August 9, 2022

#332 Steve Nielsen – Transcript

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Ben Nash
Hey guys, Ben Nash from the XY advisor team. And today I’m pumped to be here with Steve Nielsen, Steve and I went on tour with the with the AFA on their roadshow, what seems like a lifetime ago off the back of him taking out their Excellence in Education Award. And obviously, I picked up a few tips on heat off him on the way because I’ve managed to take it out myself a few years later. But Steve runs a business asset wealth management, based out of breeze Vegas is a super guru when it comes to technical stuff. But today, I’m more keen to unpack a bit about the journey around his business and the things that he’s focused on today. Steve, thanks for joining us, mate.

Steve Nielsen
No worries Ben Good to be here. It’s it’s been a little while

Ben Nash
it has been it has been it’s the old COVID spanners, it means less less in interest for you less Brisbane trips for me. So it’s, it’s good to be chatting. And your your business has been going for, you know, bit over 14 years. So clearly some serious, long longevity there. So I’m keen to talk a bit about that, that journey. And maybe that’s a good place to start, if you could just unpack how you ended up where you are today.

Steve Nielsen
No worries at all been, I guess really, I’ve always been back from the 90s was when I first got into advice in a salaried role back in the old days of Suncorp, financial planning, then sort of lowered my learning skills as salaried advisor and then moved into sort of the channel management side looking after a team of advisors in Brisbane. And, you know, within an organization like Suncorp, there were other opportunities to sort of develop skills. So I did some project management became a Six Sigma black belt, which was sort of to work on process and improve things like lead conversions, and just generally work on business problems within that network. And sort of got back into working with self employed advisors as a result of that. And then practice management, both with Suncorp. And then over to MLC, where I was there, doing that, that sort of role till about 2007, then the opportunity came up to buy a practice right before the GFC, which was awesome timing on my part. So I jumped in, jumped in with both boots and bought I bought a practice on the south side of Brisbane. I was I was attracted to this practice, because it actually had been around at that stage for about 25 years. So now we’re close to 40 years of being around with sort of up to three generations of family groups, which, you know, we’re still advising, you know, some of the mums and dads, their kids, and now their kids, which has sort of led to the way we’ve built our business and develop their skills around being really holistic and looking at all different manner of advice needs in that client base. So it’s been a it’s been a journey. And obviously, it’s not only what’s been going on within the business and without in our clients, we’ve also been impacted by the environment we live in, as we all have over particularly over the last four or five years particularly. And, yeah, it has been it has been quite a journey.

Ben Nash
Yeah, absolutely. And the rate of change seems to be accelerating. Although potentially we’re, we’ve gotten through the chunky part of it, although we keep saying that and then keeps on the common. So I suppose I did not know that about the Six Sigma thing, but it probably makes sense as to how you run such an efficient operation. So I’ve done a little bit of study of some of those lean methodologies as part of the some work with our business coach, and yeah, not not fully by the book in terms of Six Sigma stuff, but super effective in terms of that approach and dislike, what’s the most important thing? How do you get there? And I think as you mentioned, with all the change that’s going on, we need to be flexible as we’re rolling stuff out to make sure that it fits with, you know how the world is at that time. What do your clients you mentioned three generations, obviously, there’s a bit of a spread there, but what is the what are your typical clients look like and what do you do for them and what does your team look like?

