November 14, 2022

AdviceTech Podcast #12 – Fourth Line – Transcript

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Peita Diamantidis
Hello, and welcome to the XY advice tech Podcast. I’m Peita Diamantidis. And joining me here today to deep dive into the fourth line software is well previously a financial adviser and escaped corporate captive in his own words, and sometimes known as the FASIA guy, thank you so much for joining me on the show Joel Rochi.

Joel Ronchi
Welcome. Thank you, Peita. Thank you for having me.

Peita Diamantidis
Not at all now very keen to dive in and get to understand all things fourth line. But let’s just sort of get you get to know you a little better through your use of technology. Yes. What’s your most used emoji? Do you use emojis?

Joel Ronchi
I’m not I’m not a big emoji user. But I found lately the thumbs ups getting a lot just because it’s nice and you know, easy and positive. And also, obviously the smiley face one as well. But yeah, I’m not I’m not a big emoji user. But they’re the two ones I use most Yeah. Okay.

Peita Diamantidis
Very good. And if you had to delete all of the apps off your smartphone, and we all now have so many it’s ridiculous, isn’t it? But you can only keep three, what three would you keep?

Joel Ronchi
Yep, no dramas, I would keep notion which I’ve recently discovered, which is a great little kind of thought collecting. App, which really, I’m actually using it to build out thoughts in program structures and all that kind of stuff. The other one is audible. So I do a lot of delay running and stuff. So that keeps me going through my runs. So it has a really, really good. And Strava is the is the last one. So just to make sure I’m keeping up with my mates and beating their times and all that kind of stuff. Strava as well.

Peita Diamantidis
healthy competition. I love it. That’s exactly right. It’s interesting things like notion. I think you’re probably like me, one of the hardest things is that ideas don’t come in a flurry. Do they they come randomly throughout the day that can be socializing. And I mean, what previously before something like notion you would email yourself or something idiotic like that. Yeah.

Joel Ronchi
That’s right. That’s right. I don’t think anyone I’m running and before notion, I’d have to keep repeating to myself the thought just until I got home, and then I can write it down. But now I kind of stopped and I put international I kept going.

Peita Diamantidis
It’s good, right? Yeah, it’s a sanity saver. I love this. Alrighty, so let’s dive into fourth line. So just to give us a broad sense, let’s go a bit high level initially, in terms of where fourth line sits in the advice tech world Now my understanding it broadly sits in red reg tech, right? That’s the cap. Yes. But sort of what area does it specifically cover?

Joel Ronchi
Well, it’s specifically looking at the advice creation part of the advisor process or an advisor engagement with with the clients. So really, what we’re looking at is the methodology that the client side that the advisors followed to get to the SOA the statement of advice now, so it’s not just looking at the SOA, it’s also looking at the key documentation and processes followed to get there.

Peita Diamantidis
Okay, fantastic. And I guess that’s probably come about because there aren’t many solutions that look at things that way. Right? There’s, I mean, there feels like there’s not a lot of competitors for you guys in this sort of this sort of space.

Joel Ronchi
Yeah, true. That’s true. It’s only there’s only like maybe a couple are, you know, there’s obviously Sammy, which is pretty well known Tick was reasonably not well known as more so maybe a couple of years ago, I suppose most of our direct competition when I speak to licensees and advisors in particular, is really compliance consultants. So, you know, those individual compliance consultants, which is there’s a lot of them now you can see them on LinkedIn and really good. And the challenge that with that, that some of the compliance consultants face versus the fourth one solution is, obviously compliance consultants don’t really well, they’ve got the checklist to follow, but they’ve got capacity constraints. And often the, the pricing structure slightly forth was a lot more affordable than, than a compliance consultant often. So but yeah, so it’s an interesting space, because often, people often ask me, who’s your competitor? Or who are your competitors? And it’s really direct compliance consultants in maybe semi and to a lesser degree.

Peita Diamantidis
Yeah. Okay. And I guess that part of the other challenges with anytime you have a consultant really on anything, is something that whatever you’re working on stops, because it goes away to the consultant. And then it comes back. And then the process continues, and I’m betting just having a look, look at what’s behind fourth line, then that’s less likely this is sort of living and breathing feedback, as opposed to stop submit, wait, return, is that correct? Right.

Joel Ronchi
Yeah, correct. Correct. You know, so, so advisors will have the advice back to them within the next business day. So if submitted through the forefront platform, than the reports generated within the next business day, it goes

Peita Diamantidis
well, so a couple of things caught my eye when I did some digging to understand better for myself. You’ve got a partnership with swin, Swinburne University of Technology. Now, the notes that are talked about machine learning and artificial intelligence and in in the nature of what we’re talking about here, how does that play out? Where’s the value from that?

