September 27, 2022

#346 Martin McGrath – Transcript

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Ben Nash
Hey guys, Ben Nash from the XY advisor team and today I’m here with Martin McGrath. Martin is a chartered accountant and Principal Financial Advisor at financial edge group. They’re based on the central coast of New South Wales. Martin’s been recognized for his awesome work in the industry. But last year was took out the ifas practice principle of the year. So I’m keen to pick Martin’s brain on, you know, what’s going on in his business and what’s driving the growth. Martin, thanks for joining us, mate.

Martin McGrath
Perfect, Ben, happy to.

Ben Nash
Mate, I thought a good place to start just for everyone listening along. Can you step us through your journey into advice and how you’ve ended up where you are today?

Martin McGrath
Yeah, perfect. So I’ve been in industry for about 20 years started as an accountant, we’re going to accounting firm that did a little bit of financial planning on the side, realized I actually really enjoyed the financial planning side more than the accounting, believe it or not, and so stayed in and focused in that area. So I ended up finishing my accounting studies getting a degree becoming a chartered accountant, but kind of always had that passion for the financial planning side. And so it kind of took a couple of roles that kept me in that space. And then about seven years ago, I started my own business, and started doing both because I didn’t buy a book or anything to started fresh and build from the ground up. So offered both services, accounting and financial planning. And then about three years ago, decided that for my business, and the way the industry in the world was going is better to pick one or the other. So even though financial planning was only about 20% of my revenue, decided that that was the area that I wanted to focus on. Solid off the accounting side and has grown a financial planning business from there.

Ben Nash
Yeah, nice. And you mentioned starting from scratch in the early days, what was what was that? Like? What did you do? How did you tackle things?

Martin McGrath
So new was on the rise. And the place I was working at approached me and asked if I wanted to buy in, and I said, thanks. But No thanks, I want to do my own thing. And so kind of forced me to jump a little bit as well as kind of being pushed, but that really good about it actually goes to Bogwood contract and do a bit of work for them as I transition across the basically just over Christmas period, set up a website, set up a Facebook page and started from scratch, with no clients and ongoing revenue, and grew from there and probably took about something went through various stages, to try and make enough to pay for an office space make enough to put food on the table, etc. And it grew pretty quick to the point where I told them, I didn’t have time to contract back to them anymore. And then continue to grow from there to get some office space start to bring on a staff member and grow the business to where it is today.

Ben Nash
Nice. And where did you clients come from in the early days.

Martin McGrath
Yeah, that was kind of a little bit daunting and scary. But basically, through friends and family is starting out. And then it kind of referrals from there. So had a big pull marketing plan of joining different referral groups and making a name in the community, all that kind of stuff. But to started talking to some kind of friends, I knew that businesses, they knew that I did financial planning, their mom and dad wanted to retire come and talk to me need some life insurance, got married, got a kid bought a house, all that kind of stuff, because we offered a bit everything. And so it meant that that diversity client would come in and we could offer in service sort of thing for them. And then kind of that built a base where I started getting people that I didn’t know where they come from, I ever heard about good news from this person who’s been working for a while or whatever, and and then God actually got people from the public and Google reviews and all that kind of stuff. And then a couple of years ago, focused on really building that presence, to have done plenty of videos and education, etc. That, that we’re getting inquiries from everywhere now.

Ben Nash
It’s great to see made and I think it’s for a lot of people in the XY community. You know, starting starting out is always the scariest part I know for me is the same as well that I knew advice on how to be an advisor, but that getting the clients and getting that early momentum is is scary. But thankfully, when you’re in the very early days, you don’t need a lot of clients to, you know, like you say put food on the table. And then you do good work in it. And it just grows from there. So it’s great to see what have been some of the biggest shifts for you over the seven years that you’ve been in business.

