AdviceTech Leaders Series - Episode 3
With Fraser Jack, Head of Partnerships at Advice Intelligence
Watch demonstrations from 15 local and global AdviceTech suppliers across customer engagement, digital marketing, financial advice and back-office technologies, as they present on the key features of their technology and how it will benefit your business and clients.
In the supplier demos you will:
Matt Heine: Hi, Fraser. Welcome to the show.
Fraser Jack: Thanks Matt. Great to be here.
MH: It's really good to be joined by a fellow podcaster. I'm looking at you at the moment through Teams and disappointingly you've got much better kit than I do.
FJ: So it's a competition already going on hey.
MH: Never a competition. Look, before we kick off, I thought it'd be worthwhile for our listeners. If you could just give a bit of context around some of the work that you're doing. I thought that'd be very interesting to talk about why you podcast also talk about some of the work that you're doing at AI, and also importantly, a bit about your passion, which is goals-based advice.
FJ: Yeah, no problem. Obviously that pretty much sums it up. I'm the head of partnerships at Advice Intelligence, we're building goals-based advice software in a platform, which I love it's my dream job. I also get to talk about goals-based advice with some amazing people on a podcast every week. Having a podcast is great because it pushes you to go and find people to chat to in the space. And not only do I learn and pick up, it's so motivating and interesting for me to have these conversations with people. So I get more out of it than some of the listeners I'm sure sometimes. So that's the way it works. I've been there about three years now and we've been building out this platform and looking forward to bringing it to market.
MH: Absolutely. So we might just stick on pod podcasting for a moment. I've been encouraging advisers now for a couple of years to give it a go. It's actually a lot easier than you would expect. Do you want to just talk about some of your experiences, and I think you've had similar conversations with many of your clients.
FJ: Yeah, absolutely. So the thing about podcasting is it's a familiar long form content. So the fact that when you're talking on a podcast, you're often speaking for 35, 45, 55 over an hour. And you're having these really in depth conversations and you're getting deep into some content. It's what I call health food. It's not that short sugary, YouTube ad, or promo or something on social media. It's a long form digestible piece of content that is healthy. So people dive in and they want to learn something from it, so they're getting into that. So I think when you do that and you do it consistently, you end up forming a bond with the listener, a bond of trust. I think if advisors are doing it with their clients, not only are they giving their clients that long form content every week, or two weeks, or monthly, or whenever they want to do it.
But it's good shareable, knowledgeable information. And if you can provide something that's a little bit educational with a little bit of entertainment, then you've got something that your clients will want to share. And so I think it's a great... For many, many reasons, like new clients coming into the business, for nurturing your existing clients, for many reasons it's a great idea.
MH: So there's some great examples of advisors doing podcasts. Dave Clark from Koda does a wonderful one where he interviews fund managers. Will Hamilton will often give economic updates. What are some of the topics that you see working well for advisors and that seem to be resonating with their clients?
FJ: Yeah, well, I think you've absolutely got to work out who your client is and who the target then market for your podcast is. And then what are the things that they want to know and then how can you be helpful? I think that's the end of the day what it is. So if you're just going to get your head into the space of what is my listener or my client, or my ideal client want to hear, and then I'm just going to be so helpful to that type of content. And obviously there's lots of different ways you can interview people, as you mentioned, you can talk yourself or you can mix it up. There's a lot of so many opportunities. It's like the new way of doing a newsletter, but much more interesting and engaging.
MH: And that's a really a good point. Podcasts are ultimately just another bit of content. I'd suggest probably an easier way to generate content then sitting down and writing an article, which is a very challenging for many people. What are some of the other interesting ways that you're seeing people use content or produce content?
FJ: Well, just on that idea of writing, actually, this is the same thing. I've written so many blogs and stories and thought pieces around goals-based advice, or the industry and those sort of things that never got published. That didn't make it to the end user who... that's the idea of you producing content because you want to be helpful to somebody, and if you don't actually get it out there it doesn't help. I think some of the other ways I've seen things working is really the idea of video. And we've started doing videos of all the podcasts they're 45, 50 minute video, but it's just another way of consuming the content. And when people are working at home as they're doing at the moment, but when people are working and they put it on the background all those sorts of things.
Because podcasts were so good for the commute and they were so good for the walking the dog exercise type things, or doing the chores or, "I've got to do this thing anyway, I might as well be listening to something that's educational and going to grow me while I'm doing this mundane chore." Exercise was a perfect one and the commute obviously was another big one. As people's lives changed a little bit over the time of COVID, so did their podcasting habits. I think that's where if you've got the video as well as the audio version then you might be able to pick up what you've lost on the audio version.