Steve Nielsen
So I guess the sweet spot, and it’s probably something that is no secret to most advisors is, you know, the sweet spot are clients that are, you know, five years older and five years younger in a lot of ways. So, for me, being in my early 50s, it’s pre and post retirement, more pre at this stage. But it’s really building wealth for people that are starting to free themselves of the shackles of debt. And, you know, kids are probably not costing as much in their upkeep and starting to leave home. And just that final run into retirement to make sure that positions are optimized. And then we’re basically on a good path towards achieving all of those, those goals and projectors, you know, financial and non financial, for, for people as they become, you know, coming into retirement. I guess there’s some empathy on my part, obviously, not that I’m retiring anytime soon. But I certainly have the impacts that a number of my clients are facing, as we sort of entered this stage of life, particularly in that most of us, you know, still have some responsibility for, you know, teenage late teenage children. And at the same time, we’re starting to do more for our parents who are getting into that, that elderly, frailty, sort of generation, and, you know, so I guess some of the advice needs that come through, you know, you know, sitting sort of contingent to that particular group that we do most of our work with, you know, the, starting off the kids, as they’re starting to make their way in the world. And then, at the same time, I, I myself, have built some expertise in aged care, having advised a number of our clients parents in on their transition to, you know, the retirement village world, or even at the later stages into an aged care facility. So, you know, Gavin Gavin in the business will sort of be more involved in the starting that starting the journey, and building, building a future as far as wealth management goes for the kids as they’re starting in their working life. And I’m probably more at the other end, at the aged care piece, you know, becoming more and more a focus of the other stuff we do.

Ben Nash
Well, I can speak from personal experience there that I know that you’re the guru of that stuff. And for me, that’s just so complicated that it’s it’s been too hard basket for for some time. And it’s not the sort of thing that you want to, you know, get wrong or get mixed up with, you only really get one crack at it. So really critical. How did you just on that one, how did you go about building that knowledge?

Steve Nielsen
It was a fair bit of study and research. You know, I worked alongside the aged care steps, group, Louise Beatty and her business to get some some knowledge. And my licensee also had a fair bit of support in that area as well. It’s quite sad really, though, because I’m, I went and had a look at a local aged care facility that’s just opening in our local neighborhood. On the weekend. I like to go and have a look where our clients might end up, mine ended up looking for places and we were touring around this facility and they took us to this, this double room and they’ve got a few of these double rooms in the in the building and they you know, so mum and dad can move in there together. And everybody’s saying, Oh, it’s a lovely room. It’s a big, it’s a big studio room with a seating area and all of that sort of thing and quite a bit quite a different thing to what aged care facilities have been in the past. And all I could think about was mum and dad going in together. That’d be too refundable accommodation deposits. Just think of the money in so I’ve been, I’ve been sort of talking about this far too much. In that’s what I’m thinking of with this beautiful facility and I’m thinking about the money.

Ben Nash
Well, look, it’s it’s not everything, but it’s not nothing either. So,

Steve Nielsen
absolutely.

Ben Nash
Save your business. As I said he been you’ve been at it in your business for 14 years. And you mentioned there’s been 25 years of history prior to that. Yeah. What have been the big sort of shifts over that over the time that you’ve been involved in, in the business, and how did you tackle bringing the business slowly into the future,

Steve Nielsen
I guess when I, when I jumped out of employment, and bought the business, the concepts of professionalism, and increasing education standards, and, and you know, how we actually charged for our services, we’re sort of starting to be whispered about, you know, like, our commissions appropriate, you know, our entry fee products, you know, where we see ourselves going in the future. And I guess over time, and you know, I’m talking 2008, coming through the GFC. That whisper sort of started to grow in, in loudness and, and then we had, you know, FOFA come along. And it was pretty clear that what we had thought about as just being best practice was actually going to be the rules of the game going forward. So I guess in the way my business has evolved, we moved into a practice that had as its charging methodology, a, taking the trailing commission on investments and superannuation, which was payable at that time, and then a cocktail arrangement where we were the previous owner would pay like an advice fee to bring the fee up to an acceptable level for the work done. So my, my move into the practice pretty much immediately was to start by rebating trailing commission and just charging a fee, based on the time taken to prepare and deliver the advice as well as its value to better reflect the work that we did. And it sort of stood us in good stead. As the years went by. Particularly, in that the licensee I was with went through an advice remediation process, which coincidentally started in 2009. By the time that pretty much all of our clients are across on the full fee basis as opposed to commissions. So when you when you calculate refunding, the licensee took the decision to refund fees, that had been charged a percentage of the fees that have been charged, rather than going through the process of looking at every single file and made a decision to refund a percentage of everybody’s fees. So we maximize the outcome for our clients, because we rebated trailing commission and converted them all to fees. And consequently, their outcome when that refund went through was significantly better than what it otherwise would have been so, right. So it was a nice byproduct. But it was also the right thing to do by the clients at the time, set us up well for Firefox. And I guess as time has gone by the natural extension of faux fur, I guess, has been the Code of Ethics developing around some of the key concepts that come out of FOFA. And I think it’s, it’s, you know, unfortunately, it’s the challenge that we have as financial planners today, it’s not necessarily that a code of ethics is a bad thing, it’s just that there isn’t tangible measures on which to manage or assess performance. We basically you know, doing right by clients, but if someone else has perception is not quite the same as yours. There needs to be some some discrepancy there. And that’s I guess, the confusion that that I guess everybody’s facing but all in all, the practices remained probably as a result of licensees always striving to be at that higher level just to make sure that they were right, right above any line that was what was drawn rate on the regulation side of things. We ourselves as advisors in that network have have been sort of following that which has stood us in pretty good stead I think

