourself in. And there’s very few businesses of this scale. And he’s going to be able to have some unique insights into what goes into making a successful scale business. Without further ado, Hi, good morning, Tim.

Tim Farr
Good morning rocks. Great to be here. Thanks for having me.

Andrew Rocks
That’s all right. And it is your first time on the podcast.

Tim Farr
It is. but it’s not the first time you and I have spoken by a longshot.

Andrew Rocks
Now it isn’t it isn’t. And just as a letter of introduction, Tim and I share a couple of things. One is that we both started with clients of virtual business partners, and we now both involved in virtual business partners. But Tim will be the star of today’s show. No doubt. Tim, before we get into that before you were the chief operating officer, you were a financial planner, like many, many people listening here, and I always like to get a feel for how did you get there? You know, what, what was your, your story and what brought you into financial planning?

Tim Farr
Yeah, I guess we’re all affected or influenced by our parents and what we see them do in their careers. In my case, I had a couple generations of accountants in my background. And so as a generally lead towards finance, I felt that I had a liking for commerce and numbers and those sorts of things, which I did validate later in life. But I started out with a accounting degree, and very quickly realized that that wasn’t for me, in the sense that a lot of the training for accountancy to start with no, that’s not the case later in the career and not whenever an accountant would do is largely about the past, what have you done? What’s happened. And for me, financial planning, and the aspiration to pursue that as a direction was all about, what can we do to improve the future rather than accounting for the past?

Andrew Rocks
And whereabouts was that team where were you from?

Tim Farr
So Sydney born and bred, grew up in the hills area, as a kid, and that’s a great place to to, to grow up and had a great environment to do that. But my path was a little bit unusual in the sense that I didn’t take the usual sort of career trajectory. Instead, I got married, very fortunate for find my soulmate early on in life. And that’s sort of as it does, it’s tends to stall, the sort of things you do. So, you know, I remember sitting down with my wife at the time and going, you know, what, I could probably just as be as happy as an architect or an engineer, or a financial planner. So I remember actually making an intentional decision to pursue that trajectory. And back in the day, I actually, I think I started out with a, it’s called integrity, they became try Becker, and then became what we know as Kaplan today. And so studying the industry outside of the industry was really challenging doing that independently. So just

Andrew Rocks
on that you’re, you’re working as an accountant, or you just finished your accounting calls. Just to jump into financial planning, what you is that

Tim Farr
completely different career. So I think it was, it was it was the year 2000, around 2000 2001. So that I sort of made that intentional decision. And I remember, you know, lining up every job application, as I was studying, I was looking for a different direction to take. I had a big thick fall about 140 job applicant. So I was using through recruiting processes and just getting nowhere. So if back in those days, I actually looked up the FBI website, I found, you know, businesses in the area that was that was appropriate to work in, and actually just went literally went door knocking and said, Hey, look, I’m not ready now. But you might be ready, I might be ready at some stage in the future. So I found that that really direct relationship approach was far more effective in in striking, creating those opportunities back back very early days.

Andrew Rocks
And so you complete a capital But what was it back then? Was it the diploma?

Tim Farr
Yeah, the diploma which I think is now like the Advanced Diploma because was eight modules. That was that was the sort of the full thing. And, and so I started working in a practice. And I literally was the guy who emptied the beans made the coffees, did the funds research that now we have 400 people do. I was the guy that was bringing the cold list of clients that no one had spoken to for three, three or five years, you know, on behalf of the advisor, and then work your way up to associate and so forth. So I sort of had that great experience of going into the ground level in financial services. And I think I look back at that. And as much as it was sort of a hard slog to get through, I think that’s really given me a great understanding and appreciation of what the financial industry is, is at the ground level. And also the things that we are asked our team members to do in supporting businesses.

Andrew Rocks
And knowing you now it’s also molded, the fact that you’re very keen on the best highest use and, and probably very early on as much as emptying rubbish bins and calling and stuff sitting on hold to, to product providers was fun. It’s probably not something you saw yourself doing for the rest of your life.

Tim Farr
No, but I look back at that time. And I go, you know, reading those clients and trying to get engagement was a great life experience to build resilience and also sales and relationship building. Because I knew that if I got through nine noes, I’d be just as grateful for the No, because I knew I got a little bit closer to the Yes, someone who’s happy to engage. So and I think that’s the approach I still take 20 slides ago. Okay, well got to know now. But I’m one step closer to getting the right outcome.

Andrew Rocks
It sounds like this sort of comment also that’s made by a father. You’ve got a couple of kids here.

Tim Farr
Yes, I got a 12 year old, an eight year old. And I think they teach you just as much as you learn in work. And so it’s great, then saying go to that high school experience now, as well. But there’s some couple of things I suppose you learn as being a father, in the same way, when you get married, that seems to shift your priorities, so too, does being a dad and that they could awkward things?

Andrew Rocks
Absolutely. So after you’ve, you’ve started in your financial planning, and you move to associate advisor, which by the way, is now an actual role, but it was more of a vibe. We’re abouts was that and how long did you do that? For?

Tim Farr
Yes, that was working with a an a&p line practice in, in Liverpool, actually, originally, because when we married, that’s where we looked relocated at the time. It was a practice it was close nearby. And in fact, I remember being tasked with this thing called paraplanning that we have today, when paraplanning didn’t even exist.

Andrew Rocks
It was for planets in Parramatta.

Tim Farr
So I remember sitting down with it and sort of being tasked with all How do you make this role? How do you make it work? What do you do when there was no guidance or technical support or even a thing called Power planning. And so that really was the requirement to move to an advisor back then. And then build someone behind me to take over that would have been created in that capability. So I worked there for a number of years. Now, long story short, there’s a bit of a succession plan that didn’t work out, particularly as everyone would have expected. It’s very

Andrew Rocks
rare, very financial planning team.