MH: So when would you see them typically watching the video rather than listening to the podcast?
FJ: It's hard to know when people exactly listen to their podcast because they download it at certain times, but you don't actually know when they're there listening to it specifically. We've seen a lot more clicks on the website watching the long form version of the video over this time essentially. I think it's probably because people might have it on while they're working in the background or listening in.
MH: And what sort of advice would you have for anyone thinking about starting their own podcast? Must start with the tech side.
FJ: Yeah. Well, the tech side's interesting because I guess it depends on the level of podcast, but you don't need a great deal of tech. The phones if you want to just record into that to start with, you've got microphones that can just plug directly into your computer. You've got headsets, these sorts of things. And you don't have to go, like I have done over the last couple of years and built on and built on it. It doesn't have to be expensive, firstly. I would suggest that you get something, get a mic near your mouth that's the first thing. Doesn't have to be an expensive mic, but just get it close to your mouth.
And that way you can set it so that you're picking up the volume of your voice, but not necessarily all of the background. You do need a platform, you do need to record it to something. You do need to get somebody to edit it or edit it yourself. And depending on the show, there'll be an intro and there might be an outro and all those things. The technology is not the hard part really. It's just getting a voice down and however the voice starts and when somebody starts speaking, if the quality is not high, it's not great, it's not ideal. But people very quickly get used to the quality after about the first couple of minutes. Whatever it is, as long as it's consistent all the way through people then get used to it.
So the first couple of minutes are a little bit, "Oh, that sounds a bit weird." But then you've figured it out that it just becomes the normal. So I wouldn't let the technology or the equipment stop you from doing it. I would just think you don't even need to have anything. The first thing you need to have is not equipment it's a plan around why you want to do it. What are you going to do? How you're going to do it, how are you going to fit it in every week? Because I think it's more important to get that consistency and regularity with your podcast than it is to have fancy equipment.
MH: Absolutely. And have you found an optimal frequency for your show?
FJ: Funnily enough, I've done a lot of research on this because I like geeking out a little bit about podcasts. We're doing it one a week at the moment. And the reason being is because we're doing the video as well as the audio. And it's a lot of extra work or it's a bit of extra work anyway. So my optimal was around the one and a half to two times a week because after doing some research on stats and how that works, is that that's often the optimal any more than two times a week people don't have time to listen to it. Especially, if you're doing a longer form of show. If you're doing a 10 minute snippets, short form content, then more than a couple of times a week could get you a lot more traction. But anything that's longer than 30 minutes I would suggest once a week is plenty.
MH: And once a month's probably too little.
FJ: Yeah. It's one of those things. If your niche's down, I've seen some good ones where like you said, speaking to an investment manager or talking about your investment philosophy. Where you might find that if it's just you talking about it, then once a month might be okay. But if you're able to bring some other helpful content in, in that timeframe, then I would certainly look at doing something alternatively every second week. And then your monthly one by yourself or something like that.
MH: Yeah. Fantastic. Okay. Probably spent enough time talking about podcasts on the podcast.
FJ: Preaching to the converted there because people are listening to podcasts and they completely love it.
MH: You get to spend a lot of time out in the industry talking to a lot of people. Just interested in, I guess, some thoughts on some trends out there and what you're saying.
FJ: Well, certainly trends changed this year a little bit. Obviously, there was a lot of movement towards setting up some digital processes. One of the things that I find a little bit disturbing is... Advice has come from this place where there's a few things that need to change in it. So if there's been some changes made, but a lot of the time the technology is being sought after to improve efficiencies or do things that improve the traditional way advice is given. And sometimes I see stuff that is a little bit disturbing because it's like, "We've got a really bad system, so let's let's create some tech that improves that really bad system." So now it's super bad. It's like, "Well, hang on a minute, let's start with the consumer rather than starting with trying to improve a system that isn't great."
And then go, what would be the ultimate system for the consumer to have? And let's look at how we can then use technology to provide that. As you'd know, I'm quite an advocate for the idea that the way that we've produced the SoA in the past has been pretty poor. And that we need to move to more of a digital or more engaging way in the SoA hundred page document. Producing a better hundred page document may not be the answer, but producing something that consumers can actually understand and engage with is much more inviting to me. I look at a lot of the stuff the trends that were happening when we went past Royal Commission and then we tightened up a lot of processes and we tried to streamline a whole lot of things, but we didn't necessarily fix the problem. We just tried to make a bad process quicker, so we got to the bad part earlier.