Martin McGrath
Yeah, and probably some themes. I hinted that through there so basically opened the doors and offered everything to everybody. So if someone wanted a tax return done for $150 I do that if someone wanted a life insurance policy in place and a commission only basis and I got $550 did all the work in the SOA for that to full blown retirement planning to people setting up businesses and companies and GST and all that kind of stuff which I had the skill set to be a coach also all of that, but realized very quickly that I was spreading myself very thin, to try and offer all to everyone. And so going to go, oh, there was one here, let me get some staff to help me do all this and continue to grow. And once I hit a certain revenue market, everything would be fine and the business would be looking out for itself, etc. But then still, I remember a day that was a very diverse day, I think I helped someone get an income protection policy in the morning, and two hours later, help someone else apply for Centrelink, then help someone set up a family trust and taught them how to use Xero and do badges. And then add an international GST question light in the same afternoon that took an hour and a half of research to figure out. And while that was a very diverse day, and enjoyable, kind of went, Okay was hard to build a system, it’s hard to train staff, and we’ve got such a variety of offerings being made. And so through that kind of learning. So to work around, okay, well, I need to do things a bit different work a bit smarter, about the same time I started working with business coaches, and to kind of continue reading listening to podcasts, reading books, decided that I needed to try and streamline a little bit, and then kind of figure out where my passion lies and did a bit of soul searching and speak to some other mentors and, and kind of made that focus that financial planning is where I wanted to be. And that took up every few months to come to that decision, and then a few months more to figure out what that process was going to look like. And then the plan was to sell the accounting side of the business that was big enough that it was it needed to be looked after, it wasn’t just to send three or four clients away it was it was to be sold and handed over. So figure out who was going to do that within that person, I sold the business to as a key refer and now for our financial planning. So it was a bit of a partnership in that space, worked through the process to hand that off. And then as part of that redesign, okay, well, if I’m going to remove a large chunk about business, I want to replace that. And then who do I want to replace it with? What is our ideal client look like? And then focused on building things and systems in that space is who we want to attract? What do they look like? Where do they hang out? What do they need, and then making sure that we could attract them and service them. And that really helps a business grow from what was just myself in a little office with no support staff at the start to now we’re a team of eight, and then looking to continue to grow on the Central Coast.

Ben Nash
And what was the impact of that of that change? Like did it did it happen quickly? Did clients like did you get cut through with clients quickly?

Martin McGrath
Yeah, for sure. Like, I mean, it seems quick now. And at the time, it was still relatively quick, I think it was daunting. Because, as I mentioned, the accounting side was 70 75% of the business to remove that and go, Okay, we’ll need to replace that. But looking at the numbers, we replaced that easily within 12 months, from the financial planning side. And I think it just happened quickly, but organically, we kind of as it was transitioning out, it started to slow back in because that accounting, handover still took the better part of six or nine months. And as that kind of was on its way out. We had in one inquiry one week and then to the next week, and then it continued to grow momentum from there to the point that I looked back and went Hold on, how did had I try and do all that while I was doing this at the same time. And if I didn’t make that decision beforehand, I would have been forced to make that decision well before now anyway, so better good luck, good, very good planning, to kind of help that happen. And see the impact meant that financially, we’re in a better, stronger position, the business has a larger size, but also just, I think we’re providing a much better product and service to the client, because we’re focusing on one area, our systems are designed for people in that area, our time and expertise and training is all focusing in that one area. I’m not having to worry and be across all the different changes happening in in different industries, accounting and financial planning, but also within financial planning. We don’t do any insurance anymore, so I don’t need to be. Well, I like to be across some of the changes. But the finer detail of which product provider is better on this new income protection policy. That’s not what expertise is. Now, I’ll refer that out to someone who specializes in that space as well.

Ben Nash
Yes, fine for us that when you specialize in working with one type of client that you become an expert in their problems pretty quickly because you’re constantly seeing all of the different things that the opportunities, the good and the bad, where things can go wrong, and then you can stop people from, you know, falling into some of those common pitfalls. Whereas as you say, when you’re dealing with different different types of people all the time, then you’d sort of need to be a bit more surface level and you’re not getting the same volume of exposure there as well. So I think it’s good. From a business perspective, it’s also good for the clients, as you say, that allows you to deliver a better service for those for those people as well. Mark, what are the biggest challenges for you, I was gonna say, like, what would have been the biggest challenges for you on that journey?