Joel Ronchi
Yeah, so So at the moment, so that’s really going towards our second generation product and what we’re building out so. So, you know, artificial intelligence, machine learning, natural language processing, that’s all part of the things that we’re building out at the moment behind the scenes within the platform. So obviously, takes time. And Swinburne is a key partner in that we’ve also got Mills Oakley, on the on the kind of wall side of things. Yeah, that helps us kind of as we’re building that kind of stuff out as well.

Peita Diamantidis
Yeah. Okay. And so that’s the sort of element that’s about this bionic approach is trying to, you know, sort of had the human.

Joel Ronchi
Yeah. And I think that’s what differentiates us a little bit from, you know, the compliance consultants, and also the semies, that we’re kind of in the middle, and that we’ve got a bit of both. We’ve got the human oversight, the the human engagement factor, as well as the technology factor.

Peita Diamantidis
All right, so then this is likely to be used, from what I’m hearing both at a licensee level and an even individual advisor level.

Joel Ronchi
Yeah, it’s an interesting one, like, so when, when we when we first started around three years ago, and still today, you know, our core, you know, core user, our licensees, so anything from we’ve got, you know, two AR licensee all the way up to over 500 AR licensee, and then anything in between. And that’s been our traditional market. And then I think, you know, over the last probably six to this year, probably six to nine months, this year, we’ve seen a lot more practices come and approach us directly, and say, Hey, we’ve heard about you, you know, we want to get ahead of the game. It might be that they’re not feeling the love from the licensee, it might be that they’re growing, and they want to make sure they’ve got oversight over their, their advisors internally. But yeah, some some practices are starting to reach out now directly to us, and say, Hey, can you help us irrespective of what our licensees doing?

Peita Diamantidis
Okay. And so then in terms of the user experience, then we you know, how does that once they’ve sort of been on boarded into fourth line, then what is that? How does that take part? You know, how do they take part in that what what experience do they have?

Joel Ronchi
Yeah, so So with with for fine, it’s really up to the beauty of the platform is it’s up to the licensee and all the practice to determine how they want to want to use for fun. Now, I think, since breach reporting came in last year, in October last year, we’ve seen a real move towards preventing, so try to, as much as possible, you know, depends on the scale of the business and what’s going on behind the scenes in the licensee level. But trying to put through as much of the advice through a pre vet scenario, before it goes out the door so that they can identify issues, fix the issues, and then send out the SOA to the client because as we all know, the breaches or breach doesn’t become a Briton until it’s been delivered to the client. Yeah. And that’s where we’re getting a lot of what attraction and actually need for fine is around the Preventing space.

Peita Diamantidis
Yeah, okay. And I mean, anybody who started Historically, who’s been through a licensee prove it just by joining a new one? I mean, you could be talking a month turnaround for documents, you know, for review. So, I mean, anything better than that sounds like, yeah. The advisor and the client.

Joel Ronchi
Yeah. And, and the other other area, especially in the kind of issue with so much movement going on across the industry. A lot of licensees are using for fine for due diligence purposes. So they’re looking at say, let’s say an advisor approaches a licensee or practice approaches the licensee, the licensee might say, right, well, we want to put 2030 4050 SOA isn’t supporting documents before fine. So that we can see if there’s any issues. And that’s, that’s really powerful, and really, in something that’s, you know, completely scalable, time turnarounds really quick. And it allows a licensee to to then make an informed decision about whether they want to bring on that, practice that advisor or not.

Peita Diamantidis
And so when in that process, then when is when you know what’s done by the technology versus what’s done by the humans. Yeah, what part is this getting slicker? And what part gives that real personalization that can that can be necessary? Yeah, so

Joel Ronchi
the technology is kind of drawing out the information from from the documentation that’s uploaded into the fourth line system, and the human oversight to making sure that the technology is working properly, that there’s no false positives or false negatives. And also, the human oversight also caters for the fact that each client, an individual, and each piece of advice is unique, you know, there’s certain strategies and stuff that we’ll use as advisors. But each edge is always unique. And also the process that’s followed by the by the by the advisor. So the human oversight also allows us to dig dig into that, that advice process that’s followed by the advisor. So, you know, looking at the file notes and a little bit more detail, or it might be any unique documentation that the advisors uploaded into the system or the licensee, uploaded into the system that can then be used to evaluate that particular case that particular so I and as a result of that evaluation, before find system then generates a a report, it’s also a it’s almost like an exceptions report, where out of the in the report, it lists basically, the flags, the risk flags, if you like that have been identified, adds commentary around those particular flags. And also then has the associated legislation or regulatory guide reference that ties to that flag for clarity powerful. Yeah, and that’s really powerful because it allows the the licensees and now we’re talking about the human at the licensee side, it’s then allows you know, your your compliance coach, or your quality advice coach or whatever is behind the scenes of licensee to then take that report, use that information, and work collaboratively with the advisor, rather than it being you know, a punitive kind of naughty, naughty approach. It’s actually Well, here’s the issue. Here’s why it’s an issue because here’s the regulations or the RG, or whatever it might be. Here’s where it’s the issue is in the SOA or the supporting documentation. All right, let’s let’s work out why that’s the case. And then they use it as a bit of a coaching tool. And we’ve had many licensees over over the years kind of say to us, you know, that they now enjoy faultline. Whereas in the past, it used to be I remember, one guy said to me, you know, is to go out and to the practices. And in one case, he almost got into a physical altercation with the the advisor because the advisor guy, you’re picking on me and he’s going and because they had their internal checklists, whereas now it’s kind of a collaborative conversation. There’s an inter the independent third party, which is fourth line saying here, the issues here, why their issues, here is the location of the issues within your advice. And now the adviser are okay, I get it, you know, you’re not actually having a go at me, you’re actually trying to help me improve the way I provide my advice. And that’s, that’s a key outcome. A fourth one is, it’s not, it’s not just about the the advice or the advice process. It’s about helping advisors improve and change their behavior, if needed, and or allow the licensee to amend the template or the SOA if it’s not quite up to scratch.