Ben Nash
you mentioned you mentioned mobile chatting just before about the quality of advice review and what you’ve just mentioned there about you know, ethics and the the ambiguity around the interpretation of those rules. I know that you you love all of that sort of you know super detailed stuff and and get you know, get pretty involved in the advice. Industry more broadly. What’s your take on on where things are headed from here?

Steve Nielsen
I think we got a good opportunity. There have been an a, you know, probably a bit boring. And then I’ve read a few submissions. And I’ve made, you know, made contributions to a few, a few submissions as well, for, you know, indeed, professional associations that I’m I’m a part of. But I think we have a good opportunity to sort of inform the regulator’s or the regulators through this review, that, you know, of the roadblocks, I guess, to providing good quality advice. It’s in the best interests of clients. One of the things that I saw recently was, you know, the, the review itself has been a little bit shocked, I guess, about the fear that’s out there that advisors have for the regulator’s. So I see that the I see that the submissions are doing a fair job of conveying why that fear is, is in place, you know, it’s that ambiguity, it’s, as I said, that there would be a role for a reduction in the complexity, that would certainly help client outcomes. We’re talking, you know, about making sure that advisors have more confidence and are more comfortable, providing more focused support and advice to clients. And it doesn’t necessarily mean that we’re adding 20 pages to a statement of advice, we might take 20 pages off a statement of advice, and be able to convert convey a clear message, and clear intent, which I think is ultimately where we’re heading. So the quality of advice review, I think, presents us with a great opportunity. I just hope that the the AirPlay that it deserves, is is continued, and we actually see some tangible change as a result of of those submissions.

Ben Nash
Well, I think it sounds like from from what I’ve read that at least, ASIC seem to be fairly clear on where like, broadly what the issues are, when you talk about, like the complexity of advice, and yeah, the length that of advice and density relative to our clients, you know, want or desire, or understanding of, of that stuff. So yeah, fingers crossed, I’d love to, I’d love to see a shorter SLA with streamline and the important thing, so as you say that we can be doing the right thing by clients, but have it clear and efficient and easy and sort of bring down some of those costs or serve to make things accessible to more people.

Steve Nielsen
I think some of the tech can help us as well as your you’d be, you’d be right across span, you know that there’s some, there’s some solutions there where advice can be delivered in, in presentation format, if you like. And if it’s if it’s delivered, sort of electronically, potentially, there are measures within that software that can confirm help a client indicate the confirmation of the material that they’ve that they’ve been presented with, enhance, have a better informed client and a more engaged interaction with the advisor. So and it’s not going to be for everybody. And I mean, from my perspective, there will be a hardcore group of our clients that will still be traditional paper based advice going forward. But there are certainly technological innovations which which make it a lot a lot better and a lot more cogent for clients to work to be a part of that journey. So here’s hoping

Ben Nash
we can we’ll keep both of our fingers crossed on that. See, what you mentioned there some of the things that have shifted in your business, what are the things that haven’t changed for you?