Tim Farr
I don’t know. But that was great catalyst. Because I you know, I remember speaking about being a father, we just had our first child, Chloe, and my daughter, and I went to my wife and said, Look, can Is it okay, if you feel I step out of my home? Perfect timing. And to her credit, she said, yeah, why not? Absolutely. This makes you happy. And I can support you in doing that. And that’s exactly what I did. So at that point, I had an introduction, I was fortunate enough to go and sort of, you know, build a capability alongside another planter, Michael entry over towards Hurstville at that time, and then later Sutherland. And that was a great time as well and learned a lot of things on the way. I think all of us, you know, Roxie and I’ve talked about this in as well, various meetings, you know, if all of us reflect on our experiences today, and you asked, Would you do it the same way? I think we’d say a resounding

Andrew Rocks
Oh, I think I haven’t got a choice. Have you learned from from last lesson? I think that’s the difference between wisdom and knowledge really is? Yeah, absolutely. If, if you’re out there, and you’re listening to this, and you’re in your 20s, I wouldn’t be latching on to someone who’s 65 Who’s got 40 years experience as their wisdom as Lily,

Tim Farr
go. But that’s what stars I suppose our our current conversations that roxham I’d have in in various businesses that were involved with, because we go look, how do we how do we accelerate that growth rate from those very early days? And and how do we support businesses to approach in a different way that gets scalable outcomes for everyone?

Andrew Rocks
And what kind of a financial planner Do you think you were when you’re giving advice?

Tim Farr
I thought I was pretty good.

Andrew Rocks
That’s what you mean. But maybe elaborate. Maybe a bit more around that, please.

Tim Farr
Yeah, sure. So I look, when I looked at financial services, there was a couple of things. I saw the Most businesses that wanted to be everyone to everything to everyone really struggled, particularly when they didn’t have scale. So that very early on, I at least, concluded that I needed to focus my attention on specific areas. So for that reason, I largely focused on corporate superannuation. Working with, you know, ASX listed businesses etc, you know, to create appropriate employment plans through through corporate superannuation. And look, whilst that was largely that models been largely abolished, in many respects, it was the greatest way for people to access, affordable financial advice that was funded through those group arrangements. So I’d go in, I do basically speed dating with 20 clients for a day, you know, run education seminars, which a number of people in the corporate space would do for a period of time. But the other thing I also came to realize very old early on is, and then maybe goes back to the accounting aspect and my passion for business. But I concluded that for business owners, the way to improve their financial position, many of the strategies that are applicable for pay as you go, or personal financial planning, just doesn’t have the same degree of impact for those that are in business. Those who own businesses, the best way to improve their personal wealth was in fact to drive the performance of the business, which both increase the profitability, and also the valuation to them. So for that reason, I went down a very unusual path, I think, at the time, I was only one of six advisors in that particular network that were formally accredited for business advice, specifically across all of Australia. And then my focus largely became on business advisory, we are running, conducting valuations, and, and working then in a sort of a chairman capacity to bring the right people into these businesses to help drive that for or for the goal of driving their personal outcomes. So after a period of time, and sort of how I did that for a number of years, I then realized that, that I should look and focus on the business aspect of it, I made a decisive decision to do a few things differently.

Andrew Rocks
And just before we move on to the sort of your pivot, you mentioned about the employee super and education and that sort of gateway. You’re not the last person who some of you mentioned that, in fact, a few guests in the last month that mentioned that, and it kind of was an unintended consequence of regulation. But there are now definitely companies that are in there filling that that void. In fact, one of the cofounders of xy Right, right jam is he’s he’s working with a company called employment hero. And it’s just gone from strength to strength. So there’s a real demand for that. And I think that that’s something that that advisors will potentially get back into, although it might be in a different way, because it’s advice on scale that potentially Australian

Tim Farr
Absolutely, and back to that point of, of, you know, it’s really about financial literacy, if I look at financial planning, ultimately is about clarifying goals, but also you want to increase the literacy of the clients you’re working with. So those sorts of schemes to provide through employment relationships, I believe that the validity of those services is just as relevant as what it was 15 years ago, today. And businesses who are actively looking to engage their people in culture, to drive team engagement should definitely be exploring means in which they can provide financial literacy programs, as part of that experience, through those different models and some of those avenues you mentioned.

Andrew Rocks
So you’re there, you’re a frustrated business advisor, you’ve been a frustrated accountant, from a family of accountants say, you figure that you’re the funniest one in the family. So you might be branching out into financial planning. I don’t know how that ended up. To be concluded, but and you’re building me some supplies for what what did you do next?

Tim Farr
So I sort of sort of a significant moment, I suppose. So I found myself in a situation where, you know, a lot of people probably listening to this have experienced that as well, where you sort of have a life sort of wakes you up and said, Hey, look, you just need to reevaluate things. So I had a moment where I actually found myself having a cardiac event, only my 30s. And where I found myself, you know, sitting in a cardiac ward, with a number of different 60 year olds who’ve had major sort of issues. And it was purely just out of the way I was running things, the demands, I put myself under the pressures I had, and perhaps I hadn’t got that balance right, between business and personal. And so at that moment, I made the decision that I need to make a change. So at that point, I then move forward to sell the financial planning aspect of what I was doing, and really focus on the business consultancy and business advisory at that particular point. Now, what that meant is, I was like Roxanne mentioned, I was one of the early adopters of virtual business partner services, services. That was largely because you know, at the time and we still talk about this issue of cost to serve the one of the Latest areas of expense is around labor efficiency for business. So if you can leverage the economic arbitrage that’s available through building global teams, then that is a really tangible way if you get that right, to increase the profitability of the business. So for me, that meant that that was my sort of introduction to virtual business partners, David Kearney, at the time, he came and spoke to a professional development conference, I liked what the style of person he was, and when what he had to say, and I think I was patient number eight in the zombie apocalypse where Ross, you’re a little bit earlier than that.