MH: Which sounds simple, but re-engineering processes particularly in the advice industry is very challenging. Where do people start? Is it with the worst process or is it with the one that they can fix the quickest?
FJ: Yeah, that's probably a killer question and I'll just have to answer it with a it depends. I think the answer is sometimes it's about going back to the client and not fixing the process just yet. Sometimes it's about going to the client and saying, "Hey, we want to do this thing. Is that going to make your life easier? Is that going to make your life better? Is that going to make you more engaged?" And if the answer is no then I guess look at really, what's the point of doing that because technology costs money. If you're going to develop it yourself, it costs a fortune. If you're going to integrate it with some of your existing staff, it's going to cost money.
And at the end of the day, you have to pass all that cost back on to the consumer because they're the only ones paying the account or the bill. So it's either the shareholders of the business, which is generally you or the shareholders of your financial planning business or whatever, or the consumers at the other end. And they're the only two that are going to pay for this whole process. So I think the answer is to work out what would be the best way of helping your client and then go down that line rather than just trying to fix up something for the sake of it.
MH: I think that's great advice. Speaking of advice, you're out in the market now pioneering goals-based advice, which is not necessarily a new concept but doesn't generally have a high level of take up in Australia. It's probably a lot to cover in this space, but don't you just want to give a bit of background to why you decided that goals-based advice is the way of the future. And what you're trying to do to broadly spread it across the country.
FJ: Yeah. So, well, I come from the advice background of trying to make my clients love the process that we go through and being disheartened with the way that our industry, and it's come from an industry I know people will say, "But it's a profession now." But it's a product based industry and to be fair that's the way it was. Product providers had product to be distributed, they do that through advisors and this is the industry we've all been in. And clients have been on the outside of that relationship really, the relationships being with the product providers. And so it's no wonder we have this product based mentality. You look at any advisor's websites under what they do and it'll be product based. It'll be, "We do insurance, and we do investment, and we do superannuation and we do..."
They're nothing to do with what the clients end motivations or goals are. And many years ago I did a lot of work with the AFA and we were trying to work out how to increase the two and 10 number of engagement by essentially doing the same thing. Trying to work out how do we have different conversations or whatever it might be. And so that's probably where it started for me and the idea of how do we actually engage consumers in wanting this. So next start with the why? Well, the why they get financial advice is that they can achieve their goals and dreams and do these things. And a big part of what I see every day is that the confusion between strategy, financial strategy and goals.
And so I'm a big advocate of the idea of focus on your client's goals, use that as metrics, have goals under management, not funds under management. Now I know Netwealth, you have funds under management because that's your platform. So that's your job, but advisors, that's not their job. Their job is to have goals under management in my belief. And to be able to track, to know how many goals they've got under management at any one time. What the total value of those goals equate to. And so that they can then promote in an outwardly discussing marketable conversation that we look after this many goals under advice, we're managing this many outcomes, we're managing the goal outcomes.
It's your job to, or the fund manager's job to look after and manage the asset. It's the advisor's job to manage the goal outcomes. If we made that separation, I believe that the way we provide advice, the financial product advice can be so much simpler to distinguish between what was product based advice. And what was client centric advice.
MH: Probably a good time just to pause. And maybe if you could just define for our listeners what a goal is in your mind. So there can be different goals. Some would suggest that most people have one goal, which is when they see a financial planner to retire with as much money as possible. How granular do you actually get when you talk about goals under management?
FJ: Well, this is the thing. If you want more funds under management, you need more money. If you want more goals under management, you go more granular when it comes to the goals. So often I hear people say consolidating super, or reviewing my insurances and to me they are not goals. They are financial strategies. So I think the first thing to do when you want to work out what a goal is, is to start with the idea of the advisors know financial strategies. So let's just start there. If there is any financial product or any strategy involved, it's not a goal. What would that do for the client? What are the outcomes of that strategy? And so when you're talking to the client, it's things like, why do you want that?
And examples, I use all the time ere things like, you want the outcome you want... "I don't want to pay school fees." That's not the goal. What you want with school fees is you want to provide your kids with an education that maybe you didn't have access to. You want to provide them with an education and opportunity that's going to set them up in life that's the goal. Paying the school fees is not the actual end goal. Paying the school fees is part of that process to get them where they want to be, and therefore saving the money, or investing the money, or getting the money in some way for the school fees becomes a financial metric and a doing plan. But once we're in that space, we're well and truly out of the goal zone.