Peita Diamantidis
Right. And I think what I like about that two is is lucky say, having been of course on the other side of that with as an advisor, then they can historically and we’re talking years ago now, but historically, there could be a lot of just No, no, can’t do that. Well, well, that’s not helpful because I don’t know why I can’t and therefore how do I learn how not to do it in the future? And so I can see like you’re saying there’s a lot of learning but I think a lot of learning for even the compliance people to go, Alright, I need to be able to have it. Here’s the context. But of course, you know, this, this context is law that is still very broad, but it just gives us framework for that to go. This is the point we need to debate now. Right? This is what we’re debating about. Okay, let’s talk that through, as opposed to just know, yeah. Which isn’t helpful for anybody.

Joel Ronchi
Right? Correct. And then the licensees get to take some learning out of it as well. So when they consume the fourth line, you know, the reports of the individual SLA level, but as the data collects and collects the licensee, you can start to see from their dashboard, the any themes, any roadblock, we’ve got a top 10 issue, for example, as part of the as part of the dashboard. And what it allows the licensee to do is they can look at it and say, well, is that a SOA template issue? Do we need to change? The way our template structured? Is it a? Is it a policy issue? Is that Is that where are we telling advisors to do things a certain way, which we shouldn’t be doing? Or is it an individual advisor, challenge, and do we need to maybe put some more resources in coaching into that individual advisor for whatever reason, real power to kind of manage their risks internally, and a you know, real time kind of scenario and make changes as needed suited to their needs.

Peita Diamantidis
I mean, the difference of using it before advice becomes live, what a bit of expression, you know, it’s that difference between, you know, an accountants report, which is looking backwards, the problem with those things is, there’s nothing you can do about that it’s the years gone, right? Next year. So to change our perspective on this and go, alright, this is what we think we’re going to do, let’s run it through a system that will give us some feedback, just let you constantly upgrade the quality, like, I can see that being an a wonderful tool for new advisors, like go away, right, whatever you like, we’re going to run it through this system. And I’m I’m betting that it’ll come back like those horrible, you know, English, red marked ups, like the first time they do one, it’ll just be done. Like, here are the problems. And then over time, you know, they’ll learn where they need to adjust. And truthfully, that’s the best way to learn is to just revisit over and over again, keep on revisiting get better, you know, each time. So it’s quite given how many professional year people we’re going to have to try and put through this industry to meet the need to have something that sort of facilitates that, that sort of feedback loop. I think it’s powerful.

Joel Ronchi
Yeah. And that’s where licensees is down to us for fun as well, is in the professional year. So when they’re in their provisional advisors status, and they’re generating this aways, so they’re all being prevented through four, five as well. So really, it just allows, again, it’s about our licensees being able to utilize their resources in the most effective way, because it frees up the supervisor, for example, instead of them having to, you know, physically check the device themselves against checklists, and whatever they allow, they allow for fun to do that. And then the supervisor uses that output as a coaching collaboration tool. And that’s what the professional is designed for. Yes,

Peita Diamantidis
yes, exactly. And in fact, to date, you know, there’s, there’s a limit to how many tools we actually have to help the professional year. I mean, it’s a bit bare, if you know what I mean, the bones are a bit bigger, because this thing’s new. And then it’s natural, but, but I do think this type of thing that, like you say anything that can provide a framework and and sort of context for a great discussion is so powerful, you know, that’s when people learn. And that’s when people have been around for years learn to, you know, I mean, it’s, we’ve got to stop telling ourselves that we know everything, or anything that we’ve learned, we’ve potentially retained everything, it’s not possible. It’s just simply isn’t even the volume of information we’ve all got to absorb. So we’ve got to keep, you know, relearning

Joel Ronchi
and any amount of changes that arise industry.