Steve Nielsen
I think you know, when we’re talking about a number of generations and client relationships, I think that’s going to be a sort of a bedrock in the business and certainly the way that we engage with the clients that have been clients for a long time probably hasn’t changed that much I you know, face to face and being being part of that community group ourselves, you know, like it was just got went to a you know, a recent you know, I’ve been funerals and you know, the celebration of life for clients that have passed away. baptisms, a lot of the the personal interaction I think that’s Uh, that certainly whether that be, you know, on that face to face basis or whether, you know, we have more of a, you know, an electronic sort of interaction, you know, we’ve got clients that we, you know, haven’t met face to face even that it’s pretty much teams zoom DocuSign all of the technological means. So it’s I think the thing that hasn’t changed mainly in the business is that we continue to meet clients, where they live in a lot of ways, whether that be electronically or face to face in those groups. And the other thing is, obviously, the world is a changing place. And we try to just be open to all of the things that are happening out there in the world, and keep ourselves educated, keep ourselves across developments in technology in, in strategy. And I think these days, that becomes a difficult thing to do. But it’s a worthy investment that needs to be continued for all of us, I guess. So. You know, that’s, that’s where we are with that, I suppose. Yeah,

Ben Nash
look, I think is, as advice evolves, and some of the more basic elements of what we do, are able to be partly done, at least through technology, then I feel like we are really, that the main reason that people seek out and value they get from advice is that, you know, being at the center of everything in knowing how to cut through some of that noise to figure out what the things are that people do actually need to know. Yeah, as you say, not an easy job. But, but a crucial one, I think, and probably more crucial as that continues into the future.

Steve Nielsen
And I really value my involvement in the XY community, because there’s so many good ideas out there that, that really inform my practice. And, you know, I’m hoping that, you know, there is some of the stuff that that I can bring to the table is helpful as well. But part of being part of communities is just everything, I think, for us at the moment.

Ben Nash
Well, I think to that, you know, cutting through the noise piece, that there’s a lot of minds that are seeing different things. So getting some of those ideas out there to help us figure out what what we should be. Yeah, you know, thinking is really crucial. Steve, what are you working on at the moment in your business.

Steve Nielsen
So we’ve been grappling with increasing workloads, we’ve been sort of, you know, not a massive growth business. But we’ve certainly built some relationships with accounting practices, particularly around an area of expertise in self managed super funds. We’re accountants not having the exemption, who knows what’s going to happen after out of their quality of advice review, there’s been some arguments for accountants to sort of have get some of that sort of ability to talk to self managed super funds back not sure as to how that’s going to land. But given given that relationship, we’ve been picking up a few new funds to sort of provide some more of the technical advice to both investments and strategy. So the practice has gotten busier. At the moment, we’ve got one sort of admin manager, and, you know, she works remotely and comes to Brisbane, once a week, we, we compare notes, we plan the week ahead, and in work together, remotely, but also we’re also face to face. The other advisor, my practice, you know, both he and I sort of work from an office in Brisbane, but we sort of are out seeing clients as well. So back and forth. The thing is, looking for that next level of support, you know, potentially considering whether that person sits in our office with us in Brisbane, so we have a person on the ground in Brisbane the whole time, or whether in fact, we can manage the manage the geography by maybe having an overseas outsourcing solution. And you know, that’s that’s the big thing that I’m working on at the moment is to just make that choice. And I’m, I’m sort of attracted to the ability for overseas outsourcing to be scalable so that you necessarily don’t need to go all boots and all on day one, you can actually just build into your process and your practice the skills and resources that you need at a particular time. And, you know, the knowledge of financial planning and the experience with other financial planners, I guess gives me a lot more confidence in the knowledge and experience of these providers. to sort of add some meaningful support to our world. So we’re, you know, actively actively pursuing that at the moment of sort of ticked that licensee box. And now we’re, you’re looking at what might be a solution for us there.