MH: And when you start talking to clients about goals and particularly with that lens. It's much more of an emotional connection to the goal rather than a financial connection. That might be uncomfortable for some financial planning practises. Does it change the skillset of those practises, or do you need different people to be having those conversations?
FJ: A bit of both depends on the advisor. So every advisor I know, and have spoken to, wants to help their clients. They all want to help their clients. And they do it with the thing that their most comfortable with, which is often financial metrics or numbers. But there are other people in their office, or they can get somebody else, or they can learn the financial behavioural side of it to help their client. And some advisors lean more towards that in fact. And then they want to do that part of it more because they can see... The emotional side is actually the more rewarding side when you see your client's emotion coming back to you. So I think I haven't seen too many people who don't want to go there.
It can be a little bit uncomfortable because it's like starting a new relationship. How do we work this new relationship, but essentially the outcomes are much more rewarding. I haven't really seen too many people who don't want to be better at having those client relationships. Obviously there are some people who are introverted and just like the numbers and just want to deliver that and that's fine. I would suggest in those situations that you partner with a life coach, or somebody that can do the soft skills side of it, or the emotional side of it. And you never know if that partnership works, they'll be introducing their existing clients to your financial advice service, and you'll be using them. So either internally, externally, there's a whole lot of ways of doing it, but I guess it's just a matter of don't just ignore it because the clients still have feelings.
MH: Absolutely. And you hear stories about clients ending in tears in that first meeting when they actually sit down with their partner and really identify what the other person wants from life in relation to their goals and dreams.
FJ: Yeah, absolutely. And that's certainly, you hear a lot of stories of shock around what one partner believed was the path that they were on and then what the other partner wants. So there certainly can be a counselling side of it.
MH: So going back to the original question about goals under management, so how many goals typically at a granular level would a client end up having? Is it a legacy goal, an education goal. Acknowledging that there's bigger outcomes than that? What's the typical number of goals that you would manage to?
FJ: I think about eight to 12 is the number. There's definitely always long term goals in there. And that's what you want. You want to have striving towards these longterm goals and being able to understand how your habits and behaviours affect those goals. But you also want to have a lot of short term goals, things to focus on in the short term and goals in different areas. So some things might be about you, some things might be about some travel, or some things you want to do. Other goals might be around different people in your family or that you want to help. Some goals might be financial and so it just depends, but it's good to have a bit of a selection from different areas to focus on at the same time.
MH: So given that many of the goals will actually not be financial related. Are you seeing any interesting developments where advice firms are offering broader services than they may have historically?
FJ: Well, a lot of goals would have some sort of financial realm to them but they don't have to be a large financial realm. So some goals could just be around finding an excuse to, or getting permission to go on that yoga retreat. Or do things that you can afford, but you're just not sure if you can, or you can't. So it's around that certainty piece. And in that situation, I would encourage advisors to have that list of a hundred lifetime goal achievements or a bucket list or those sorts of things, and to be able to start there and then put some parameters around the longterm ones when you do the prioritisation. So what are the things that must be in there? And then what are some of the things that we can introduce that are nice to haves, or wants that you can actually give the client's permission to have?
Because that actually sets up a pathway of credibility around helping them achieve a few goals. It also gives them something to talk about, something for them to post on social, something for them to say, "Hey, my advisor did this and help me go on this holiday." Or do this retreat, or whatever it might be. And then getting those initial goals out of the way. And then next year you can bring some more goals in. So it's about getting, a lot of different goals in there that are filling different emotional values and needs for the client.
MH: The theory sounds fantastic. The adoption has been low in Australia and the implementation can be very challenging are the two linked.
FJ: There's probably a whole lot of other factors. The fact that there is a stack of other change going on at the moment and there is only so much change you can do at one time in your business, unless you want to throw everything out and start again. But obviously education standards, compliance and getting compliance teams heads around how you're doing things differently. Retraining of staff, if you've got existing clients, then going back to those existing clients and saying, "Hey, when we do the renewal, we're going to do things a little bit differently in retraining them." So it's not a small piece of work changing your business model, obviously. And amongst the fact that there's so much else going on at the moment with, obviously, different education standards and changes in legislation and all these sorts of things.