Andrew Rocks
What did you have your early days when you were looking effectively, to leverage your time and, and the way in which you speak about it now is very much a seasoned veteran looking, looking at the whole thing. What kind of tasks Did you did you get them to do? What did you not want to do? Again?

Tim Farr
Yeah, so I concluded that being in business, the challenges is if you’re both an advisor, and an end runner operate a business, it really limits your ability to scale because the businesses rely on you for revenue. And that competes with the the various responsibilities you have in business itself and the ability to scale. So you know, what, what I was looking to do is create a, an environment where I no longer was the authorized representative, I no longer was actually client facing, but instead focused on building teams of people who did that instead. Now one of the interesting things that happened a time which really stalled my decision to move out of fp is my licensee actually wouldn’t allow me to make that transition. So in other words, for me to maintain my car, and my AR, they demanded insisted that I actually maintain my authorized rep status at that time, which actually hamstrung my ability to build a platform for advisors and to build business at that point. So having signed a master services agreement, 10 years earlier, having these sorts of caveats and restrictions, that meant I was pursuing a path that was no longer aligned to the licensee. So combined with the health issue I had at that particular time, sort of brought everything to a head and go, You know what I’ve no, I built all the systems to enable scale. But at this point, I’m not going to be able to go forward. At this point,

Andrew Rocks
I’ll let you know, I get people to say a shout out to the the companies that were talking about, we probably leave that one alone team leave that one on to an imagination.

Tim Farr
Look, it’s not negative. But you know, in these sense, there’s great people in all those businesses, I look fondly back at all the relationships I had, many of those people unfortunately have passed, but who are pioneers in those businesses, despite the negative public reputation. You know, businesses are made up of people. And there’s some really good people that are attribute my learnings and experiences along the way. It was just the reset of roles that they had at the time and the playbook they had.

Andrew Rocks
And what I was, I was hoping to now just change gears and look at a big excitement for the reason that I wanted to talk to you today is just the unusual position, you’ve found yourself running, what possibly is the largest by headcount, financial services business in Australia, and just getting some key observations. So, you know, the business that you’re in, that I’m very familiar with, maybe gives a bit of a feel for what it is. And from a financial planning perspective, and, and you’re kind of like the keeper of all secrets, you’re across all licensees, you’re across all tech. So maybe once you’ve done that, I’d really like to pick your brains and, and we might even get to a stage where I ask I hit you up and say, who does best what piece? Right? I’m giving you a few minutes. on that. So, so maybe give me a bit of platform of what you’re doing now. Yep. And then I’d like to ask some questions about your observations.

Tim Farr
Yeah, great. So that’s how I made the transition from you know, making an unfortunate what I felt was a really unfortunate decision to exit because there was no other option at this stage. I couldn’t transfer licensee because of their view of who owned clients, etc. You know, I just pursued that the business consulting at that point, you know, virtual business partners had had some dealings with me, they knew who I was. And they’d asked me to come and drive, building paraplanning capability within the business, initially as a consultant, and then specifically so I went into that business with the express intention of scaling and creating a scalable advice delivery, business empire planning. When I looked around at the market at the time, the models that were typically used around pay per use and licensee specialization. I couldn’t find any examples where they’re actually scale on on any significant level. So you know that the not I really wanted to crack is like how do we serve and provide exceptional advice? As we look at financial planning, a lot of the constraint even though we’re losing financial planners at a fairly alarming rate, the main sort of sticking point for for much advice production is the generation of the documents themselves. So you know, even in the power planning function, that is a resource is quite limited to obtain the right skill sets and an appropriate costs that makes that appropriate. Now in the role that I have, we don’t ever seek to replace planners that sit in businesses. In fact, you know, we’re very much looking to create a career platform for them to move into more leadership of the teams we put in place rather than replacement of. And as Roxie would attest, you know, I’ve heard you say before, spending a bit becomes pretty addictive, right? So. So if we’re driving that for businesses, then they’re only going to invest more in Australian resources in teams, as we’ve we’ve done ourselves. And I might touch on that a little bit later. around that. So I came into virtual business partners. And I really thrilled that through the team, of course, it’s not my own individual efforts, we were able to go from zero to 100, paraplanners, in the space of 12 months.

Andrew Rocks
Wow. And was it? Was there any particular FCL that you worked with? Or, or, or maybe give us an idea of the early days?

Tim Farr
Yes. So the early days were pretty, like hands on, I included me sitting alongside paraplanners, looking at the strategies and the documents that are given. And to their credit, you know, you hire the right people, you train them and provide the right tools and support. It’s incredible what people can provide. And particularly in this case, where we create a large core group, you bring any new person into that environment, the speed of learning, and the culture that’s created is just it’s just electric, absolutely electric. So in the early days, the business that in virtual business partners was largely a&p focused as a legacy of where business activity it started. And also, as anyone in the industry would know, you know, a&p is usually been slapped around with enforceable undertakings and light, which means they’ve had to get very, very clear and explicit about their policy. Now, I’m not going to go into what opinions people might have around those policies. But what it means is, is a&p had to be very concise about the standards and the advice standards. And we knew if we built them to those requirements, we could satisfy a number of licensees bearing in mind, one of the key goals for the paraplanning function was to create a licensee agnostic offering. And again, part of that scalable issue was, they might have been an ri advice, paraplatin capability, it might have been, you know, some other licensee, but how do you actually create a genuinely agnostic capability? And the answer that was really around? Well, they’re all playing by the same rulebook. But it’s just their interpretation of those policies will differ. So as long as we, you know, typically think about, you know, if you do all things to all people, you become the master of none, right. But our mastery, mastery was around how do we be masters at understanding those variables, creating that one source of truth between us, and clients, and licensees, and then focus all the training, development quality assurance around that very early, which meant we were able to serve, you know, you know, 15 to 20, different licensees, you know, much more now these days. Because for those reasons.