Peita Diamantidis
It’s ludicrous. So So you know, anything that sort of prompts that I think is really, really good. I’m sort of curious on your take, then, you know, when the announcements came out that there might be some in the future, there might be some significant changes in terms of say, documentation and or advice, because all sorts of things, then, you know, is that where you’re seeing potentially a shift to, you know, everything leading up to that point. So you know, the rigor of how we’ve documented and put together everything that leads up to the advice documentation, because that might not quite be what it was before. Is that sort of where you guys are focusing?

Joel Ronchi
Yeah, it’s a good question. So I mean, it when I when I kind of saw some of the webinars with Michelle Levy, and read the Cuellar, and all that kind of stuff. It was funny because I looked at and thought, Oh, well, we’re kind of doing that already. Like, it doesn’t really matter if it if it’s a 40 page SOA or a two page letter out to the client or whatever, because what the four find system is doing is actually looking at the process that’s followed up until that point, because it’s always just an outcome. It’s just an outcome of all the things that are done preceding that before the button is pushed in and the documents generated. So, so absolutely. So that’s where I think the industry may go in terms of you know, moving away from analyzing the SOA is the focus and moving towards the the analysis of the of the process of evidence decision. If the price of Yeah, correct and, and also, you know, moving into other areas in the in the future like the the quality of advice review might lead to where a situation where it’s always either Well, there’s always as we know them today a thing of the past and it’s, it becomes easier for letters of advice to be given and a couple of pages up to 10 pages depending on the, the advices that are given and all that kind of stuff. And it may actually encourage, you know, innovation in the way that advisors deliver the advice. So the process still needs to be followed. But it might actually generate some innovation around well do we do it like the FPA through the video kind of process, or there’s a couple of players out there in the market that are, you know, looking at digital presentation solutions. So as your viewers probably listeners probably know, around life preserver they had that ROA solution with F YG. Recently, and there’s an IKEA in the woodwork. There’s some other players in the market who are looking to do a similar thing on the SOA front. So it’s exciting times and you’re spot on, right? It doesn’t change the process that needs to be followed to get to the end result, whether they change the legislation, whether section 961, B, G, H and J and all those things change, that’s fine. That’s just the nuts and bolts, but the process is still the same, it hasn’t changed. Since I’ve been in the industry, which is you know, in the mid mid 90s, the details might have changed behind the scenes, but the process is still the same, you still got to engage, still got to listen, you still got to understand, you’re still gonna use your expertise to craft advice that’s suitable to the client in the best interest, whatever words you want to use. And it’s that process that is important, because if you follow the process in the right way, then the end result takes care of itself.

Peita Diamantidis
It doesn’t I think the other thing I’ve realized, and we’ve just, you know, realized that this internally is advice or the machinations that go on in advisors head, you know, when they’re sort of constructing and analyzing, the more you can get that better down somewhere, you know, internally, potentially, but somewhere, such that anybody can go back to or step into or need to take over for a moment and can see exactly why you got to where you got to they can take the next step easily. They can like the you know, this rigor of the evidence of your thought process, which is probably something that hasn’t historically been, particularly as well done as the focus on the SOA right, that was always the thing that was make sure that Scott, whereas the rigor on the how the hell you got there, to me has an efficiency impact as well. Because the more rigorous that is, the more you can have somebody else stepping into elements that they can take over, the more we can have people on maternity leave or part time, the more we can have, like all those things are all possible when that evidence is is really clear. And that sort of lead up is something that’s easy to just step into. So it’s exciting to see, you know, tools like this that are starting to focus a bit more on that rather than just the advice documentation.

Joel Ronchi
Yeah, yeah. That’s good.

Peita Diamantidis
So then, okay, so are there any practices to date, and let’s focus on sort of practice level rather than licensee level that you find this works really well for versus others where it’s a bit of a struggle to sort of use or implement the tool?

Joel Ronchi
Yeah, look, it’s at the practice level, I suppose. It’s almost like to two levels of practice. So there’s, there’s a small practice where you’ve got maybe two to five advisors in the practice. Often, not always, but often there’ll be multidisciplinary practices. So a bit of a county, maybe a bit of mortgage broker, maybe all three. And, and because they’re doing things really well with their clients, and they’ve got great systems in there, they optimize their internal resources in terms of technology and human capacity. They use for fine really well in terms of preventing so that’s, that’s the perfect kind of way, I see that I’ve seen it a lot over the last 12 months especially where they’ll because they’re, you know, putting through you know, at that level up to five A ours, their volume of SOA is that a generating per month. It’s very economical and affordable, put it through fourth line without a problem. And the turnaround and it fits into the vise process and the engagement with the client. The other the other end, I suppose, is your slightly bigger practice. So you might have, you know, 1010 plus or north of 10 advisors say in the practice, and what that what usually happens there is will be it’s usually the practice manager or the or the practice principal come to us and they’ve just hit capacity. They’re just so stretched, that they can’t you know, the person spending all They time peer reviewing SOPs before they go out the door. And they’re worried that a they’re missing stuff and be they’re not using it using their time awkwardly. Yeah, correct. So that’s where fourth line allows them to take back their time, still have complete oversight of all their, their, their advisors. And it also allows them to risk manage their advisors at that level as well, like some people might need a bit more hands on oversight. So they might be, they might be put through fourth line a bit more than say, you know, maybe the principal who’s been around for one time and they’ve do the odd review 345. But they’re happy with the way they’re going there. So, so it allows him to do that often to licensees and practices that still doing the what I call the traditional backward looking post advice, or it’s as well, they still do that it’s part of the process, part of how they manage their risk, and also sometimes reporting for PII renewals, and all that kind of stuff. So it allows them so I’m still amazed, to be honest with you, I’m still amazed that I speak to a practice or a licensee, and it’s like, so tell me about you compliant structure, what are you doing blah, blah? And they’ll say, oh, yeah, we do, you know, two, two random files per advisor per quarter over the course of the year backward looking. And it’s like, really, I mean, that’s your expression of the risk there. Yeah. So So allows them to kind of now we can scale that up a bit more, and allows them to get a better feel for what’s going on. And also, ironically, hopefully, not in a large way, that allows them to meet their breach reporting obligations and identify issues and, you know, put them through the system to ASIC in line with what’s required.

