October 13, 2022

#351 Andrew Hewison – Transcript

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Jess Brady
Hi, Andrew.

Andrew Hewison
Jess, how are you?

Jess Brady
I’m great. I think I’ll be better after today’s conversation because I think you are going to blow my mind when it comes to all things. financial advice, and specifically tech but but but but but before we get way, way into the weeds on this because you know that I don’t want to go there and learn all the things. I think it’s important that we learn a little bit more about you upfront and then of course, a little bit more about the business. So, Andrew to kick us off. Can you please tell us your story?

Andrew Hewison
Absolutely. Okay. So my name is Andrew Hewison. I live in Melbourne, in the bayside area, married with three children under four, watch, wow, yes, until tomorrow, the one of them turns three and then the week after another one turns five. But life, life is busy. Life is very, very fun. I wouldn’t have that any other way. I grew up down on the Mornington Peninsula. Like a lot of young young men, very, very sports mad always had aspirations of being an AFL football, fell just a little short there and then decided I was going to go into sport management, plant management, etc. I did a week’s worth of work experience there and realize that’s the last thing I wanted to do because it was ex football is dealing with current footballers, not business people dealing with business people, no offense to any football is out there. But just decided that wasn’t what I was going to do. And what it wasn’t what I wanted to do. And at the same time my father John Hewson, who some listeners might know the name. He he started, Houston associates as it was known back then in around about 1985. So obviously he was building out, you know, well established and continuing to grow Houston’s. And then I decided, look, I’m doing a commerce degree. I was majoring in marketing and sport management. So nothing financial planning related, but then just decided that maybe this is something that I need to have a look at, and started work with data and after about five minutes decided that I absolutely loved it. I just loved dealing with people. I love relationships, I love customer service. And I can start to see that, you know, this thing called financial planning can actually have such a huge impact on people’s lives. So I started to study postgraduate studies almost straight away. And the degree was finished at that stage. I was working at a surf shop managing a surf shop was I went basically out of a surf shop straight into a suit working in financial planning. So that’s a bit strange. And I still love surfing today. That’s my number one passion and hobby did a sabbatical nine months in for 22 years overseas and worked for some finance related businesses over there and then came back and I’ve been in Houston’s ever since I worked as a financial advisor solely as a financial advisor for 15 years. along that journey, I I purchased equity in the business at the same time as a number of my other current business partners. And then I actually believe it or not, I actually applied for my father’s role as managing director when he indicated he was going to step back about 10 years ago so that was sourced out to a third party to make that decision and I was lucky enough to to be successful in that role and I’ve been the managing director of Hewison private wealth for the last eight or so years. I still have my say CFP designation I still have I have a small client book but as the business continues to grow the majority of my time is taken up running the business operationally. Hmm.

Jess Brady
Surfshop to suit I love that quote. I think that’s very interesting. And you can’t see him but he’s got a beautiful suit on and he’s got you know, this beautiful background behind him of the cityscape of Melbourne so I can just imagine the billabong,

Andrew Hewison
yeah, I would prefer that I would prefer the background to be a wave somewhere and that’s that’s that’s the pipe dream one day he’s perhaps not have the office of the office looking out over the water. That’d be great. But definitely would like my my living room window to look out over my favorite surf break one day.

Jess Brady
Love it. So tell me more about the business itself. I can’t think of how many staff you got. You’ve got a an interesting investment philosophy. Let’s learn more about that.

Andrew Hewison
Okay, no problem. So we’re an independent financial planning business. And we’re independently owned and we’re independent by the letter of the law as well. We’ve always been that way. We’ve always been a fee for service business. It’s something that we are very passionate about and you know, whether it was deliberate or not, you know, the industry going going around in cycles. of consolidation and then fragmentation right now I think is it’s it is as good a time as ever to be an independent business or an independently owned business on ifI. So we’ve grown organically over our 38 odd years, we manage 1.7, there abouts 1.7 billion in farm. We have the numbers always moving. But we’ve got somewhere between 50 to 55 staff, we’re actually been growing our offshore component quite a bit recently, we’ve had one or two offshore staff members for a few years now. And I think it’s very much the same story as everyone else. It’s a topic for another discussion, but you have one, it breaks down a whole lot of barriers and perhaps perceptions you might have had, you realize the caliber of the people and it’s not about saving money anymore. It’s also about productivity. And we’ve just been growing out that component over the last few years

Jess Brady
as well. Interesting. Where are they based?

Andrew Hewison
Before we move on? KL and the Philippines?

Jess Brady
Cool. Okay. And then your Australian team? Are they mainly Melbourne? Yeah,