Andrew Rocks
And Where’s where’s the business at today, Tim? The paraplanning? Business?

Tim Farr
Yeah, so the vice business has been great to see that that growth around 200, I’m no longer sitting next to paraplanners, helping them with a strategy to get my far more capable people who do that every day, which is awesome to see. And I get so much excitement from seeing people who didn’t even know what paraplanning was, like I was 20 years ago, be able to perform an exceptional level very quickly and do things that many external parties or viewers would wouldn’t think as possible at all.

Andrew Rocks
I’m just going to reverse a bit. Because even when my personal business was at its largest, we had about 45. Team members, the numbers you’re throwing around are a quite large and and given we’ve had two years of COVID. And you’ve it’s very unlikely you’ve been in the same room is many if not all of these, yeah. How do you how do you manage? How do you manage that scale of of operation? It’s just coming from a black letter cardiac event 15 years ago, we don’t intend on that happening again? No. So what did you put in place to do that? And how do you I mean, just seems like the education that, you know, the main thing I wanted to ask about was how do you run a business at scale without dropping dude?

Tim Farr
Yeah, absolutely. So I was fortunate, the virtual business partners had a good, great platform in terms of, you know, hiring and recruitment and those things. And so as a business within a business, I suppose, you know, that business now is 850 People will grow at another 300 people this year. And that is quite comfortable. In the sense that we want to make sure that advice delivery standards don’t drop, and we’re quite confident we’d be able to do that. In terms of what makes the difference? Well, I think, you know, when I looked back at those experiences, it was largely based on pressures and stress that I placed on myself, I’d actually nothing health, actually physically wrong with me. It was purely my state, my ability to balance load, and also realize a lot of the deadlines I placed out had in my mind are often ones that were self imposed. So in other cases, I just had to let them go, be better at prioritizing, but in terms of how we make that work, there’s a couple pieces or pillars that are absolutely vital. The first one is the right cadence. So, you know, any every business struggles with this, whether you’re 40, as I mentioned, rocks, even 512. And that just gets compounded on those sorts of numbers that we’re talking about. So you really have to double down on on cadence of communication. You know, just

Andrew Rocks
just to be specific, what do you mean by? Yes, so

Tim Farr
these are very, very clean meeting rhythms in the business. So as an end, there’s two elements to cadence. And one of those is operational cadence. So what’s happening in the business? What decisions need to be made? How do you get a decision maker? And how do you get information up and down the sort of the organizational chart, if you like, very quickly, so one of the practices that has always has been an absolute pillar, is the routine of daily huddle. In our business, we have that at every level of our organization. So the issues from the frontline teams get all the way to executive level if needed, but the intent is to solve them at each level along the way, that’s operational cadence. More recently, we’ve been really focused on performance cadence. So okay, that’s what’s not working, what’s needed, what’s broken, what’s needs to be fixed, but also operation, the performance cadence is all about who needs help are people meeting the goals, and in an organization that size, you need to be very clear as to what the goals are, they could be company goals, or, in our case, it’s the client goals. So we know if we align our team members goals to our client goals, then then a lot ultimately provide the the business what it wants. So I’ve always been very much grounded in values based advice. And I believe that principle is applicable a degree of scale. So in other words, we can drive meaningful value for our clients first. And that’s our focus. We know what we’ll get out of it along the way, if we do a good job, a reasonable job of it. So that would be the two of the key pillars. The last one is that goal setting. So you know, and the business outcome goals are really easy. So as an advisor, you might have you know, four appointments a week, two factfinder, three plans, but they’re all outcomes, what I’m talking about specifically, which is a lot harder to define, is those development goals, what is it the person needs in order to hit the outcomes that are that are important for the business. And that’s a skill set that most leaders don’t have. And I’m sure many people would attest that even though they might be in leadership roles themselves. And I sat in a room with some very senior executives across a number of industries. Just recently, there was no really formal pathway to becoming a leader. So you know, how can we create? So what that creates is one problem. People aren’t great at actually focusing on development goals. And secondly, how can we actually deliver a program that creates leaders and builds people to become the very best possible versions of themselves?

Andrew Rocks
And given that predominantly, the financial planning industry, mortgage broking industry is a small to medium size business? What do you see and hear? I’m getting into the picking of your brain? And what do you see people doing really well at that level? And what do you see just Common? Common things that they do poorly that you just pull your hair out? So easily fixed?

Tim Farr
Yeah, absolutely. So a lot of what is happening in the industry is, is governed by regulation. And this is a topic that’s been talked about for a very long time. But you know, I feel that my position on regulation is regulation is, is only helpful if it actually helps people get access to financial advice. So that really should be the litmus test as to whether regulation has been successful or not. And I generally feel that as an industry, and that’s even in by the number of changes of ownership and direction, as to, as to, we haven’t quite got that right yet. But I feel that if we just applied that brush, and that test to those regulations, we’d probably end up at a point that actually achieves the right outcomes, and makes financial advice more accessible to more Australians in some of the ways we talked about similar. So that would be the first point.

Andrew Rocks
And what about the things that you see you’re observing in day to day practices that you just you just wish you could have a time machine and take people back 10 years and fix it? Yeah, I

Tim Farr
guess I What’s great about what we do as a fairly broad churches, we get to solve problems for a range of different sessions, situations remediation, and look back, you know, some fairly challenging situations. But having solved that for one business, and driving driving that as a project means we can take that to other other businesses and say, hey, you know what? You’re not alone. You know, that’s the hardest thing. I think, go look, I’m struggling with this guy. You know what, you’re not the only one. You’re not the first problem. You’re not the last person he’ll struggle with these things. But those who are doing really well. They focus on building their people, rather than being very good practitioners themselves. So I think as soon as you make that mental shift in business ownership to go look, I’m going to create an environment for people to deliver advice, then that’s, that affects every other aspect of decision making you make so Those who are doing well invest in their people, they realize that that they are really the engine to getting the right outcomes. And and make sure that the client experience is is very, very clean.