Peita Diamantidis
Yeah, yep. Absolutely. And so if somebody’s sort of thinking about becoming a client, or they’re curious about it, then is there anything that you consistently see that they should be doing even before they like, you know, you probably need to just do this, you know, before you actually take on a tool like this, is there anything you see that, that, you know, either practices, wish they did, or? Or they consistently, you know, is a gap before they start using the tool?

Joel Ronchi
I, to be honest with you? I don’t? I don’t think so. But what I think the way I’d answer that, though, is, I think, what from past experience, though, the one thing I would say is, or the advice I would give is, you know, federal licensees, just just make sure you’ve got oversight of what’s going on, you know, make sure you’re, you know, using technology as best as you can to, you know, inform your adviser network, you know, it’s very different if they’re employed advisors versus versus a network of self employed, advisors. So just and also having structure to how they manage their advisors. Yeah, have a have a strategy, basically, have an advisor management strategy. I’m still surprised about how many don’t, and, but I completely understand because, you know, in the world of small business, especially when you go from starting from scratch and growing it and going through all the iterations, you know, sometimes you just pedaling very, very hard and you do things very, very well. But it’s sometimes, you know, you don’t step back and kind of take that high level overview. And so well, what could I do better? What can I do better? Yeah, so yeah, so I probably wish that just be saying, make sure you’ve got oversight of you guys, we’ve got someone to kind of structure in place. And just have a think about, if you are going to use a tool like four or five, have a think about how you might want to use it, once you engage with it. And part of the onboarding process we do is we help clients think through that they’ve ever called before find strategy. think through how they’re going to use it and what they want to get out of it. And you know, that first probably, you know, three to six months of using for fine, it’s a real learning a positive learning curve for them. Because it’s not just about putting files through getting reports and ticking the box, it’s about getting the reports from fourth line, and then interpreting the results and actually applying it back into the licensee and the advisors. And that’s, that’s the key. And that first three to six months is really important. And we help them with that as well. So part of the service offering we do through for finance, is that if a licensee has a question about a particular flag and a particular report or a particular theme that keeps coming up for a particular advisor, we talk with them through it. And so we say, well, this is this is why it’s coming up. This is some of the issues. And they might say, Well, how do how can we fix that? And we’ll say we’ll look some best practices from what we see across the industry or this or that and so they can then work that back into the way they can things.

Peita Diamantidis
Yeah, absolutely. And I guess, I mean, one of the things I’ve seen that sort of, it’s probably that mid size practice, you know, so it’s more than just a few generally with a few there’s going to be a Lee Don’t like a distinct leader in that there’s probably even trying the others, you know, so there’s some so in terms of consistency or methodology, it’s almost subliminally passed on, you know? Yes. But when they get just that next bit bigger, and you can see, you know, but I don’t do it that way you like, that’ll be an expression that I’m sure from some of the advisors and it’s natural, you know, we will have ways we approach things or methodologies, even just investment methodology, but I’m betting what some of this sort of feedback comes out is, it’s clear, you do need a methodology across the practice, this is how we approach these things. Now it can have rigorous debate, you can revisit it all the time, get all the advisors in a room, lock the doors, don’t let them out to lay glory. But But still, I think, you know, those across the board for lots of things, you know, those methodologies that have some considered thought behind them, are the sort of thing that’s going to come out of these sort of processes, because you’ll just see those differences. It’s like, why, why are they doing that so differently? Like that? That doesn’t make sense, you know, correct. Correct.