So I think the adoption has been... Well, it hasn't necessarily been slow because definitely the itch is there that advisors want to do it. It's just a matter of, again, how do they fit it in. And often the methodology has been this... It's been a philosophy. There's been no real practical, tangible steps. You can't just go and say, "Well, how do I do it?" And so part of what I'm trying to do is create the easy steps for advisors to go, "Oh, I can just insert that there, insert that there and start running with it."
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MH: And if we just look at the tech side for a moment, again, the implementation of goals-based advice can be very challenging. You're having to collect, report and manage to a very different metric to what you may have historically. And more importantly, many goals are actually linked to each other and those linkages change over time. Do you think that's been a major impediment to the broader adoption outside of some of the other changes you touched on?
FJ: Yeah, there's definitely a little bit of re-understanding of how you do your progress, or review meeting with regards to having different investment portfolios for different goals and different timeframes. But that, stuff's not really that hard to get your head around if you've got good systems and processes in place. And as you said before, if the technology can separate those that are reporting out for you to be able to present to your client. This money over here that's for that goal, it's tracking, on track or it's off track. Is it just the investment that's pushing towards that goal or do we have cash flow going in as well? And how's that working? So definitely technology is going to just make that a lot easy for advisors.
MH: And what are some of the things that you're doing? Are you working with advisors, coaching advisors, or how exactly are you trying to spread the word so to speak?
FJ: Yeah. So obviously outside of the podcast, we're doing a Goals-Based Advice Academy to talk about this exact thing. So to be able to say, "Well, try this, try that here's some other things." There are quite a few advice coaches around in Australia at the moment that are helping firms set up goals-based advice, which is great. And obviously, we're trying to build out the software so that it's out of the box almost for advisors to be able to produce goals-based advice.
MH: Are there companies overseas say that you look at and think, "Wow, they're doing it really well."
FJ: Yes and no. Look, I think everybody, there's definitely a lot of people trying to do it well and people have different systems. And you can pick up on the system and run with their system. But the problem has always been in those systems they don't necessarily supply the technology. So I have seen a couple, I've seen one in Brazil that's doing amazing job in this space with regards to looking after many families and they've produced their own software. And based on just because of the size of their business, they were able to do it. They're a business that looks after about 800 families, sorry 8000 families, and on the way to helping over a million Brazilians. So they've got the size to invest in the software. But it's been very difficult for businesses, I guess, to create the software around what they're doing, if they're a smaller business.
MH: And charging for goals-based advice, moving away presumably from asset based fees.
FJ: Yeah. So I've seen a couple of models. And one which I found interesting lately was a model around the charging based on the client's monthly income. And I've also seen people around the idea of how do they then charge for the goal outcome. As we said before the idea of goals-based advice is you're focusing on the outcomes. You're focusing on the achievement of those goals. You can put a value on those goals. If you've got eight or 10 goals and one of them is a retirement goal and they're longterm, it can be, I don't know six, eight, $10 million is the goal outcomes that you're looking to achieve. At the end of the day you need to be able to show that you're providing value to your client. And I believe that in goals-based advice, you're managing those goal outcomes. You're not managing their existing assets.
MH: And just finally, what's some of the advice going back for most of the questions around podcasting, what would you suggest to advisors that are interested in goals-based advice? How do they get started, who do they talked to you other than you?
FJ: Other than me? No, I'm just kidding. So there is a few around, I mentioned recently. Keith Abraham has got a great goals website where he talks about, 100 lifetime goals, excellent free resources there. There's a website called lifegoalcards.com, which provides a system around how do you practically use the cards with your clients to help find and list their goals. There's certainly a lot of advisors around Dean Lombardo, one of them mid local Melbourne boy, who's doing some great work with goals-based advice and advisors. We've had a lot of business coaches on the show over the years that can help out. But essentially it's around starting with what do you want to achieve? What are the systems, the processes that we need in place? How do we create the methodology around what we're going to do? How do we bring all the staff on board and then looking at the system.
MH: And for those who you wanting to have a listen to your podcast, where do they go?
FJ: To my podcast. The Goals Based Advice Podcast, essentially, it's where all the good places where you can get podcasts in the Apple and the Spotify's of the world. Or if you want to check out adviceintelligence.com, there is a podcast section on there under the resources tab or the Goals-Based Advice Academy tab. And you can certainly then watch the videos as they come out each week
MH: Fantastic. I highly recommend checking out that website, if you are interested in goals-based advice, it's certainly getting momentum. It makes a lot of sense. And thank you very much for your time.
FJ: Thank you.
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