Martin McGrath
I mean, various lights, that one was coming in making that decision, it’s not an easy decision to make when I built that business or build that nest egg to decide to depart from that. But it was kind of sunken cost theory or something time to the year should have taken a lot of time to build that. But it was more about where I was going and what the future look like. And that was not baggage that I was not that it was baggage by itself. But it was going to be a distraction to hold on to that. Even I had some conversations with clients and went Okay, so that’s fine. But like were the exception? Well, you definitely indicate that she definitely didn’t like Well, well, no, because it doesn’t, that’s not fair to you, but also not fair to the other clients I want to focus on. So that was a big decision from there, making sure that I could entrust another provider, another kind of professional look after that. And not just that accounting side of the business, but also when we decided that we’re not doing insurance, making sure that I was gonna refer friends and family to some other professional knowing that I had a high level of confidence in what they were going to provide as well. And I think we’re all smart enough to know, but it’s still hard to go well no, I can do a better job than someone else, or I’m not sure I can trust this with someone else, I don’t know exactly who they are. So it’s important to take the time to make those decisions about who you’re partnering in and who you’re trusting with if you are going to refer existing clients away or whatever that looks like that they’re being looked after. Because that means you can do that with more confidence and not make exceptions around on hey, we can still do that you can be we can still do that offering for you, you’ve got to be fair yourself and fair to those clients. And then as a result of that has meant that we’ve had a lot more business growth and potentially I’d planned when I set out five or seven years ago the plan was to have a little business as be self employed, get some income but kind of work for myself, I still do work for myself as the the owner of the business but to the point now where we’ve got staff we’ve gotten advisors in the business, what comes with that is business of a certain size need systems and processes, we need support, labor, need HR, we need payroll, all that kind of stuff that I didn’t need at the start because it was just myself or myself on one staff member so there are challenges that come with challenges that are worthwhile and rewarding and setting that foundation for many years to come.

Ben Nash
Totally I think if you’re anything like me they appeal when you start a business you think oh yeah, I’ll start a business and then I can work from anywhere and be flexible and I can just you know have the lifestyle and and be great and then you push hard because you want to get some growth and you want to make sure that it’s a success and then things start growing and then you realize it comes with a different like you say layer of challenges you’ve got all the team things the stuff that you know occupies your your bandwidth as well and the quarry you I just was talking to Corey, Walsall on the podcast a while back and I still read about one of the things that was frustrating me at that point in time. And he’s like, Yeah, but he goes, but that’s the the obstacle is the way it’s like that’s the fun part of doing it as well. So this is a challenge. But the good challenges to have.

Martin McGrath
Yeah, for sure. And I think even on that there was I was catching I was being humble before and talking about a shift in mindset. I was at a PD day earlier in the year and some was speaking talking about that business growth and that shift in mindset, different type of business that they were talking about. No longer they wake up thinking about some of their client problems or what to fix with their clients. They wake up thinking about the systems and the processes they want to improve for their business. And that mind shift has changed in terms of yes, I’m definitely more focused on our clients are looking out for many of our clients and the Principal Advisor for our clients, but getting excited as much about what’s the new software technology and efficient way to do this process that’s documented so that we can replicate it and help many more clients and people in the future in the business kind of thing. And so it’s not just that fixing the client problem, but also being sited about that systems and processes as well along the way.

Ben Nash
Absolutely. As a process not with you on that one. Martin, you mentioned should that transition from you being basically the only person in the business to then bring on a team and then particularly with bringing on advisors into the business. How How have you tackled that, obviously it’s a bit of a challenge with transitioning relationships and as being the, you know, going from the principal, were you the only advisor in the business? How have you found that?

Martin McGrath
Yeah, definitely. And that is another challenge. But now the exciting thing. The business has grown to the point now and the path we’re on. And given, it’s hard to get advisors, it’s myself and two other advisors in the business at the moment. And that’s the building for where we’re going. And where I still say relatively new in that process that they’re coming up to two year and two years with different advisors in the business. And it’s going really well, I’m really excited about what we’ve done so far, and equally excited about where we’re going. But it definitely comes with challenges because it was even to the point that or the website just spoke about mine or templates spoke about mom and your advisor Martin to the point where that’s now changed and templated to be generalized to talk thing about your insert adviser name here. And that’s appropriate by itself. It’s bringing those advisors into our business, and doing things our way, we’ve invested a lot of time and effort into our expertise and systems. And I’m very proud of what we’ve created there. And everyone’s got their own personality, and we want to help them grow within that system. But the way we onboard clients, the way we look, after clients, our ongoing service arrangement, how we serve our clients is very specialized and focused and client focused, and to making sure that they’re across all of that. And in the way that why preferred to do that for our businesses, is not hire someone who’s got 20 years under their belt and ready to go and wants to be in front of hundreds of clients and converting and look doing all that kind of stuff is, is the broadening client advisors who are technically orientated, one of the advisors, etc, that have kind of come through that associated visor, my right hand person type of thing. So very kind of subtle approach where they’ve done a lot of the face shadow advisor, associate advisor type of work over the last few and a bit, where there’s kind of helpful the strategy stuff, do the technical stuff, be in front of the clients speak in front of the clients, that for the first period of time, my name is still in the SOA, the clients would generally say that Martin or the team is my financial advisor, to help them build that confidence and trust and process in our business, in that space. And, and we’re at the point now where they’re getting to a level where they want to continue to grow and and want them to continue to grow. And so we’re going to do that in a few different ways where they’re going to take on a lot on a lot of the new clients coming in, there may be the benefit, we haven’t figured this all out yet of transitioning some of I suppose my clients in inverted commas across to them where they’ve worked with the client. Now for two years, the client knows who they are, or vice versa. And there may be a nice transition to have. And or through acquisition and bringing on more clients. That way that they can be assigned to those advisors in that space. So it’s a it’s a worthwhile process. I think it’s yes, we’re an advice business. But but really, there were a relationship business. And you want to look after clients in that case that the client, yes, they’re working with the business that doesn’t want to be handed down to a new advisor every year, they want to make sure the advisor they’re working with is looking out for them knows the situation knows the technical stuff, but also, they can have a chat with and and know that history in that respect. So we’re doing that gently and slowly. And it may be that I may still be the face and be in some of those meetings, but not really look at the client behind the scenes, because we’ve got other advisors who can do that.