Joel Ronchi
And, and the fourth one report highlights those differences, and then allows the licensee at all the practice to say, right, okay, here’s some of the issues. Here’s, here’s why their issues are right to overcome this. This is how we’re going to approach things going forward. And and you’re right, like, a lot of practices will have monthly or quarterly catch ups, where they’ll look at the feedback from the fourth line system, and say, right, okay, do we need to tweak anything? Are we on the right path? What does this mean for the way we do things? And so it’s a real kind of iterative process?

Peita Diamantidis
Yeah. Perfect. And so talk to me about integration. Does it does firstline currently integrate with any other tools out there?

Joel Ronchi
Yeah. So we’ve got open API’s. So there’s no problem with, with software and other platforms integrating into, into for fine? We’ve got, we’ve got a client at the moment who uses the API’s really, really well. So it’s actually compliance consultant in this in this particular example. So so he’s got clients, he’s obviously services and then uses. The fourth line is almost like the back end to help him scale up his business. Yep. And yeah, beautifully, just, you know, push and pull through the API’s. And so yeah, absolutely. No drums whatsoever.

Peita Diamantidis
Awesome. And look, that expression open up open API, I’m so pleased, it’s starting to become more and more common in the industry. It was always something that was seen as well, that’s not possible. Why would we ever be? So yeah, you know, it’s exciting and necessary. It just needs to be you know, now, I’m assuming I think I know the answer this, but I always ask in terms of client engagement or anything like that. This is very much at the advice practice licensee level. So aside from, you know, fantabulous advice being the outcome, I’m vetting, there isn’t any awareness or sort of visibility for the client of fourth line in that sense?

Joel Ronchi
Yeah, correct. i Yeah, I’d agree with you absolutely. on that. So in terms of the client experience, it’s really just get there, they probably won’t even notice it. But that what that what’s happening is that over time, the advisors processes should improve, which hopefully leads to quicker turnaround, smoother turnarounds, all that kind of stuff. So that over time, there’ll be consistency in what is delivered to the client as well. Yeah. But yeah, in terms of what the client sees, now, they probably know what’s going on.

Peita Diamantidis
But as most reg tech, I’m betting, that’s the case. So in terms of people currently using it, is there any of the features you feel just sort of are getting utilized, that people are just sort of not taking advantage of that you think have value?

Joel Ronchi
Yeah, absolutely. So within the platform, so we’ve got a couple of functionalities within the platform that allows the licensee in the practice to tailor the outcomes to themselves. So one is we allow quest question we allow the the practice or the licensee to, to almost build their own questions. Okay, they can they can put in their own questions that are, you know, policy or procedure related internally, so that they can ensure that every piece of advice that goes through for fine has that wash over through it. So it’s not necessarily regulatory or you know, ASIC related or anything like that. So, classic example might be a licensee or practice saying, you know, are the other fees associated with this SOA greater than $15,000? Okay, and that’s just a nice simple example. Because of what if it if the answer is yes, then what that means internally with the Licensee or the practice is that gets flagged by them and pushed up the chain. Even if the score out and for fines are brilliant. It’s just a an internal mechanism. So so that’s that’s probably something our larger licensees use a lot more not not a smaller license, that is the other the other kind of functions within the platform that are used to to pretty good degree but not vertical support is the report can be turned into a live rectification plan effectively so, so when the when the when the report comes out and for fine, it’s, it’s a like any report, it’s it sets up the information set and it’s static. And and so let’s say there’s maybe five risks that have been highlighted through the through the fourth line system, there’s these optional extras, all these extra their functions there, that where you can turn it into an action plan by adding notes, to the practice can add notes against the risk, they can add notes to tell someone to do something. So for example, if it’s a paraplanner, they might say, and let’s say it’s I don’t know, the scoping of the advice is the issue. So it might say in the notes, you know, paraplanner, can you please visit the fact file and file notes and, and look at the comment and update the scoping section or something, I’m just paraphrasing. So that allows the practice of the licensee to build out that report into A into live rectification plan. Then the paraplanner gets a copy of the of the the report, they go through update the SOA submit it back to the licensee or the practice. And then they can sign off those or cross check those updates against the report. And then they can literally accept the risks that have been identified. So they close off the report really, really powerful for preventing that. And that’s how a lot of our clients are using it is there taking the report, creating this wide rectification plan, getting it all resolved, and then signing it off through the platform. And what ends up happening is the whole history gets gets recorded there. So an initial report, the work that’s done, and and then before it goes out to the SOA, so it’s all kind of signed off. And then the SOA can go

Peita Diamantidis
out. Fabulous. And you once again, just rigor you know, it’s just all there and easy.

Joel Ronchi
And flexibility. So it’s Yeah, and flexibility. That’s the key, because every licensee in practice kind of does things differently a little bit. And everyone’s got some some, some licensees have more liberal interpretations of things than other licensees, for example, and the platform allows them to kind of cater for it the way they want to.