Andrew Rocks
Typically, what kind of scale? Are those businesses team? Are they? They 100 person businesses? Do they wait to channel? Where do you see that that kicks in?

Tim Farr
Yes, I think that attitude can start from a very early point. But I think the money to you do, yeah, you’re either it’s money, time or people, right? So I think that that can happen. That happens soon as you get a practice manager or someone who’s actually focused on something that’s not operations itself.

Andrew Rocks
And let’s let’s, let’s define what your interpretation of practice manager is, or or general manager, because, you know, from our previous discussions, you’re very firm on this, this is the turning point, in a business going from being a business that that works you to a business that you’ve sort of you own and manage. So what do you define as a practice manager? And what roles do they have? And, and what? What part do they play in a progressive scaling up financial planning business?

Tim Farr
Excellent, great question, Roxy. So I think all of us would easily GLEDE agree to the concepts of a front office as the front of house that seeing clients. It’s engaging in advice, delivery, and also back office, which we’ve touched on before, that’s your ministration support. It’s your power planning function. But the key role we’re talking or key capability we’re talking about, is in fact, a middle office. So in that middle office is really themes of the right technology stack, it’s going to have around, what’s our employee experience? What’s our team engagement? Do we have people who are actually motivated to grow within the business and grow the business as a result of that? It’s around issues of systems and workflows. So how do we create operational excellence in that business? And that the challenge, though, for those practice managers is often they would look around the business and go, you know, what, everyone’s got a job, I can’t drive these, these these improvement projects, because I just don’t have the resources internally. And that’s where some of the solutions we that we have in virtual business partners might be relevant to solve that. But in solving that challenge, but yeah, it’s really that middle office function that’s focused on people technology culture, in in driving businesses, rather than you know, what we often sees client service managers, who were just given the title of practice manager, but haven’t been actually set up for success in that role.

Andrew Rocks
I think that’s, that’s really important, because you’re right. It’s every other business that’s out there, including almost all of our businesses that are successful clients have the most important people in the business of the general managers, the connectors, logistics, the people, managers. And in financial services, quite often an SSH is the role of the head of the operations team or the head of the admin team to step into that, but I just see a real failing in all of them, all of the education streams, all of the development streams in our industry. And just what I mean by that there’s plenty of CPD points for advisors, there’s plenty planners, you know, life insurance companies will run great courses for people in the back office and operations. But this is that that kind of general manager who effectively is running the business of the business, it seems to be a void there. And yet, you’ve just read it, and it is the most important person in the business. So where do you see the industry fixing this?

Tim Farr
Yeah, 100%. So I think at an early stage, you’re gonna have a capacity wall. So you’re gonna run into I just don’t have enough capacity to deliver. But the the next sort of challenge or barrier to break is one around complexity. And so that complexity, so the way people tend to solve this rock CNC question more specifically, is we’re seeing a great deal of mergers and acquisitions across our industry of people that rise to that middle tier of advice business as a means to solve that or to gain access to talent in this middle efforts, office capabilities,

Andrew Rocks
is that being led by licensees is being led by private equity is it just been led by the realization that that profit can only come through scale? What do you see is leading that that consolidation?

Tim Farr
I think it’s all of those things, that it but to be more specific, we’ve got licensees withdrawing from their traditional business models. And also moving which I think, in many cases is great for the industry is to be capital enables able as through the provision of equity, to allow those who are good operators across the network to to achieve that, that consolidation. So I think that’s definitely one part of it. The second part of it is I don’t think, you know, you and I, if we went back to the back, you know, we’ve tried to start again, as a single advisor, be incredibly challenging compared to what it was 1520 years ago. You know, so I think that’s secondly is part of it, it’s just the complexity of it. And then thirdly, ago, maybe you can start but can you scale profitably? And as you said, stay sane all the way? And I’m not sure the answer to that is a resounding yes.

Andrew Rocks
I’m not sure financial planners start saying based on my friends? No, you’re correct. And you mentioned before things he touched on tech spec stack employee experience workflows, operational excellence, given that you’re across literally hundreds of practices, the actual chance, what do you see? And you’ve got to name the names because I know that you are involved in everyone. But what’s what do you see when a tech stack works? And what do you see the common problems when people put together a tech stack? And feel free to shout out or not?

Tim Farr
Yeah, absolutely. So I guess we’re fortunate to have worked for the licensee, as well as the practice. So we have been the delivery engine, in in licenses and some of the facts, some of the mid tier licensees, we are the licensee in terms of the services we provide. So I think the in terms of tech stack, I think the common pitfall that most people run into, is they look for the technology to solve the problem. But often the technology stack is often a black box. It’s something that has to be crafted around your workflows. So instead, you know, let’s start at the right place, and go look, what is it we’re trying to achieve? And specifically is three problem statements that are very clear across the industry. I mean, there’s there’s lots of problems if you read much of the publications and and hence why I’m so aligned to the X Y advisor, value proposition which is all about positive change of advice. I completely agree with that we need to be talking more about it, there needs to be more noise about its opportunity. So when we come to the the three problem statements, the first one is about sales cycle to how long does it take to engage a client through to actually providing advice. And in many cases, when we when we did some research around this, the larger businesses, their sales cycle increased. So sorry, larger businesses increase the amount of time it delivers advice, compared to smaller advice businesses. So that was a really interesting insight, which led us to, you know, I fully understand that, that’s that complexity wall. And that’s to do with the fact you’ve got more people involved in the file. So if you are a follower of Lean principles, lean, it doesn’t take 30 days to produce a piece of financial advice as the sales cycle would suggest it’s not 30 days, if it’s 30 days of time. So where do you target the the periods of time where that falls idle? It’s about getting waste. And so for financial advice, the wastage is idle time when it’s sitting, sitting idle, not doing anything. And it’s also how effective is the handoff handover between each of those roles? Does the next person in the in the operational chain have everything they need to do to move constantly before it? So that’s the first one. Second one is around client experience. And it’s related? It’s obviously related to the sales cycle piece. Because if if it were me experiencing very challenging global markets, clients would often that would be a catalyst to reach out for advice. And they go, Oh, Mr. Advisor, I need to get I need to understand what do I do. And many advisors have to turn around, say, look, it’s going to be 30 days, 60 days before I can actually get back to you with a formal position. And we can execute, that doesn’t create a great client experience is not congruent with with what they would hope to achieve.