Ben Nash
Yeah, for us, we’ve been on this journey as I was chatting to you, just before we fired up the recording, but for some time, and I’ve tried a couple of times, with offshore team members, once through a BPO, once through a work from home type arrangement, and both times they didn’t work, probably a large part because of how we sort of, you know, onboard them in the work, but also partly because of the the individuals that we chose and the roles that we’re looking at at that time. But for us, we’ve had a great experience for the last three years with with offshoring, like, like I think any team members there, or you know, any team that there are challenges with that, and things that you need to do and learnings that you need to have around that, but we’ve got a, we’ve got nine, also in the Philippines at the minute and those guys great technical, you know, we’ve got our power planning team, their implementation team, and then some admin, and marketing support there as well. And for those guys, I find that just a pure extension of our Sydney team, cost effective, you know, relative to the cost of getting someone on ground, but also that we’ve just like with our power planners, we just really struggled to get good paraplanners here, and then we’ve hired Associates, and they want to learn how to be advisors, and they don’t want to necessarily be tied up with a bunch of admin and, and plans as well. So it’s partly just to do you know, job person fit as much as anything as well, but our recent learnings have been that they’re sort of only choosing good people is obviously important. And that’s why for us, we’ve got a BPO that has a very strong recruitment. Which I think is really important to find great people to begin with, but then if the more you put in, in terms of their onboarding, training and development, then the more more you can take away. So I think it’s definitely the future particularly in light of the skill shortage, but like the just the challenges around hiring and advice at the moment, that big population, people that are super keen to learn and switched on. So

Steve Nielsen
they’re really good insights, you know, and it’s, it’s, it’s a lot like, it’s the issues, you know, a lot of them are consistent with, you know, the face to face hire and development of staff, you know, we’ve had our own heart, we’ve had our own horror stories, as I’ve told you, you know, and, you know, I, I sort of think the time is right, to sort of try something new, and the scalability of it really, you know, impresses me and, as I said, you know, the Pathfinders have been out there, like yourself and have built, build those skills in a lot of ways, and there’s other providers as well. But, ya know, I think the time is right to go down that path for us as the next step.

Ben Nash
exciting, exciting times ahead. I think it’s all that stuff like it’s it’s a whole skill set and and function that you need to build into your business with recruiting, hiring, onboarding, training, development, management, like it’s I think sometimes you just get lucky and we have been in the past, you just find great people and even when you don’t know what you’re doing, and it just works, because it works, but not it doesn’t work because you make like you made it work. So I think it’s the Yeah, it’s just a skill, but a valuable one, if you can crack the crack the code, or at least a crack at it enough to make it work. Save my my last question for you, if you could, if you could go back to your you know, bright eyed bushy tailed self 14 years ago, when you were, you know, buying into that business and, and rolling down the shingle or republishing the shingle in your case. And give yourself one piece of advice. What would it be?

Steve Nielsen
That’s a interesting question. I think really, probably. And it may have been a may have been a product of just what time it was, you know, we basically have just started the roll down in the GFC. We’re sort of halfway through the reduction in asset values and panic was sort of running pretty high. And I guess really, the only, you know, the advice that I’d probably go back and give myself was, just believe in yourself and And, you know, I understand that you’re coming to this from a background of, of experience of down markets over, you know, a number of previous occasions. And, you know, this too shall pass. We obviously got through, but certainly, I probably worried about a lot more than what I really needed to, in that, you know, I was paranoid about making the business work and making it profitable. And, obviously, going into it with some level of, you know, financial stress as you as you’ve never borrowed that much money before. But if I could go back and tell myself just to calm down and take a chill pill, just rely, rely on your rely on you your skills and experience more and believe in yourself. I think that’s probably the biggest thing. And I’d say that to anybody. It was mulling a decision like that. It’s just you’ve done the you’ve done the work, you wouldn’t be considering this sort of thing if you weren’t prepared to do it. So just believe in yourself and do it

Ben Nash
and take a chill pill. I like that and take a chill pill.

Steve Nielsen
Exactly. Bring it bring it bring it back the the 80s and 90s into conversation that’s that’s a chill pill. I’m more the X of the X Y

Ben Nash
automate. Well, thank you so much for sharing your story. Really appreciate it. Exciting times ahead.

Steve Nielsen
Great Ben. Thanks for the opportunity. It’s always good to talk to you.

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