Peita Diamantidis
And so if you can, if you can add your own questions, I mean, it could be something if, if you’re you know, if your practice, you’re you’re focused on turnaround, you know, veterans are blown out, we’ve got too many clients, then they could just put in, you know, the date, they had the client meeting where they did the fact find, and then you’ll have the date for when they submitted it. And it’s like, you could just start watching that, like, alright, well, let’s just be measuring this and see. So, you know, it’s just down to their own sort of imagination of what they want to watch and see things which is fabulous. Yeah, okay. Awesome. So, talk to me about what’s on that we sort of vaguely touched on the development paths, but what’s on the, you know, for the future, what else is there happening in fourth line going forward? Yeah,

Joel Ronchi
so building out there, the AI and the natural language processing, all of that is a continual build, and it just evolves with, with technology in the platform. So that’s where swing birds really coming into the fall with as a partner with us. Also looking at, obviously, what’s happening in the industry around the QR. And I’ve kind of touched on it before in terms of, you know, evolving our system to be able to cater for what advisors want to do in the future. So if you know video presentation of SOA is becomes the norm, or if digital presentations of SOA has become the norm, with building out to be able to cater for that. At the moment, it’s just not there. There’s there’s people are still doing the traditional way. But that’s what’s going on behind the scenes where we’re building out towards that. We’re also looking at other other verticals. So mortgage broking is a classic, natural fit, because it’s, it’s a different piece of legislation, but the process and the engagement than the outcomes are very, very similar in so many ways. So that’s kind of what’s on our roadmap, but we’re always taking feedback from our, our clients and the market in general. And then ultimately, if we’re kind of talking magic wand kind of stuff, then the magic wand would be heading overseas into into other markets, and you know, building the model out to be robust enough that it can be rolled out into the US or Canada or the UK or something like that.

Peita Diamantidis
Fantastic. And so then in terms of the picture, then of what I’m sort of hearing back from you that that first stage of development is Would that mean that some of the when a when somebody’s you know, loaded up a document or even is creating a document, they could be getting more or sort of immediate feedback as opposed to I mean, there’d still be some I’m imagining it would come back and report, but some of it could be more live. Some of it could be more. Oh boy, wait a minute, you know, the AI is telling us that that may not be what you want to say there. Is that sort of where you’re heading? Is that what the work is?

Joel Ronchi
Yeah, we’re heading more towards that what I like to call triaging almost like almost that immediate, almost instantaneous triaging of, of risk. So based on a licensees preferences, and that’s, that’s the key, so not us telling them the way they should think. But the licensee or the practice, are kind of having some key risk indicators that they can set, and then allow the system to can kind of flag or triage anything that might want to go on to something further, or just keep going through the usual for fine process.

Peita Diamantidis
Anything else we’ve missed? Feel like we’ve covered a fair bit. Yeah, no,

Joel Ronchi
I feel like we’ve covered a fair bit as well, I don’t, I don’t think so. I think that’s why it’s just, I’d say over the last year, probably 18 months, there’s a lot more awareness around compliance as an advice advice enabler, not not a not a kind of punitive kind of cop on the beat or, you know, naughty, naughty type thing. And I think, you know, the breach reporting for all the challenges is probably bought, for many people in the industry, in the licensees, and whatever, I’ve seen it have quite a positive effect on on the industry, because it really has got people thinking about what’s going out to what’s going out to the client, not just is the SOA compliant, but it has, you know, has the process been fired, and as long as the SOA can compliant, and there’s a real positivity around the industry, as well, I gotta say, with the professional year and the settling down of the exam, and, you know, all sorts of things. I just sense a real kind of leveling of the industry. And now everyone’s ready to kind of take it to that next level. And, and as a result, you know, the feedback and the engagement we’ve been getting from people using fourth line has just been tremendous.

Peita Diamantidis
That’s fantastic. And I do think, even just from your conversation, and what you guys have developed, you know, shifting the mentality from admonishment, you know, at the end of the process to support because that’s really what it’s doing is just support this is, this is just more input, more insight, getting better, making a better outcome, like all sorts of tools we use, then, you know, that shift in mentality will make advisors feel different about using tools, but also just about their advice process. So I think that’s really exciting. Because, you know, to be it to be just constantly wondering, when the, you know, audit 12 months down the track of those doc, like, That’s just insane, right, it just, it’s just not helpful, let alone the fact that often things are then, you know, assessed on a new legislation that didn’t apply for that time device. And like all that stuff, it just got, it gets a bit ridiculous. So you know, that shift in mentality while you’re doing it, let’s just make it as good as it can be. That’s fantastic, and really exciting. So, yeah, well done for contributing to all of that. I think that’s all thanks. Thank you. All right, advice, explorers. If you’d like to find out more about fourth line, then the website link is going to be in the episode show notes along with Joel’s LinkedIn details. So feel free to nudge him on LinkedIn. So you know, thank you so much for joining us, Joe. And I rock love, this sort of contribution that firstline is making to helping will really us build more bionic advisors, you know, which is which we need loads more of more on in the industry. So thank you.

Joel Ronchi
Thank you for having me, Peita.