Andrew Rocks
When the sky is falling, it generally doesn’t fall progressively over 60 days in a linear fashion. Ah,

Tim Farr
that’s right. And look, if if advisor is anything worth their salt, they would have explained to the client, when you feel like throwing a brick through a window, make sure there’s a check, attach, because that’s exactly the point is should be buying it. So if you’ve done the education piece, that should be less of a problem. But in any case, they will want a timely course correct. So that second one is really around that client experience. How do we improve it? sales cycles have good big component of it. But also coming back to your point about technology? How does technology actually support that client experience? What are the touch points the clients are making with your business? When we we were we kicked off a systems program internally last year, and how we prioritize the things we do is we just we mapped out the client journey. And we went right we’re going to start with any point a client touches our business. That’s the part we’re going to work on first and look to potentially technology to make that experience more scalable and improve it where possible. So that was the second 1/3 one was around the rework. Most of us have we think rework is I get a plan back I need to change that document. That’s not rework for us. Our definition of rework is really around how does that next person device change have to come back to clarify things they’ve received throughout the file? And the other thing is, is how complete is that information around it? So three problem statements to recap, the first is sales cycle. How do you solve it? Obviously if you reduce the sales cycle, you improve the cash flow of the business. Secondly, you’ll also improve the client experience and how do you target that specifically? And then thirdly, it’s around we work rework you know, how do you create Write a really effective handoff handover. And I think you know, that’s that’s something you wrestle with, as you scale. So how do you remove complexity? How do you leverage technology that actually supports

Andrew Rocks
it? Yeah, that all sounds really, really good. But you know, again, we’re sitting here in one room, and all of the people who work for you are all around the world. How do you? How do you know that they’re doing the things that that you want them to do? Like? What’s the oversight?

Tim Farr
Yep. So the first part is, is definitely that cadence. So that’s, you got to know what’s happening. The second part is what data do you have to support it? So you know, for me, I really much leverage and lean on data for any decision making, it’s probably part of my bias as, as some of the occupations that frustrated engineers. So we use things like time camp is one specific example. There’s lots of other technologies around there. But it does autonomous tracking of what users are working with. And also a structured tracking around projects. So a project in the context of financial planning practice might be the client file, or the piece of business you’re working on. But we use those insights and a whole range of different ways. So for example, for our for our teams, we can see what the mix is between different technology across their tech stack. So as an example of that, if we’re seeing a paraplanner, and they’re spending like a day a week in email, well, they’re not having a client facing role. So what why are they why are they in the email. So that will tend to tell us that the the individual doesn’t have a task management system, they haven’t spent a lot of time doing rework, clarification, most likely via email. And that sort of allows us to troubleshoot. Now the really cool thing that can happen is, if we’ve got, you know, in many cases, our team members might be 30% of the headcount for business, you know, in our partially optimized business, so it’s very likely that what the team is experiencing, that we have data around, is also the experience for the rest of the Australian team. It’s

Andrew Rocks
the iceberg, isn’t it? Right? Yeah, absolutely.

Tim Farr
So you know, that data and those insights are incredibly useful to understand, you know, is the tactic tech stack that the business has got? Is it effective? Does the role themselves been set up for success? And it’s very likely that the data we’re able to provide is a good insight into what’s happening across the broader business as well. So we have discussions around those topics fairly regularly.

Andrew Rocks
And so you surely have managed to dodge? Which particular piece of technology you feel works best? Well,

Tim Farr
it’s a bit like I get asked that question quite a lot. You know, is it x plan? Is it Salesforce? And I go look, largely, I think this is really interesting emerging technologies, which I’d be very, very keen in supporting. But I think they’re largely at the risk of probably offending everyone, it can be a bit like, what’s the best bank, I go? Well, they’re all banks, aren’t they? So if for me as an advisor, even if I look back at my experience, if I had logged into x plane, as a, as a principal, it was a bad day, right? Doesn’t matter if x plane or or whatever technology, but at any point, I’m now then on the tools, is not the highest and best use of my time. So if you’re still having advisors who are doing model portfolios, or fund comparisons, or research, or delving into explane, for anything else, that’s not file notes, where their highest best use is seeing clients solving problems securing revenue, will then there’s an opportunity to optimize your business, and consider whether a building a global team is appropriately to achieve.

Andrew Rocks
And I can’t have the answer to this question. But I want to ask it because it’s hilarious. Given the time camp, as you mentioned, can actually show us how many seconds tasks take? There is an internal capability for that, but one of the fun things is it actually highlights which companies put our people on hold the longest? Yes. Right. So these are companies quite often that we are giving investment dollars to or insurance dollars to and and in relation to that, is there anything and this is a great forum, and you could end up being a hero out of this is, is there anything any advice you could give to the product providers? who are providing them? The platforms, the funds, the insurances, etc, on how they engage with with their advice, practices, because and just how wildly different the experiences can be. So maybe touch on that place?