Andrew Hewison
so we’ve only got a Melbourne but well, we’re a Melbourne based business, we’ve only got got one office, we’ve got one, our SMSF Manager works in Sydney. So you know, again, remote, but remote can mean anywhere. It doesn’t have to mean overseas as well, just trying to try and get the best talent. For for for the for the roles that you’re looking for. You know, we’re not afraid to look at people that don’t work in the Houston office. But we’re on St Kilda, road 417 Security road here in Melbourne. Sure. So, yeah. And so look, I mean, I’m happy to sort of just to keep rolling with it. And in terms of, you know, you mentioned that investment philosophy. And look, the thing I’d say from the outset is, and I’m going to talk about what we believe in a philosophical sense, is the right structure and the right philosophy to for us to be able to produce the best outcomes for clients. But I totally appreciate that. There. It’s not the only way it is it is one way and everyone else is doing it the way that they they believe works for them and their clients. And I totally respect that. So in a nutshell, Jess, we’ve never, we’ve never used risk profiling. We certainly have a very robust fact find, which, which asks some detailed risk related questions. But it’s very simple. As a as a, you know, we’ve always called it objective based advice. And I know probably a&p came out a few years ago and coined the phrase goals based advice. And I get that that’s all the same sort of thing to us. But when a client walks through the door, and it speaks to also that independence, the independence that we that we hold on to when a client walks through the door and sits in front of us. And we’re asking all the questions about who they are, what they, what they’re looking to achieve, what are their goals and aspirations, we want to listen to that. And then we want to put together a strategy and an investment piece to that strategy, which we believe is going to be entirely in their best interest and entirely appropriate to achieve their goals and objectives. If if they tell us what their goals and objectives are, and we ask them to fill out a risk profile, and that risk profile puts puts out a risk profile, which then feeds into a model portfolio, which is not going to actually achieve their goals and objectives, we think we’ve got a problem. And so we’d rather listen to them, we’ll listen to what they need. And we’re going to obviously get into the weeds of our systems in a minute. But be able to put together a bespoke portfolio with a bespoke asset allocation, which we believe we can then take back to them and say, This is what we think you need that’s built for you that’s going to achieve your goals and objectives. And if there isn’t alignment, because their goals and objectives are more aggressive than we think is achievable, then that’s when the conversation starts around. Look, you realize you’re gonna have to take a great deal of risk, which we don’t think we’re not the right business to put that together. Because we’re actually quite conservative by nature. But but there’s a misalignment here between where you need to be and what you’re going to need to do to try and get there. Let’s start talking about that.

Jess Brady
Obviously, because you’re running a business where you’re building bespoke portfolios. There has to be such a level of rigor, and visibility and technology, I would imagine to enable you to do that. This is where I, uh, you know, you and I talked before this podcast, and you’re doing lots of cool stuff, and I could talk to you for a long time. But alas, our fair listeners will not listen to all day podcasts. Maybe we should. Let’s try. No, I want to talk really specifically about how you’ve built this philosophy into the business that exists today. focusing a lot more on the tech piece. But before we get into really what you’re doing there, given that the business is older than I am, you have clearly gone through an enormous amount of evolution, when did you really start to realize that the tech piece could really, I guess, completely change in the business and revolutionize the advice that you’re giving?

Andrew Hewison
Well, that’s an and and just to be very clear to I think I was five when this business started. So I was only just, I was only just born, I’ve been here for about 20 years. And and I’m going to try and you know, like, there might well be some gaps along the way. But as you say, you and I focusing on one aspect of this, and and if any listeners actually had any further questions, they’re more than welcome to send me an email or find me on LinkedIn or something like that. Absolutely. No problem. So you got to go back in history a little bit. So my, my my father who founded the business, we have never used a platform, which is going to be surprising to some people, but don’t going back way when 1987 stock market crash happened. And dad realized at the time that in his belief, and again, I talk about our philosophies not being the only way, but his belief was that at that point in time, most of his clients were in managed funds, managed funds at that point in time, you know, they were being exited by other unit holders, some of them were being frozen, what he realized is that his client, his own clients didn’t have control and flexibility over their outcomes and over their own destiny. So out of that, and soon after, he decided to start building portfolios on behalf of his clients that were predominantly direct. And that still is a philosophy that we hold very dearly, today. So 90 to 95% of our portfolios would be directly invested. Okay. And so back, then he started administering those portfolios, because again, and I’m going to stop saying this, this is for the last time, because it’s not the only way. But our belief back then, or his belief back then, was that if you’re on a platform, you do have restrictions around what you can invest in on behalf of your clients. And so as has happened, the building that we’re in today is a building that our clients have invested in, in a property sense, and there’s one across the road that our clients have been down, you can make it work, but I think 99% of advisors out there would be like, well, it’s not on a platform, it’s not on the platform that I use. So I can’t invest in it. But from our perspective, if we feel like this is in the client’s best interests, and it’s going to get them towards their achieving their goals, objectives, we need to be able to invest in it. So going all the way back there, he was administering portfolios under this roof using spreadsheets. After a few years, he and a small team he had at that point in time realized that there was no other technology out there, whether it was x plan back then or whatever, that that would adequately give them what they what they needed to be able to continue to do that. So they actually went out and built their own. So for the next 25 years, we had our own proprietary piece of software. And that was like our CRM, our workflows, our planning tools, APL, all of that, and and we, as a business manage over 750, self managed superannuation funds. And it also did SMSF administration, pension management contributions, the whole the whole box and dice. So now you fast forward up to, you know, around about five years ago, we’d made the decision before that. But five years ago, we embarked on the retirement of that system. Now, it was only officially retired about six months ago, believe it or not, it took that long. Because we realized that look, we tried to tell ourselves at that point. Look, we’re financial advisors, we’re not we’re not tech developers. And technology is literally just like a hockey stick, it’s just started to, you know, invert, and just go to the cloud, so we can’t keep up. So we started looking for alternatives we looked to rebuild it on on our own. We went down the pathway of of our piece of software off the shelf, I won’t mention the name because it is a good piece of software.

