AdviceTech Leaders Series - Episode: 2

With Shane Nicholas, Director at Innate Wealth

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About the podcast

Shane Nicholas, Director & Financial Adviser at Innate Wealth chats to Matt about his balanced approach to selecting the right AdviceTech to meet the needs of his firm, key learnings from being an early adopter of Xeppo and what advice he can give firms looking to build an integrated AdviceTech stack.

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Matt Heine: Hi, Shane. Welcome to the show.

Shane Nicholas: Thanks Matt. Great to be here.

MH: Now, Shane, just before we kick off, can you just give us a little bit of background about yourself and also the business?

SN: So we're probably not dissimilar to many financial advice businesses, where we have our own AFSL, we're a multi-discipline firm. So we do provide accountancy services as well, which, segue a little bit, is what's driven a fair chunk of our advice technology decisions, but the areas that we look after specifically are essentially private investors and we do an awful lot of work with small business owners as well. Naturally, being an accounting firm as well, that's a key component of what we do.

MH: Shane, we've known each other for a long time, and I think it'd be fair to describe your firm as curious when it comes to technology. So we've caught up many times over the years and had some good discussions about the technology that's out there, which has obviously changed a lot in the 10 years. How have you gone about implementing technology in your business or what is the process to ensure that you avoid the new shiny toy, but actually get something of real value?

Well, I think your words there, Matt, are very apt because I can suffer sticker enjoyment when I see things out there. So it is difficult. But I think, for us, one of the things that I've learnt over the last 10 years and particularly over the last five years more so, is that we've essentially tried to break our technology into two distinctively different decision-making processes, where we talk about the hardware, if you like, and the servers and getting rid of all that stuff out of the business, and focusing on the operational aspect of what we physically need to be able to do business.

But then secondly, looking at software and specifically how that software actually comes into the business itself. And it's probably that part, which is harder, I feel, than the earlier decision-making around how we actually put our technology together. But it is a piece of difficulty not to kind of get caught in the headlights and everything's new and keep focused on trying different things without being disappointed with the outcome that doesn't necessarily look and feel like you've been told it will look and feel, when it's all said and done.

MH: A quote that's probably overdone at the moment, as part of the current pandemic is, "Never waste a crisis." I remember a few years ago, your office flooded. Did that change your approach to technology? You mentioned before you sort of split hardware and software, is that why you've gone down that path?

SN: Well, it's probably fortuitous actually, in a way. We were already well down the path of separating out those two decisions around that time, but certainly, the flood taught us a valuable lesson in that we need to be able to operate and move quickly in event of a crisis. And thankfully, through COVID, we haven't had any disruption to our technology at all. And we were able to make a decision back in March, I think, or April, losing track of the time now, but to close the office down, basically on the spot. On a Sunday afternoon, Luke and I had a chat exactly like this. And basically, decided to mobilise a team as of the following day into their houses and we had no disruption. So we're very grateful for being curious about it in hindsight.

MH: Absolutely. And when it does come to decision-making, you've touched on that a couple of times now, is that a board-driven decision, or who takes ownership for technology in your firm?

SN: I probably wear the mantle of the tech nerd in the office, proudly, I might add, but invariably, we all keep an eye out for certain things. But what we do ultimately come back to as a partnership is we all collectively decide in terms of how we implement technology and what we spend the money on. But I think, broadly speaking, some of the things that we've tried to do is just all of us keep an eye out. And invariably, if an idea is generated or come across, it comes under my desk. And then I'll be the one that's kind of interested enough to go and have a conversation or explore a bit further. And if I feel as though it's got some value to explore, I'll then put a bit of a business case around that and put it to the guys and have a conversation accordingly.

MH: Given that you do have different people running different departments or different areas within your business, you've got accounting and wealth, presumably very different needs, have you got a good oversight. How do you build the stack based on the fact that you do have some different requirements and different outcomes that people are trying to achieve?