Tim Farr
Yeah, absolutely. So look at time cams as one example. There’s lots of other productivity tools, some of the other data that’s really useful as team engagement. And and there’s a whole range of piece around that if you wanted to explore on that today. But when it comes to the approach the providers are taking, I think we have to go back to and say, look, what is how do we solve the problems for the customer? How do we get more people access to high quality advice that achieves the right outcome? You know, what can they do better? And specifically in those areas we’ve spoken about so in what way provider can help the sales cycle? Well, if if we’re seeing a trend where there’s this they’re consuming so much time on the phone, to get data and insights for part of the advice process or they is one meaningful, tangible way that providers can work towards him having a meaningful impact on that? The the productivity of a particular practice? What can what investment can those providers make into some of those areas I’ve spoken about? Can they lean in with technology? Can they lean in with a training and development, as well, or, you know, make sure we’ve got the right mix of support. You know, as we’ve seen, margin squeezed on licensees, and product providers, a lot of the great people that would often be interacting with your business to talk about these things, even just to be a sounding board have actually been removed. Now, your PDM is your BDMS. And those sorts of things. So how is it that these providers who do have the benefit of scale, you know, work alongside these businesses in some of these areas,

Andrew Rocks
and it’s just frustrating that companies that are, you know, open for business and wanting the financial planning industry to support them? Still are running a half an hour average? Wait time to be spoken to? Yeah, it’s, it’s a real paradox.

Tim Farr
Yeah. And it’s just data. So there’s got to be better ways to gain access to it. So I think, you know, let’s agree on a common set of problem statements. And it’d be great for the participants in the industry to, to focus on them specifically, and then turn to very pragmatic solutions for things that are within our control, because there’s no point shouting at the wind, about regulations, expecting change. Whilst that’s important to be proactive, and lobby, the reality is that any one individual business is not going to be able to make a significant change. So to your point earlier asked questions about who are being successful, I can tell you unequivocally that those see the current environment, market environments as an opportunity, rather than a threat are the ones that are coming out the winners.

Andrew Rocks
And let’s just talk more about the business of the scale of the business as far as so many people. When we’re talking about people and culture, what tools do you recommend? Or what tools are you using to help run that they’re actually working? Because there’s a lot of ones out there that say they can do things? And there’s people out here or pay their SAS contracts and whatnot. But have you got some firm opinions around? What does work?

Tim Farr
Yeah, absolutely. So we implemented our business particular technology called culture amp. There’s a number of different solutions available. But the key point is having a technology that’s actually all about gaining insights about how your people are feeling the general health of the business. The second part is a structured means to do performance reviews. In there’s just as much ambiguity about what a performance review is, just as there is around, you know, the position descriptions of practice managers and power plants love, what’s the scope of those roles. So you know, clear scope, clear goals, clear performance structure. And even in our recent times, we had to circle back and go, you know, what we’d set up originally, or previously, it wasn’t really focused on the human as an individual. So we moved, we intentionally moved away things that included scores, or quantitative metrics, and really focused and double down on goals. So you know, do you have a platform that provides cascading goals, that provides that line of sight? So the thing I do as a power planner, or a financial planner, or a financial planning system, I know directly in what way that moves the result for the client, and are no more moves the result for the business, everyone wants to know, they’re in a job for purpose, right? So if you can provide that line of sight, you know, around those sorts of issues, then technology layers, such as culture app, is provide some really useful tools. But again, it’s how you use it, what’s the purpose of it, just buying another piece of technology expecting to solve your people problem? Is not it you’ve got to have a genuine buy in and commitment from everyone to to, but use these as meaningful insights for data and direction as to where to focus first.

Andrew Rocks
And I think you I think you know, that there people need a purpose. You know, there’s a lot of conversation around, it’s a tight labor market in financial advice, it’s hard to get people working for you. We’ve got the right great net resignation, either happening or about to happen. And I totally agree, I think that the people who work for you regardless of what role they have all wants to know what their effort for that day has done and how it’s helped the client and how they’ve derived utility from it. So, so making that connection is critical,

Tim Farr
particularly for a players. So if you’re looking to have a players in your business, they will want to know how they’re performing. They will want to have structure around what they should be doing and whether they’re hitting the mark. So if you’ve got those people in your business, you’re just going to frustrate them but without having that structure and purpose in place, and you will lose them to someone else who has prepared to invest in those areas

Andrew Rocks
you create. So right now, what’s today hold I’m very interested to know where we are at the present day. How do you run your day and where do you see the future of financial advice? practices. And I want you to be quite detail, Kay? Because question, you’re across a few of them. So yeah, how do you how do you operate your current day? And where do you see the future of practices? Yep.

Tim Farr
So my current present focus is really supporting the team, my version of leadership is one of where I made a serve. So whilst I might have an executive title and executive role, and obviously the decision making that comes with that, my function, my highest and best use is say, How do I enable my team and my people to really be successful in what they’re doing? And so that’s largely part of my focus in terms of my rhythms, that would consist of having that cadence of the morning, you know, having that opportunity where issues from the from the frontline teams would cascade up to, to decision making if needed, and then information gets back down as quickly as possible.

Andrew Rocks
How many levels are we talking here, Tim?

Tim Farr
Probably about four. So it’d be at least four, if not five levels of leadership to to communicate through. Now, there’s a lot more, we can do better. And we focus on that every day. So I just want to give us this opportunity of a couple of shout outs to some of our team members. We’ve got some incredible people across in the Philippines, as our senior leadership team who drive that business, who have overcome incredible adversity and tested BCP to its fullest extent in recent times with the combination of COVID and the typhoon. And also shout out to an incredible Australian leadership team, which is expanding recently across roles of, of relationships, management, quality assurance, and client services support. So we can actually, you know, put people and drop people into business improvement projects, along with our clients, our practices that we work with, or the corporate clients that we have, who can make incredible tangible means leveraging their 1015 years experience at the at the coalface of business improvement with those, those clients.