We started implementing it, we brought all our client data in. And at the last minute, we realized that there were a couple of key components that we were told this software had and could do and and in the end, it fell over and it didn’t have those components. And that’s also a key warning that I will give now and we’ll talk about it later, is when you’re talking to software providers, software, software providers, the sales team, in our experience will tell you things that the system will do which is it can do everything and then you speak to the speak to the technical people behind and like who said that could do that. It can’t do that. So that’s a that’s a bit of a trick For first time players as well. And so, so part of the software that we’ve we’ve, we had developed and, and and now with, and we’ll get to the technology stack that we’re using now, part of that is the ability to actually be able to create an asset allocation from scratch, and then be able to, you know, bring in investments that sit on our approved product list into that asset allocation, which then can determine, you know, what kind of income that portfolio is going to generate, you know, we obviously work on some assumptions around the growth of certain asset classes, which then falls into, you know, a lot of the reporting that we can create for our clients to show them the benefits of of that asset allocation. And that particular strategy,

Jess Brady
I made a mistake earlier, because I thought, ignorantly, given the age of the business, that technology would be a new thing that has been sort of brought into the business and revolutionize the business. But actually, when I hear your story, fascinatingly Tech has been an enormous part of the journey. And I didn’t realize that there was such an early on investment and adoption of bespoke creation of technology. And so you’ve really built a business where Tech has always been in your DNA.

Andrew Hewison
Absolutely. And I give, you know, obviously give all the credit to the old man for that. And one of the key pillars of our business is innovation. And we’ve always felt that our ability to as an independent business, our ability to be able to provide the clients with the best outcome and the best experience and also compete with some of our larger competitors, and peers in the industry, it was always going to have to be around our ability to use technology to run in a more efficient business, I always say, and I might have mentioned this to you beforehand, we we are, you know, a business that actually I would say that not doesn’t use managed accounts and doesn’t use platforms, we are a very, we are a very inefficient business that is operating very efficiently. Because I know a lot of people I’ve got a lot of obviously got a lot of friends in the industry. And I, I speak to them about how what we do and how we do it, and they just scratch their heads. I mean, we’re also bought, it’s worth and this is another topic, but part of our fixed income portfolio, and we’ve got a very diversified approach to fixed income. But a piece of that is the use of first secured mortgages. So and we’ve been using them for almost 30 years, that and they’re not pooled funds, they’re contributory mortgages, so individual mortgages, we vet them, we look at the we look at the valuation, we decide, in this office, whether or not our clients individually going to take part, I only bring that up. Because we we’ve now, we’ve now been involved across 10s of 1000s of those mortgages, we’re growing, we use seven providers, it’s it’s a big job to be able to be able to administer that in the background. But again, when you start small, you talking to me today after 38 years, but when you start something small, it’s it’s manageable. And then you know, as you continue to grow with greater client numbers, and more people, you develop your systems and processes over time. And so you know, you work out how to continue growing it, but also to continue doing it relatively efficiently. And you’ll learn things along the way. So it’s not like we just turned up yesterday decided to put all this together, it would be very difficult, I believe, to be able to do that. It’s just that we’ve been doing it for now for so long. And we’ve been growing nice and slowly along the way,

Jess Brady
given the level of inherent complexity in what you do. And we’ve obviously touched on a couple of the points there that leave us other advisors thinking Whoa, that sounds interesting. I want you to paint a picture for us in terms of understanding like, what have you built, let’s talk through, you know, if we can in the short time that we have together, you know, give us a high level version of what end to end, you’ve been able to put into the business to enable this level of complexity to be achieved compliant in a highly compliant, highly efficient, highly customer centric way.

Andrew Hewison
Okay, what I would say is Yeah, that’s right. And I was talking about I go on too many tangents and confuse everyone. So I’ll try and try and keep it

Jess Brady
where a smart bunch where all right. Yeah.

Andrew Hewison
So So I think also what I would say too, is I was fortunate enough to be some of the some of the listeners out there may may do some things with Macquarie we use Macquarie’s CMA. That’s all we use from a product point of view. And we’re a member of within the Macquarie network, they’ve got a network, I’ve got a group called Van, the virtual advisor network, which is used to be for a small number of advertisers. But But I do highly recommend you, anyone might be interested to look into that, because they now do offer it to a broader base of

Jess Brady
very happy with that small plug for that.

Andrew Hewison
Well, you might have heard of it before. But look, we have actually got a lot out of it. And I was lucky enough some years ago, to suit to go with a small group of advisors across to the United States. Yeah, on a on a on a on a Global Innovation Tour is what they call it. And it was back then, that I started to cottoned on to this concept of the technology stack. And the and, and the ability to effectively create a hub and spoke model where you house or your your your data, you know, somewhere. And for us, we’ve used Salesforce in this instance, and then from there, you it’s a plug and play. So you pick the best of breed pieces of technology that suit you and your business and your clients. But if for any one reason, something new comes along, you do have the ability to replace a piece of software with another, we haven’t yet had to do that,

Jess Brady
because they have like an app, just for those of us who’ve never used it before. So apart from their sort of core CRM, my understanding is they have almost like a library of different apps that can be plugged into the Salesforce system. So you can plug in and plug out and play. Obviously, there’s more complexity, but just so that people who have never used it can understand that sort of how it works, right?

Andrew Hewison
I wish it was that simple.

Jess Brady
Trying to make it as simple as possible.

Unknown Speaker
They won’t be used to the so if we use

Jess Brady
x plan or an advisor logic as a general example, you know, you need to remember that most financial advisors who use just financial planning software, they’re not used to having a library of 1000s of different industry agnostic pieces of tech that they can sort of push into their process.