Peita Diamantidis
So are you or maybe your practice, maybe even your licensee, a current user of fourth line? Actually, you could probably have an ask you may not be aware that that’s what they’re using. And you could hate and that question up the line. If you do and are aware of using that you use fourth line, then, you know, do you agree or disagree with what we covered? I’d love you to share any insights that you have into the tool on the XY community platform, as I personally would love to hear your take. And I know there’ll be other advisors out there that would be curious about how that how fourth one has gone in terms of utilizing it as part of your process, as opposed to something that’s sort of external, and happens down the line. Now, as for my thoughts, look, whenever we introduce a new type of tool like this, right, something that we may not have had some tech to cover before, I think we really need to double down on the recruitment approach to systems onboarding. Now, what I mean by that is, is that when we recruit a new person, we actually give them you know, we go through a process we might give the team a heads up, we’re recruiting somebody and why and what value it will add to them. And also to the practice, generally, we probably design an onboarding and training plan for the person, the new person, or might even do a welcome lunch or some sort of warm introduction to the team. And then we check in with them regularly once they start in that early phase, maybe even as long as a year or two to make sure that they’re making progress, and they don’t need any further input or training. Now, we need to do the same for a new type of system like this something that we’re is new to the team, you’re going to need to give your team a heads up on the new system and how it’s going to benefit them and how it’s going to benefit their clients. You know, definitely design an onboarding and training plan that gives everyone in the team, all of the insights and understanding they need and then the repetition in the training to get it right and be able to use the tool well, then absolutely put in place a structure around both a one on one feedback with advisors and the team learning process, where you do that feedback loop so you can be constantly iterating the way you do things and the methodology you use. And then overall, you know, absolutely check in on how the tool is going specifically as a tech tool, how the team are finding it and ensure that it gets openly accepted into the practice rather than maybe rejected out of hand which can come about when you’ve got a brand new type of tech that you introduce. Now. As we know, there really is only one skill we need to become bionic advisors, and that’s avid curiosity. And so to help you build that habit even further, today’s curiosity corner app that caught my eye is Grammarly. Now you can find it@grammarly.com Then their tagline is help you compose bold, clear mistake free writing, which sounds pretty good to me. Now, what happens is, you can get suggestions from Grammarly while you’re writing in desktop applications, and even sites across the web. Now this can be you can move between different apps, social media, messages, emails, documents, right? Think of this really as live proofreading. And when you think about it, it’s so important we bring both clarity and heart into the way we write for our clients. I think it can be really natural that we get sometimes a bit stiff and awkward. In our written language. I think maybe we think it’s more professional, maybe even more intelligent, seeming, right? So it’s it’s us trying to really give confidence to the client. But the truth is, you know, the most professional person is one that communicate with empathy, heart, and clarity, you know, and tools like Grammarly can actually help us do this and help us really fine tune our writing skills. In fact, you know, the way we write can really make or break a concept we’re trying to communicate to our clients. And this was never clearer to me than when I read an article our amazing Podcast Producer Kieran. Kieran sent me I’m writing this article actually highlighted that Gen Z kids reaction to a thumbs up emoji is that it has a rude meaning to them. A thumbs up comes across with a passive aggressive or confrontational err, several even claimed that they felt attacked when it gets used. Now I was just gobsmacked. If you’re an avid listener to the advice tech podcast, you’ll know that the most popular emoji amongst our guests is the thumbs up. In fact, Joel said it was his most most used emoji as well. Now this is presumably because it’s used as a well done or and I agree sort of gesture or emoji. But what if the audience you use it with translate it into something quite different. Now this is just one example for Gen Z. But I guarantee you there are similar things in either the language we use the punctuation, the emojis and the tone. That will mean what we say will get communicated to that end audience in quite a different way than what we either planned or expected. And this is one of the many reasons why we need to tailor our technology use to who we are talking to and engaging with. So therefore, on the download just between you and me, I’m really excited to share that I’ve partnered with brand marketing an avatar guru Jenny piece to bring you the niche down and scale up masterclass. Now, this is going to be an in person workshop, where to start with Jenny is going to take you through really narrowing down just who your ideal client is not just from your business’s perspective, but also who their client sees themselves, and therefore how you can better engage and communicate with them. And then using all of that, I will then lead you through what that means for your tech stack and your processes in the business. Now the first workshop is going to be in very early 2023 And we’re keeping the numbers small to really maximize the value you can extract from our combined insights. So if you’d like to be on the waitlist, then please do Message me at LinkedIn. Forward slash Peita MD That’s PEITA. MD. And we’ll put you on that list. And you know, we’d love to get you seeing more of your ideal clients that you really enjoy working with. Well, that’s all we’ve got for this week. Be sure to subscribe to the podcast so you’ll get your advice tech fix automatically sent to you each Friday, and I look forward to tuning up turning up in your earbuds next week. And remember advice explorers Stay curious.

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