Andrew Rocks
And with all of that in place, the only missing piece for going forward? Is your your definition of a perfect client. Now, I know that there, that’s that’s sort of might be a bit of a stretch. But what traits do you see of the people who are coming into engage across multiple parts of your business? That that are leading indicators of future success?

Tim Farr
Yes, I think, for us, for us, it’s really about, do we have alignment? So does the business genuinely have the same values that I’ve expressed today, in terms of their people, in terms of solving problems, being prepared to invest in those problems, and also, there’s a degree of vulnerability, I think it’s in needed in any genuine partnership, we go, You know what, we haven’t got this right. And both parties need to be able to say that a time as you wrestle with these different challenges, and then a very clear, open commitment to rally around them in different ways. You know, people, the people, the people, that the business people is messy, and everyone’s in the business of people. So and

Andrew Rocks
I love that comment. Because sometimes I think we like to over plan things. But Mike Tyson used to say, and I’ll probably get this wrong, but everyone has a plan until they get punched in the face. And I feel like that’s how financial planners work, they get up in the morning, they get going, and then there’s an email or a phone call, and they’ve just been punched in the face. Yeah. And

Tim Farr
that’s a great way of describing if you follow Covey at all, that he would talk about the whirlwind, versus the strategic or your wildly important goals. And I think you know, a business has to be intentional about pursuing strategic improvement, and deliberately putting aside the whirlwind distractions for both themselves as senior leaders in the business, but also creating that same structure and rigor for their teams as well. So, you know, our ideal client, or someone who’s, who’s going to benefit from this the most is where you’ve got that some degree of middle office in place, you’ve got some degree of practice management or general manager in a practice business. Specifically, you have realized there is both a capacity and a complexity challenge in the business, you’ve probably leveraged or tried a number of different avenues. Maybe you spent a fortune on technology at some point only just to realize, you know what, it’s just a box. Right? So for us, we’re we’re not we’re very much people plus technology will get the right results. So how do we help support that people strategy or define help you define that people strategy? And then how do we leverage best practice workflows? Because bear in mind VVP is a business has been global teams for eight years, we’ve never had the luxury of being in an office together. So as the world has had to come to grips with how do you do this remote work thing? Like that’s what we’ve had to lead with and craft over a number of years as we built this, this capability for it for the clients across power planning in the financial planning, administration services, and mortgage brokering as well.

Andrew Rocks
And where do you see the financial advice? Landscape moving in the next couple of years? I think we’ve had the difficult times. But yeah, I’d be very interested. Where do you see it in five years? And where do you see your your personal involvement in it?

Tim Farr
So I think the core values of financial planning is really around that topic for literacy. Like how do we provide meaningful financial literacy?

Andrew Rocks
Or can I just go on YouTube or Tik Tok? Or, of course,

Tim Farr
you know, maybe flick? Well, they call it a fin fin flood swab or influencer fin influencers,

Andrew Rocks
potentially have their place. But you need a combination don’t Yeah, absolutely.

Tim Farr
Absolutely. So you know, it’s about scalable advice. So have a look at say, you know, even on the x y model, you know, it’s all about creating the right community, the right forms for connection to occur, even if not in a physical sense. So, you know, how do we create that experience for our for potential clients, the market, the other element of is very much around, I think, largely, we’ve failed in the public eye to create a profession rather than an industry. So I shared an example of accountancy. Previously, that’s very much seen, rightly or wrongly, as being a profession, one of particular standing. Why do you think we found? Well, I think, two parts, I think, regular regulation, without those, that that intent, I mentioned before that litmus test, I think we’ve created liquid legislation that’s hindered the ability to reach the right number of people. And I think secondly, we as an industry have not been incredibly consistent or clear as to the value of advice. I’m sure many advisors if they spoke to their clients would go, and I wasn’t really sure why I came to the door, I knew I needed help. But now I’m here, I just can’t believe that I haven’t spoken to you sooner. The value you create for us the security, the clarity is just incredible. So how do we create that again, on scale, without needing a face to face meeting with 45 minutes to build rapport and articulate that value proposition? So you know, businesses in their own right need to wrestle with that particular challenge. But as an industry, how do we create that really positive articulation of the value that our clients often receive after engagement, but well before that, and I think unless we do that, we’re not going to see people lining up for financial planning courses, we’re not going to see people pursue or, or be able to articulate and be proud of the fact they’re in financial services. I’m incredibly proud of our of our industry. And the profession I’ve had, I know, and I’m confident about the value that I’ve delivered to clients over those years. And I’m very confident in knowing that our clients deliver that same value to our clients. But how do we create that in the minds of the industry, and in many respects, is very few professions that get built around at a parliamentary level, there’s probably maybe only two or three that have had that sort of interaction. So how do we get there? How do we take the right ownership? How do we have those right conversations? And how do we create that education as to the market of what we do? And also the decision makers, because in many cases, if we’re not making the right decisions for the right reasons, we’re not going to get the right outcomes. So can we have a clearer voice? Can we have a consistent voice would be some of the answers at a higher level, Roxy that I’d say,

Andrew Rocks
Thanks, Jim. And it’s I do speak to you regularly. But I did want to get a bit of an articulation of sort of your thoughts and opinions. It’s been a real pleasure today. I know that you’ve probably worked the keenest to start with to come in, but I’ll tease out I’ll tease out some insights and if anyone wants to learn more, there’ll be about TM or what it is that he does, there’s there’s links there in the in the attachments, and they can look him up as well. But Tim, on behalf of of x, y, and the X Y podcast and everyone here and all the people listening, I’d like to thank you for your insights and we should have a good day.

Tim Farr
It’s my pleasure. Thank you rocks

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