Andrew Hewison
Yeah, so So Salesforce is is out of the box, you can’t do a lot with Salesforce, you need to customize it. Now, what I would say is if you’re looking to build out your CRM, your purchase, you know, a license to Salesforce, you know, out of the box, and

they have two different two different instances, like one’s a call marketing cloud. And the other one is financial services cloud. And I’m not you and I will be here all day, if I try and, and I and you know, I’m the pretty face to all this, so to speak. I mean, there’s a lot of other people underneath that do a lot of the a lot of the grunt work but know a lot more of the detail than I do so. So Salesforce out of the box, you start to customize it, you do need to find a developer, you don’t have to, you know, Salesforce can be basic, and you can plug you could plug in I don’t know whether you could plug in x plan, but you can certainly plug in other pieces of off the shelf software. But for us, and I’ll just sort of try to keep it narrow in terms of us. Yeah, Salesforce is our is our CRM, and it is, you know, out of our CRM, it is now basically what I would say is it’s the it’s, it’s pretty much the equivalent to X plan. We have our, you know, our CRM, all our client information in there. We have all of our workflows built out out in there. So if I need something funny to new client comes in, they’ve signed up, and I need to then start pushing it out to the, the the ops team. Here’s what needs to happen, I create what they call a case. And that sets off a chain of workflows that goes throughout the office to to get the client implemented in a broad sense. We’ve also developed the planning tools. So all of our clients that sit in Salesforce, they sit in there as a household, which is like basically like if Andrew Heusen has a super fund, a family trust and a personal portfolio. I’m in there with my family as a household and then there’s portfolios underneath, I have the ability to go and create the new client, the new house, I’ll create the portfolios. And we’ve, you know, I’m jumping ahead a little bit. But what we’ve also been able to do now is we’ve now rather than craft an asset allocation from scratch, we’ve got like five or six suggested asset allocations that you can start with. And once you pick that and you put in your investable amount, it will bring in the APL into the different areas of the asset class and then you can craft it to decide whether or not the client wants to invest in Woolworths for example that might be on I was like, no look, I don’t need so it’s not like oh, you have to have that portfolio. It’s not a model. And you know, there’s a compliance piece behind that. We’ve got now 10 advisors, we started with, you know, three advisors then we went to six and we’re by and slowly building it out, we have a lot of rigor that goes on in the background, to ensure that all our clients are educated and skilled enough to be trusted. And again, we’re not, we don’t have 50 authorized reps, we’ve got 10. In one office, we’ve got a compliance manager, it’s, there’s there systems and processes in place to manage that. So you then build out the asset allocation that goes, you know, implements, and then we’ve now built out rebalance modeling. So I can look at it at a household level, if there’s multiple portfolios, I can line those all up, they can, we can have a look on one screen, what’s what each portfolio has, with a master asset allocation at the top. So every time I make a change, it’ll either deduct or credit the cash account, it’ll show me what I still need to wear, I still need to invest at the asset allocation level to rebalance the portfolio. So there’s planning tools in there, obviously, I YPL is in there. And then, which the piece that we actually implemented at the very beginning, whilst we were still building all this out is the sales, the sales funnel, right? So client makes a phone call comes in as a lead, it’s got some incredible sort of, you know, tools in there that you can, that way you can nurture them, see where they’re at, you can log in all your all your phone calls along the way. And then it pushes through to what they call an opportunity. And then you’ve got your own process from there as to, you know, where you go until you close off the client, as as you know, being implement fully implemented. That’s that’s one Jess, that’s, that’s the hub, right? And then the spoke class, we don’t do accounting, but we use class, because we needed an investment source of truth. And we also needed a piece of software that could also do the appropriate SMSF administration that that we required because we do the SMSF admin admin internally. You know, as part of the whole planning process, you know, you need to be able to manage contributions, you know, concessional non concessional withdrawal rate, contribution, pension strategies, all that sort of thing. Obviously, you get the investment admin at investment admin paste there as well dividends that are coming in and, you know, the matching technology that that you get corporate actions, you bring in the you bring in your the world, for us as the Macquarie CMA, you bring that in what I would say at this point in time, you mentioned apps before in Salesforce, now, there’s an App Exchange, which means that if you don’t want your developer to go, you don’t think your developer doesn’t want to pay them to go and customize and build out something for you. You go and check the App Exchange, or they do to find out whether or not the bells and whistles that you’re looking for already exist by a third party that sits on the app exchange. So the app exchange is, is available in order to minimize the amount of development that needs to take place. So that is definitely a way of, you know, utilizing that and saving money to develop it yourself along the way. But when you’re talking about the hub and the spoke, I’m talking about all of the best of breed pieces of software, which which you then have to and again, this, its warts and all to be to be honest with you. This is why when there’s also money that you’ve got to invest in,

you’ve got to invest in, in the API development, right? So someone or this is the one thing I learned on day one, anyone that tells you that they’ve got an API, great, what does it do? Like it doesn’t share one piece of data, you might need 10 pieces of data. And it might need to be a two way two way API, because it might need to send data into the system, and send data back out of the system. So just because someone says an API, they have an API, take it with a grain of salt until you’ve gone and done more, read more research on on what that API is actually built to do.

Jess Brady
And what have you been able to do through the use of API’s in the business from a tech perspective?