SN: Well, I think, Matt, that's probably in truth, I think that's probably the hardest component that I've come across is trying to build a technology solution that deals with accountancy and financial advice, because they are so, so different, and even down to the really nitty-gritty, granular level of a timesheet. One of the things that accountants historically love and thrive on is using a timesheet, whereas as advisors, we don't. So it's kind of, there's some real significant nuances in that.

And I guess, ultimately, what we've tried to do is pair it back a step and sort of focus on the client outcome first and foremost, and not necessarily get caught in the nitty-gritty of what do I do and how do I want to do my job and keep crunching away doing what I do, and try and look at it through the lens of what client experience do we want to be acknowledged with our business and then try and make a decision accordingly.

And I think that's probably the... Which sounds obvious when you play it back, but it doesn't always translate that way when you're actually making decisions.

MH: And presumably, with that in mind, the CRM has become very important, so that you're aware of when a client might have a accounting meeting, or vice versa when the accountant needs to know that they're coming in for a wealth management meeting.

SN: Yeah. I think that that, Matt, I think, it was probably one of the best decisions that we made, I feel, to have a CRM across accountancy and also advice. It's been a difficult one and it hasn't been perfect, I might add, but having said that, when we first acquired an accounting firm back in 2014, I distinctively recall going to a client's house to see them, and them giving me an envelope they'd received from the accountancy part of our business a day earlier in the post. And my face went bright red with embarrassment. All I could say was, "Well, thank you." And you apologise, "Oh gee, I should have brought it with me." And made a bit of a joke about it, but I left there thinking that should never happen. And we've tried our best to make sure that doesn't happen.

And essentially, it still doesn't result in a perfect solution with a CRM where we operate from the same platform. But having said that, you give yourself a chance, I think, to be able to operate workflow out of the same place so that even those nuances and phone calls that come through, you take a call and someone's, "Oh, how's my tax return going?" You can actually log in and see just very quickly where it's at as compared to saying, "Look, I'll get back to you and I'll go and check with the accountant and let them give you an update." So it's just those little things about managing relationship, I feel, that the CRM has helped with quite considerably.

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And when you look at your current tech stack or the key systems in your business, do you just want to give us a bit of a run-down?

SN: In terms of the technology that we use in the business today, we've got a lot of systems, in truth. We use a Salesforce provider for our CRM. We then use Xplan, as most advisors do. We use Xero for our accountancy, but also we run our business through Xero as well. So there's two components of Xero that we use. We have Class Super for our SMSF component, then we have a number of smaller piece of technology that we hang off of all that to try and solve a small problem.

And I think that's probably the learning that I've taken on board through many years, and we've had a different crack at different softwares, but often it's those small pieces of technology that actually provide the biggest outcome, I feel. And I think that's kind of the focus that we've got going forward with future decisions is how do we actually find technology which is specific to a solution we want it to solve as compared to try and find that silver bullet, that invariably doesn't exist.

MH: We might come back to that in a moment, because I think that's a really interesting point. Looking at some of those core systems that you've just touched on. How out of 10, would you rate the integration at the moment?

SN: At the risk of sounding very rude, Matt, but can we have a negative? But invariably, they don't talk to each other. We've been on a little bit of a journey in recent times with Xeppo to try and build a data or utilise their data-warehousing capability to connect all those systems together. And I think this is, again, a key learning that I've been on in time is that I think when Xeppo first came out, we had a crack at it five, six years ago.

And invariably, at the time, was right at the time when we acquired an accounting firm, we got all our data into the one spot and it was kind of cool, but we got it there and thought, "What do we do with it?" And it was kind of, I think at the journey of our business at that stage, we weren't quite ready or understanding fully what that solution could do for us at the time. So we turned it off. We were one of the beta sites with Paul and his team and we turned it off because what it didn't do for us at that point in time was change behaviour within the business. And that was a challenge that we were trying to overcome at that stage. But I think, here we are, five, six years later, we're just at the end of implementing Xeppo again into our business.