Ben Nash
Yeah, I’ve found for us that and I’ve had this conversation with a number of clients that I’ve looked after, in the past that as your business grows, it’s sort of you have an increasing level as we’re talking about different things that are occupying and requiring your attention to support the team and the business in the best way. And it means that your attention is split. So I think you do sort of reach out I found for me that you reach a tipping point where it’s actually better for one of the other advisors to be the advisor for the clients because it means that the client is their sole focus, and then they benefit from that focus more than someone that’s needing to deal with that, you know, HR process that needs to happen or that process that needs to be tinkered with or that tech solution that needs to happen as well. And I think that people is, as you say, it’s definitely a relationship business, not easy. And it’s really important that any sort of transition is managed really well. But the thing people ultimately pretty reasonable and understand that at least I’ve found from from my experience and recognize that they do have that potential. They know that they can always talk to me like I’m sure your clients could always talk to you if there was a need for them or a real desire for them to do that. But then they’re benefiting from sole focus of having a dedicated advisor as well ultimately ends up being a good thing. As much as we’re fearful of it. When it when it is happening as well.

Martin McGrath
Yeah, for sure.

Ben Nash
Um, you mentioned some of the changes there. What are some of the things though that haven’t changed for you guys?

Martin McGrath
Yeah, that’s a good question. And may it’s may be hard to, to self reflect upon that. And I don’t have anyone here to ask that question too. But I think for us to find the, the heart of the business or the core values of the business. One of the big feedback or big focus bits I got back at the start, when I started the business was, we are plain English, very try to keep things simple, not overcomplicate stuff, we’re big believers in education, the more you understand something, the more you can have trust and believe in it. And that’s from the start of the business through to now. So when our client process on our client journey, we get the clients involved. Yes, they’re paying for us for expertise. But it’s not smoke and mirrors, it’s not okay, he gives the information will go away and come back to you with this fancy little document that’s going to solve your life, we’ve been clients along the way and take them through that process to empower them. So that we’re making those decisions together. In that process, and I think within that I’ve been doing now for probably coming up to three or four years, regular videos and education and a nominal learning space, yourself or many other advisors that we get a really a lot of positive feedback from clients about that, talking about simple topics, or just reiterating things, ideas that are general, because if a client comes in if it’s a new client, particularly, but even when it’s existing clients, or maybe worked with us for five years, we’re in a meeting, we talk about some concepts, hey, you now are eligible, the single the downside of contribution is what it is. But then we’ve got a four minute or a six minute video talking about that as a generic level that we can send to them in our follow up paperwork, that a week later, they can go back and look at that again, because they might not have been able to take it all at the same time. So having that kind of material that people can come back to it’s for evergreen we can share with clients, across the board prospects and new and existing clients is a big piece of that. And we get that feedback from clients is that one of the reasons I like working to it is because that they can understand what’s going on. It’s not just technical spreadsheets and boring numbers, which a lot of what we do can be in some regard. Yeah,

Ben Nash
totally. And I think you’re bang on there that there’s a lot to take in when you’re doing any sort of financial planning, whether it’s a brand new client or someone going through a review or someone that you’ve been there has been client for a number of years, they can only take in so much at once like weekend, if you’re learning something new, as well, that I found those resources incredibly helpful that people can refer back. And I think that ondemand style of of education around advice is, is a real value add for the people, as you say ultimately giving them more confidence in in what they’re doing and the decisions that they have made as well. Martin, what what’s coming up for you guys, what are you guys focused on at the moment.