Andrew Hewison
So that’s where you’ve got Salesforce, and you’ve got class? Yeah, we’ve for we’ve got a client portal, which we actually did develop ourselves 15 years ago when we rebuilt that on WordPress, a WordPress platform a few years ago, because we want to keep develop. It’s the user experience piece that we want to keep control of. And we want to keep developing. And we see the client portal for us is, you know, classic, got a great client portal, but it didn’t show the clients what we wanted it to show. And I didn’t want to be dictated by third party as far as what experience I give the client. So the client portal is something that we we developed. So there’s another piece of software, so we’re up to three, and I’ll bring it all together in a minute. Now we’re using another piece of really cool technology, which is a relatively new business new company. It’s called portfolio cloud, and that’s effectively we use it primarily for advice delivery. But portfolio cloud does have the ability for you If you don’t want to run a platform, you you can, you can feed, you can put model portfolios into Portfolio cloud, you can then assign all your clients to whatever those models might be. And it does actually have the ability for you to review a client, press up, press a button and have it automatically rebalance back to the updated model of whatever sits in that particular model. And that can then automatically generate you set up the templates in the background with the IRAs, and so forth. But you can then press a button and effectively it will generate an ROA with the recommendations that portfolio cloud have suggested. And you can press another button, send it straight to the client, the client can receive it on their phone, tablet, computer, it can be sent via text message and an email. And they can interactively, hit approve on the tablet, or double click Approve on the on the mouse, and it goes straight back into the system. Now bearing in mind, we don’t use the model portfolio component, I guess you could say, you know, we’ve got 1600 portfolios, we’ve got 1600 models. So we do it, we still do it individually. And again, huge process development in the background that our planning team, it runs like a well oiled machine as far as how they do that. But again, that’s probably not for today. That’s portfolio cloud. So, you know, five minutes ago, we had pas and support people. Okay, here are the recommendations that we would like to implement, you physically go and put together the the Word doc PDF, it, send it to the client, the client approves, it goes back into an inbox, every now and again, one gets missed as the market gone up as the market gone down. I don’t know why. But it always feels like the market goes up. And we always have to pay money out because we’ve missed something. All of that got automated overnight. When you were able to go into the system, you do you know at the moment we do our modeling in Salesforce, then we we plug it into PC, sends it out, the client approves it. And then there’s an order, there’s an audit log in Portfolio cloud of what’s come back and approved. As of like, I think we were chatting like as of two weeks ago, we have now with and credit to the two technology providers portfolio, cloud and open markets who our online trading platform, they have now worked together to join their systems. So that when the advice comes back in as being approved into people follow cloud, we, we we don’t even have to do this step. But we’ve got this step at the moment, we actually can just press a button, and it will trade automatically. So it’s called straight through processing with with open markets. Now, for 37 and a half years, we were doing this and when the the the advice came back into our office, our operations team were jumping on to open markets and physically entering all of the buys and sells. And they did a great

Jess Brady
job of manually updating the data to show what the client holds

Andrew Hewison
as well. Well, I mean, that’s again, where you’ve got over time where you’ve developing out the API’s like we had, we had the trading happening in open markets, that would then go through to the registry, the registry would overnight or you know trading trade plus to for example, would go back that would update the class being the source of truth for investment data class would then go and update Salesforce, and at the same time update portfolio cloud and the client portal. So we’re relying on the class API to update all the other systems. But again, people are going to make mistakes. And the bigger we get the bigger clients we’ve got, the bigger the mistakes that get made. And so this straight through processing, along with portfolio cloud, it’s hard to fathom and quantify the amount of time and money that we’ve saved and the reduction of errors that we’ve that we’ve now removed from the automation of all of these systems put together.

Jess Brady
I feel like you’re living in the future.

Andrew Hewison
It’s you know what, it’s when you’re living in it, you don’t really feel that way. Like I don’t we don’t sit around and pat each other on the back and go, Oh, well, how good are we We’re just trying to we feel like we’re trying to stay up, stay keep our own heads above water, to be honest. And when you’re in the trenches doing it, I gotta be honest, it is really hard work when you’re trying to run a business and also you’re bearing you’re bearing this responsibility at the same time but I guess what I would say without trying to sound too you know, angelic about it all is like that. We were at a strategy director board meeting or whatever we might talk for literally 30 seconds about how difficult it is and then and then it always just reverts back to for in our in our office. We believe that that we have to keep the full So we can’t change as far as how we do things for the clients because we think that’s in their best interest. And so we just have to put our heads down and keep trying to work forward on on ways of making it as efficient as possible.

Jess Brady
Well, huge congrats to I think anyone that has ever tried to integrate any piece of technology into their financial advice business, we’ll know all of the complexities that come with, and just hearing that evolution in the tech stack and, and the learnings and, and the failures as well. You know, it’s definitely sounds, to me, like a lot of complexity, a lot of thought, and a lot of effort has gone into that. But obviously, to your point, you’re now able to have a client experience that is hugely on brand for what you’ve tried to build and wildly efficient and compliant by virtue of the fact that this technology is doing so much of the pieces for you in a way that’s fast and correct.

Andrew Hewison
Yeah, absolutely. And the other thing I’d say about portfolio cloud is it is actually a very, very, very good compliance tool as well. Because when you hit Send your shows, when it goes out, it keeps it keeps a log of when the client opens it when they approve it, and when it comes back into the system. So it’s very difficult for someone to say, Oh, we didn’t send it to me, I didn’t get it, because we can kind of see what’s happening. What are other things I just would love to add, as we’re going along, is, myself, my business partners, senior management. We don’t we don’t own this, we don’t own the success of this. So one of the things that this business has done over the years, we used to have two now we only have one, but we have an annual staff conference where we close the office for two days. And we get off site, and we workshop different areas of the business to effectively how do we improve what we do for the client. But as you can imagine, a huge part of this is always technology focused? Or how do we improve the way that we do things in the office to support support the technology we’re using, or vice versa. So, so much of what we have right now is the brainchild of all of the people out in our office that are living and breathing it every day, it’s not. So I just don’t want anyone to think that this all happens because of you know, some of the just the key people in the office whiteboarding it all because at the end of the day, we run, we try to run a very flat hierarchy here. One of our key values internally is empowerment. It’s our three internal values of fun family and empowerment. They’re written all over the walls in the background. And we want to empower our staff who are using this for good, bad or indifferent every day, we want to empower them to know that if they’ve got a better way of doing something in the way that we can improve the system. And then obviously, I suppose, because we at this point in time, just surprisingly, believe it or not, we don’t have full time developers doing this