And just seeing just yesterday, I was looking at the data that's starting to be aggregated, it's been really interesting to try and get some of that synergy you talk about. And you know what struck me yesterday, Matt? This is a real number. I was looking on our Xeppo site and it said, "There was 1,532 discrepancies of data," across all those systems that I've just described and you go through them and they're as simple as phone numbers different on site, on Xplan versus Class Super. Or Class Super's got the PO box, not the mailing address on Xplan. So that stuff that's really kind of simple, but it's so different across all our sites.

MH: So there was a thousand discrepancies, across how many clients?

SN: Well, there's about 500 active clients, about 2,500 entities. So it's a high portion of discrepancy, right? So probably every client file, every other client file, has got a data discrepancy of some description. It's those things that invariably lead to our client experience issues where you might have sent the mail from one system to their PO box, but it should have gone to the residential address. So something so simple as that, invariably can create an issue at the other end.

MH: I think it's fascinating, and equally so, you were about to go down one of the learnings you had from that experience, I'm just trying to work out. Was that learning that you're better off to adopt technology that's tried and tested and has a track record, or is it more that you solved a problem or you sought to solve a problem or put a solution in without understanding the problem?

SN: I think it's the latter, Matt, to be honest. I think if you wait to find a solution that's there and it's tried and tested, you probably have a greater degree of confidence that it's going to work, but I don't necessarily think that you learn exactly why it's going to be benefit to you. So I prefer to try and fail reasonably quickly if we have to, and then reload again. And I said that Xeppo example is a good example of that, where we tried it, it didn't work and it didn't suit at the time. We never killed it as an idea. We just kept watching and monitoring. And now, onboarding it later on, it's significantly easier than it was five years ago, but still, the confidence level is high because it is more tried and tested now.
But having said that, it never bothers me as to whether or not we have to be a guinea pig in trial. In fact, I quite like being guinea pig, as invariably you can provide some input in terms of what suits you the best.

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 Yeah. And I think that's a great point. And you mentioned before that you've seen big outcomes from sort of some of the niche softwares that you put into your business. Do you want to talk through what some of those are?

SN: So I guess it comes back down to client experience. One of the things that we've been playing with at the moment, or not seen as play, I use it every day, have been for the last year or so, is just a piece of software called Vidyard and Vidyard is a plug-in to our Outlook. And I just, instead of sending an email to a client now, I just record a three or four-minute video and send that video to them via my email. So it's such a small, simple thing. And it actually, selfishly, it's quicker for me to record three minutes of me speaking as compared to me typing an email. And because I'm paranoid, I spell-check it four times and then check for all the grammar, so you spend 10, 15 minutes on an email where you can actually tell a story with the mood of your conversation through the video. And I think it works particularly well. And I think more so from a compliance point of view as well. It certainly, looking at, does the client give you informed consent? I think you can actually illustrate that you've explained more and more things by using videos. And it's just an element of the journey, I feel.

MH: You said something you've implemented since COVID struck and therefore video has become an increasingly accepted form of communication.

SN: Oh, look, we definitely use it more, Matt, since COVID, but no, we have used it for some time. We probably onboarded it about 12, 18 months ago, in fairness, but yeah, most definitely in the last three or four months, it's been a huge element of just trying to keep a message to people. And I think words are much better way when they're spoken rather than written.

MH: I think that's a really interesting one that I hadn't come across before. Thinking about integration, once you've attached it to an email, does that then automatically file away into Xplan and other core systems?

SN: It does. Yeah. We file it into the CRM today and it does automatically go into there. But I also, as a secondary piece, have been adding those into our document management system, which we use Box. So I just drag it into Box as well, which is not common practise for us, but it's just an extra step that we have been gathering all of the advice files through COVID into one spot. So it's a bit easier to track if we need to refer to history.

MH: Yeah. In relation to COVID, what are some of the silver linings that you're seeing? I think we're all well-versed in obviously the devastating impact it's having on the economy and individuals. Where do you see the positives?

SN: Look, I think the positives from a human point of view is that humans are resilient. I'm a half-glass-full person, and I think I've been very grateful and always humbled by speaking to our clients about how resilient they are. And I do think that humans will prevail, but in terms of the business itself and the technology, I think it's been interesting to watch our team and how they've adapted and how our technology adapted and sort of iron out and discover more and more things that we can get better at, once COVID finishes.