Martin McGrath
So I mean, like planning advisors, there’s, there’s plenty happening in the world, in our business in particular, that, that continual growth of the advisors is a big focus for us over the next four months. And as part of that, we’ll have to come up to seven years and certain milestones for the business. And we haven’t acquired any business, or any business or any clients yet. But we but we will be doing so in this next period of time. And so that’s a new challenge for us as a business. It’s an exciting challenge. We’ve grown organically to this point. But there’s a kind of a large opportunity that makes a lot of sense to us on the horizon to kind of not partner that kind of work closely with an accounting firm, we’ve got a lot of clients that they want us to look after for them, which which will be classed as an acquisition. And part of that for financial planning clients. So that’s, that’s a big challenge, a big focus for us, that provides a lot of opportunity for the advisors in our business, but us as a team, generally, to look after these clients and service them and embed them into our kind of systems and processes, our relationships. And so that’s a new challenge for us. That’s, that’s on the horizon in the near future, which we’re excited about. But also feel, I mean, I know it’s always changing all the time, but I feel now we’re build a lot of systems and processes that have businesses add a maturity point where we can we can run a lot more smoothly now. We’ve been through a whole bunch of rule changes and compliance changes with dealer groups and various things that that I’m really confident in The team, we’ve built the systems, we’ve got the processes that we can hum along nicely. I know there’ll be some more changes and curveballs coming up, that we live in, in the industry we live in. But I’m really confident about that, that we’re out of the business is the great foundation for what’s coming up and, and likely more opportunities and other sorts of challenges out there in our business and many other businesses as well. But I do think that the industry has a real positive future. And we’re in a position to, to grow with that for sure.

Ben Nash
Yeah, totally. I think the changes that have happened in the recent past, while not perfect, have really pushed things in the right direction and more confidence from consumers, more dedicated people within the industry that are fully committed, because it’s some of the hurdles that you got to jump over now. And I think it’s a great time to be an advisor. Sounds like some exciting times ahead for for you guys. Which is, which is great to hear. My last question for you is, if you could go back to yourself day one of the business and give yourself one piece of advice, what would it be?

Martin McGrath
To tough one, because, like many things, you don’t want to change things because you learn for many things. But I suppose I suppose I’ll enter if you get I’ll enter it with two things. If you let me do one of them. I, I took the advice. And the other one, I’d give the advice. I had a good friend, another business, a good friend and business mentor kind of in some respects. And he suggested from day one, don’t name the business, ask yourself, don’t name it not MoGraph financial plan, because at some point in the future, you may want to grow beyond you. And I was really hesitant about that. Because I was like no, no, I don’t want to go big. On average, there’s the about me, it’d be a good branding thing. It’s Martin McGrath people know my name, they’ll connect it, they’ll find me very easy on Google. But I took his advice. And I didn’t I named it a more generic kind of name that that could mean that we could bring in other people in the future and other advisors. And anyone else two years when I think he’s wrong, I should change just to my name. I don’t think I’m going to grow beyond me. But I didn’t. And that’s definitely something I’m glad I I took that advice and stuck to it. Because otherwise, I’d be going through a name change by now for sure. So that’s advice, I suppose that I took that I did, except from day one that that I think is important. And everyone’s different. But often a lot of people think, Oh, I won’t grow too big, or keep it small and simple ended up changing names at some point. The second part would be is, if I’m starting again today, kind of thing. I love the nation bit. I love just being specific, who we want to work with how we can work with them, the Met the marketing messages, the processes, everything is dialed into that person, when they see it, they read it, they feel like you’re talking to them. We got there. And I’m very glad we got there. And I wouldn’t be where we are if we didn’t do all that stuff and didn’t have those offerings in the past. But I think in the world we live in. And with our business in particular, and many businesses, we don’t need 10,000 clients, we only need a certain amount of clients and no matter how nice you are, and you can be very nice, but you’ll be able to find enough clients in that area in most cases. And if it is a low number, you’re charging the right premium to still have a very profitable business. So I think that would be the tip is that pick the niche that a the best that you really love, you know, there’s a focus on and really dialing in that area. That’s going to be a game changer for our business from when we made that shift.

Ben Nash
I love it. I think if you if you’re not talking to someone you’re talking to no one and I think I’ve been fortunate to chat to a lot of great businesses through these podcasts and just through exposure in the industry and it seems that the ones that are doing the best are the ones that have gone all in on that so definitely some wise words there. Martin, thank you so much for sharing your story may really really appreciate it and you’re pumped to see the next chapter for you guys.

Martin McGrath
Very happy to see has been Cheers guys.

Ben Nash
We’ll catch you on the next one.

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