Jess Brady
question. I’m like, Do you have any dedicated resources to just this or No,

Andrew Hewison
no, no. Now, a couple of points on that, arguably, well, arguably, we should, we should have maybe one person, okay. But you know, it is a it’s a bit of a cross to bear. But we do ask, we do ask our staff to maintain an involvement, whether it’s championing a new a new piece of software, championing championing a new efficiency within a piece of software, which they’ve had a hand in. So you know, they then take on the responsibility of meeting with the developers that we work with developing the statement of works user acceptance testing, saying what they do and don’t like about it, we try to share that around quite a bit. Because obviously, they’ve got a day job to do as well. We haven’t really had like most people really embrace it, because they see they see that they they’re having an impact and their voices are being heard, which is going to improve their own experience, day to day. If I could just keep going on that point. Where we are at today, we had an operations manager who I would say at least 50% of his time was involved with managing our, our developer, or develop developers, because we’ve got a Salesforce developer who’s independent. But you know, we’ve obviously customized classes not can’t really customize class too much. They’re a bit of a big, bigger beast and won’t say much about that. They just you just, you know, hard to impact. Yeah, but portfolio cloud being, being a smaller, independent tech developer and for provider of software been great with customizing their system for us. And so we’ve had, you know, an operations manager internally who’s sort of managed that and one of my business partners, Simon, you know, as a partner, he sort of oversees the error of systems, I mean, we all grow up obtaining and increasing the level of IP that we have along the way. But we now our operations manager departed some months ago. And we’ve now just hired a Chief Operating Officer who will now take over at this point in time take over the, the overseeing of any additional developments or projects we’ve got going. But one thing I learned recently, probably should have learned a lot earlier. But that’s fine, is that I knew for the period of time when we’re looking to replace their ops manager with a CFO that a lot of this stuff was gonna fall on my shoulders, and I just didn’t have the time. And I was put in touch with with a technology consultant or project manager. And I sometimes feel like you start talking about consulting and start, people start getting quite concerned about what it’s going to cost. And I actually want to give them a shout out because I feel so so passionate about the work they do for us was a group out of Brisbane called level up consulting, Jasmine, I Riley is the principal there. And they have been an absolute game changer for us. So they they are now even though you know, they’re a consultant, but they are now essentially the manager of all of our projects. And their fees are not not exorbitant, they’ve actually saved us so much money, because they’ve come in, and they’ve looked at where they’re at some of the agreements we might have in place or don’t have in place at this point in time. And they’re questioning and holding people accountable. And I think when you’ve got people that are professionals in the area to be dealing with other professionals. Some of our some of our software, developers and partners probably don’t love Jasmine all that much these days, because she now holds them accountable. Because she it’s like a mechanic talking to another mechanic. Yeah, no, I don’t know what’s going on underneath the bottom of my car. Yeah, and not saying anyone’s being dishonest. But if I don’t ask the right questions, sometimes I don’t get the right answers. And so again, there is an ability to use consultants and third parties to manage these relationships without feeling like you’ve got to do that or yourself.

Jess Brady
I think that that’s such an interesting and important point to sort of pause on because as people are listening to this, it’s very evident that you’ve got a lot of tech that’s doing a lot of cool things. And it’s been a long process to evolve it to what it is today. And you’ve got a big team that can share the load. But when you’ve got a small business, and you’re hearing about all the cool stuff you’re doing, I think it would be quite easy for some people listening up to go, there’s no way that I can build anything close to this, I don’t understand it. I’m busy seeing clients, we don’t have the time, expertise or resources.

But as you said, Hello, there’s a whole field of people who specialize in this. I mean, ironically, we believe in specialization, that’s where we have businesses where people come to us to get our expertise, we need to remember that that exists for other people as well. And it’s great to hear that you’ve had such success and such confidence. It sounds like you’ve got such an enormous amount of confidence in someone externally managing that process for you. So that everyone can realize that they’re not alone, and that people out there doing this to help them along the way.

Andrew Hewison
And, and look just as simplified a little bit, too. I mean, I think the message one of the messages I’d love to share today is that I’m not suggesting that everyone should run away from platforms. But I think a lot of people feel like they are beholden to one system. And I think we all know which system that is, if the numbers are correct, I think 85% of the industry will use one one particular piece of software. I think even just you know, you know, and I’m not suggesting people run out and use Salesforce, either I think there are there are other CRM pieces of software out there, whether it’s HubSpot, or whatever it might be, but even Salesforce in a really simple form. But these technologies they do we all talk to each other, you know, so, you know, the ability to use, for example, portfolio cloud, for your advice, delivery, and have that speak to speak to the platform that you use. You know, obviously, we have purpose built out our client portal. But I just think my point is that you don’t have to have the same business model as he was in private wealth, you can run your own business model. But also understand that you are no longer beholden to any one system. There are so many other pieces of software out there now.