But I think there are a lot of upsides from this. And I think one of the simple things is that interaction with clients where we once might have feared a platform of Zoom to all teams to interact with clients more regularly, I actually have found it, in many cases, to be better for a client because we have more frequent interactions over video that are, they're less time, but they're on point. For example, one of the clients I work with, I've been chatting with him every Friday morning for the last four months and we spend 15, 20 minutes on the phone and that's kind of replaced a monthly or two-monthly catch-up where we meet somewhere and we do something together and so it has changed those little things. And I do feel that when it's all said and done, we'll probably land somewhere in the middle of all that, where we'll have a nice balance of using technology to interact and then maintain the face-to-face interaction for more purposeful contact, I feel.

MH: Yeah, absolutely. And when you think about what you want to achieve post-COVID, post-vaccine, perhaps, what are some of the technologies that you're thinking are going to have the biggest impact on your business over, say, the next two to three years?

SN: Well, I think, we've debated this a lot in our firm over the last few years and COVID gives you a bit more, wouldn't say more time, but more focus. But my partner, Luke, was in the US a few years ago. And one of the quotes he came back from one of those trips was, "If it can be written down, it can be automated." And I thought to myself, that's a great, great quote. And it probably now highlights the emphasis from our end in terms of trying to do that. So SOA production, for example, we're exploring at the moment, with [Nod 00:00:17:25], about how we might be able to more automate our SOA process and just try and get rid of those friction points at our end, because ultimately they're very low value-add to a client, I feel, but if you can get automation through your practise, it gives us more time to actually spend interacting with clients.

The upside of that is obviously that's a huge cost driver in business today. So if we can pare that back a little bit in some capacity, I feel that's probably for the better, longer term.

MH: Yeah. Excellent. If we look at some of the findings from the Advice Tech report, there's three key areas that Advice Tech does seem to see the benefit from a technology perspective. The first is to remove client friction and increase engagement. The second is really to support distributed workforces. And the third is really around trying to identify or create new business lines or revenue streams. How do you think about technology in that sense? Do you tend to think it's more one than the other, or is it across the three?

SN: I think it's probably across the three, Matt. Because I think the way we feel about technology is that it enables us to do our job better. And I guess if we sort of think about our business and our focus in those areas, we simply want to be able to find and use technology to give us more capability, more leverage, to be able to do what we do best, which is ultimately speak with people on a regular basis. So that, for us, is, has been, and always, I feel, will be, until there's another significant shift of some sort in the future. But that, for us, is the critical component in across all those three key outcomes of the Advice Tech report.

MH: Yeah. And before we finish up here today. I think that's had some really fantastic insights through the conversation. What advice would you have to firms when it comes to advice tech?

SN: Matt, how long have we got? I guess that's probably... No, just, look, from my point of view, I would always say, be curious to start with, and don't be afraid. I feel that's the thing that we can all probably do is we all get busy. And so, "I've got this issue, I've got that issue. I haven't got time and I hear this new thing out there and it's going to be great one day, but I'll just wait until it's ready." But the learning that I've had is it's never ready. And I still think to this day, there isn't a silver bullet that exists out there in advice tech. So for mine, the advice that I'd probably provide is take control of your own technology.

And one of the things that I observed a couple of years ago, which really bothered me a little bit, in truth, was the fact that when we start connecting with so many of the bigger technology providers, you invariably become on their development cycle, and it puts you in a very difficult position to be able to take control yourself. And as a small business, we don't have the resources and capability to invest significantly into technology. So I think it's one of those areas where you kind of need to focus and say, "Okay, where do I get the most bang for buck?" And then try and plug in bespoke piece of technology around that to deliver you an outcome. And I think that, for mine, is what I would encourage everyone to do. And I do feel that the data warehousing piece is probably the jewel in the crown for that capability.

MH: Hey, that's been an excellent session. Congratulations on what you've achieved and thank you so much for your time.

SN: Thanks, Matt. And thanks very much for the invitation to join in today.

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