Jess Brady
And that if you get the integration piece, right, what I’m hearing from you is the efficiency gain for your team is enormous. The client time in terms of, you know, the reactivity. I mean, the fact that you can have a client sign something and it can be almost executed immediately. And the data from once that happens then automatically goes back into those systems. Like this is super cool, what you’ve built. I think it gives us a lot of hope that there is offers an alternate, perhaps we’ll put it like that and not with an alternative to what we’re used to. If there’s a couple of really specific questions I want to get to before we finish today’s chat, though, because as you can all probably hear, we could go for days because I have many more questions. I want to know, cost. I know that’s hard, but like, what’s that looked like for you?

Andrew Hewison
And it’s a bloody good question. And look, I’ve always tried to keep it more so as a percentage of revenue. And so there’ll be some years where, you know, I guess when you’re heavily investing, it can creep up to seven to 10% of, of revenue, but we try and keep it at 5%. And it’s sort of sitting at about that now.

Jess Brady
And is that total tax men, including developers, if that cluding ongoing licenses of using the Teddy’s

Andrew Hewison
okay, it is absolutely. You once you’ve done the initial development, and look what I would say to that point, and I’m not dodging the question, the truth is, we’ve been doing it for so long, Jess, that I can’t tell you. Yeah, that’s most of this amount. Because Salesforce, for example, for us is going to it’ll be it’ll be endless, because I go back to, you know, when we decided to move away from our proprietary software, and we said, well, we’re not, we’re not developers. And then after five minutes of picking the off the off the shelf software, and after five minutes of trying to tell them everything we wanted to do with it, and how it had to do this and how it had to do that. We just realized, oh, no, we actually, we actually are technology developers here. So let’s not try and ignore it. How do we actually embrace it, you set a budget for what you can cope with in what you’re willing to spend, and you just pick off what are the highest, what are the highest payoff activities you need to see from the customization of the software. And then from there, once you’ve sort of done that, and then comes down to, you know, the losses, the license fees, because portfolio cloud class, Salesforce, they all they all have a per user license fee. And but look, my understanding of understanding the market relatively well is that is that some of the proprietor or some of the software sorry, that others are using is not cheap. And so I do believe that it is all it is all manageable. One thing I’d say, you know, there is the API development is always been a frustration for me, because we, we we are are of a more mature size. But we’re still an IFA like, like everyone else. And you go into these people that I’d love these two systems to talk to each other, well, surely class is going to pay for that, you know, because once we’re built it, that’s something that could be used, if you’ve developed it, you could use that for everyone else. And again, that’s where you start to learn more things about the API’s is like, the data specifically that you want in your business to come from class or to go to class. Soon as that is a bit different to another, another one another business, you’re, you’re out 20 to 20, grand to pay for the API development. So I do wish and we did try, you know, with a few businesses that are close to us, what if a couple of ifas came together and shared the cost? And if you know of another business out there that is extremely similar to yours, by all means you should be going and having that conversation because it’s, if you can share the cost, then you can tell straight off the bat, you know, if it’s $50,000, for example, and you’d can share that with another business, you’ve just literally just halved it. Because you can you can share that it’s the license fees, which obviously you can’t share. Yeah, okay.

Jess Brady
I could talk to you for a long time. You’ve given us I was gonna ask you all the things that you’ve done that haven’t worked, I think we’ve learned a lot about salespeople versus actual tech engineers. And there’s probably some very good, wise words of advice there around actually getting the back end experts to show you exactly what it does and doesn’t do. You’ve obviously talked about two way API integrations or learning about exactly what isn’t isn’t integrated? Is there any other piece of advice or lessons from some of the things that didn’t work entirely? Well, for you on your journey, you would want to share

Andrew Hewison
the scoping process just just becomes so so important. And I do believe now, if I had have had a level up consulting in my corner, when we were doing some of the things early on, we would have, they would have understood which questions to ask. And at what point and you can’t have too many demonstrations. And you need to challenge you need to challenge and ask questions that, you know, don’t be afraid. Don’t be afraid if it’s too challenging for the people that you’re talking to because it’s a massive decision. You know, it is time consuming. Don’t Don’t get me wrong on that. Like it really is unless you do have a dedicated resource internally. But it is time consuming for those those people in the office but if you believe strongly enough in it, then you know, that’s why we’ve continued to push forward. Everything takes longer everything. And it doesn’t matter whether you’re talking to businesses that have the same size as you when you go and talk to some of the large product partners that you’ve got, like technology always takes longer and sometimes on boards and stakeholders don’t always understand then on what why wasn’t a built on time and on budget, you must have done something wrong. Even the biggest players in the world, they’ll all tell you the same thing that you know that things do always take longer. Yeah, look, I think that’s about it. As far as the challenge of the challenges.

Jess Brady
That’s a lot. We’ve run out of time, which is so sad, because it’s very evident that what you’ve built is really cool and very interesting and continually evolving. And therefore this becomes an ongoing conversation that we should be having. But before we wrap up, can I ask you a couple of quick, rapid fire questions? These are questions that I ask all of our guests

Andrew Hewison
love to Let’s go, whoo,

Jess Brady
ah, I want to know one thing that you do that looks after your mental health,

Andrew Hewison
I’ve got a few. Because I see this as being so incredibly important in such a busy life that as we go on in life, whether it’s business, family, friends self, there are so many people pulling pulling at you. And it’s very easy for your cup to get empty really quickly. And what you need to realize is that if if your cup is empty, then you can’t expect to be filling up everyone else’s. And I think that’s probably where most people wind up in a bit of a state. Yeah, exercise for me, is my number one, mental health, you know, alleviate. I’ve just always exercised since I was young, and I’m very passionate about health and well being. And I just, if I can get up in the morning when no one else is around, and no one else is away can get that out of the way. Just something that no one else can take away from me. And the day can go crazy from there. But at least I’ve got that in the back. I do I do try to meditate. And just, that’s, I think there’s still a stigma with the word meditation, but it’s literally just sitting and being present in a given moment without any distractions, and just trying to focus on one thing, whether it’s your breath, or whatever it is if and, you know I don’t do it every day, I wish I wish I did. But I just I do focus on that. I’ve got a I’ve got a sauna at home, which I think I double. I double with my if you want to call that meditation as well. big believer in Yeah, I’m a big believer in Hot Cold Therapy. But I’ve just, I’ve got a I’ve got a sauna at home, which I love getting in and just having, you know, 15 minutes chilling out

Jess Brady
good on you. That’s amazing. I went to the infrared sauna last night. I’m a big believer in them as well. Alas, I do not have one in my house.

Andrew Hewison
A good investment a good investment.

Jess Brady
Do you have any advice for younger Andrew, what’s a piece of advice you would give to him?

Andrew Hewison
The advice I’d give to younger Andrew would be there are no shortcuts. In life, there are no shortcuts. If you take a shortcut, you’re probably gambling on something, which means the stakes are high. And one out of 10 times it might pay off. But nine out of 10 times is probably going to mean you’re not going to be around to have the to have the one out of 10. So put a plan like whatever you want to do whatever you want to achieve. It doesn’t have to be wealth creation, although that is obviously a good example. But it could be physical or mental fitness or whatever goal you might have is that put a plan in place and start working hard because hard work. Hard work is ultimately what has seen me succeed to wherever I am today. And whatever I’ve done, beautiful. And I would say from an investment perspective, I do actually wish I had have saved a bit of a bit of cash, you know, at an earlier age and put it into something and really experienced the beauty of compounding returns over time. Because at the age of 42, if I had have done something when I was you know, 18 or 20 years of age and just sat there and forgot about it. You know, I’d be pretty happy with what I’ve with what I would have today. So I’ve started that a bit later. So again, I’ll be instilling that into my kids. A lot of a lot of these things. I’ve got three kids, so a lot of these things I’ll be instilling into them at a younger age.

Jess Brady
Yeah, awesome. Do you have something that’s on your bucket list

Andrew Hewison
surviving the next five years with three young kids?

Jess Brady
Okay, I’m accepting that.

Andrew Hewison
I’ve got one. I before we had kids, my wife Joe and I, we bought a piece of land in Lombok, which is the island next door to Bali. The idea Yeah, the idea was to build a villa or that and spend as much time as we could, you know, we couldn’t afford a cliff chop in Noosa. So we settled for a clifftop being in Lombok, we now have three kids, that villa is now built. I’ve never seen it, because it got built during COVID. So my bucket list is in the next 12 months is to get all of us over there and experience that for the first time.

Jess Brady
Oh my gosh, that’s amazing. That’s very exciting. Last one for you. I have a fake book club. Do you have a book recommendation for me to put on my fake book club list?

Andrew Hewison
I do. Huh? Have you ever heard of a book called Legacy? Ah?

Jess Brady
Is this the one bloody book keeps coming up over and over again? Is it about the All Blacks?

Andrew Hewison
It certainly is

Jess Brady
You have, on this podcast, I can’t tell if it’s because I podcasts with a lot of lovely gentlemen who like football or if it’s just a really, really great book, or both?

Andrew Hewison
Well, I have no interest in rugby union. So I’ll put that straight out there. I’m a Melbournian. Remember, so but But I learned so much about business. In that book, they are they are the most successful sporting business in history, and the cultural pieces around it. And the thing that I talk quite consistently in our office, which I love, would love to share as a parting comment, the concept of sweeping the sheds, so no, no task is above and all black. And so they will get in and they will clean up after themselves. And they will sweep sweep the change rooms after they. And this is the most successful sporting team the world’s ever known and nothing and you, you take that message out to your team in your office. And you’re going to start with you’re going to start with the bones of a pretty, pretty good culture.

Jess Brady
For everyone else who has heard this recommendation several times and hasn’t yet read it. This is our universal sign that we must all go and get legacy and read it because clearly it’s offering some phenomenal insights. Hey, we’ve covered so much ground today, we’ve gone for a little bit longer than we normally do. So thank you to you for allowing me to, to drill deeper and also to our listeners for listening for a little bit extra. But I think it was worth it. Because it’s very evident that as I said, You’ve got tech in your DNA. You’ve built a business that continually disrupts and evolves what tech you’ve got in play with the core philosophy of keeping your clients best, best interest in mind. So when enormous thank you for your time, congratulations to you and your team on what you’ve built. And thank you so much for being part of the expert community podcast today.

Andrew Hewison
Absolute pleasure, Jess, and as I said earlier, if anyone had any questions for me, follow on whether it’s this piece of what we talked about or anything else. I’m out there on social media. I’m on LinkedIn and Instagram, both and just Andrew Hewison send me a message on either platform. And all my email. My email address is also just andrew@hewison.com.au If anyone wanted to say hi and ask me a question, I’m happy to answer.

Jess Brady
Gosh, we’re a collaborative bunch. I love that. Thank you, sir. Congrats again, and I hope everyone enjoyed this week’s podcast. Thanks, Jess.

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