Transcript

Matt Heine (MH): 
Hi Sarah, welcome to the show.

Sarah Brennan (SB):
Thanks, Matt. Thanks for having me.

MH:
So, this is a little bit different. We're back to, I think where we were about 12 months ago from a recording perspective. Sarah is at home, I'm in the office which hasn't happened for about three months, actually. So, apologies upfront for the sound quality, but thanks for making the time.

SB:
No, it's a pleasure. And as you say, we have sort of have reversed roles, I think. I'm in New South Wales so we're going into lockdown. You're in Victoria, you're coming out.

MH:
Yeah, let's hope that this is the last one forever, or at least for a very long time.

SB:
Agreed.

MH:
Sarah, we've known each other for a long time. It might be 10 years possibly, possibly longer. But I'd be fascinated as I'm sure the listeners would be, if you could just give us a little bit of your history, how you got into the industry, and more importantly, how you ended up actually in your current role, and I guess the focus on research?

SB:
So yeah, I was actually thinking about that, Matt, how long we've known each other. And I think it's probably about 15 years, which is a bit scary, so we must have met when we were very young, obviously, because we're obviously both still incredibly young. But to answer your question, how I got involved in the industry, I started in a call centre with MLC when I was at university. So, I was studying at university, typical university student, didn't have any money. Had the opportunity to work with MLC in the call centre, initially making outbound phone calls to people. I think at that time, talking to them about unit trusts, which were a very new, exciting thing in the industry at the time, which probably dates me a little bit.

But then after I left university, I actually stayed on with MLC in the call centre. And can I say for anyone interested in joining the services industry, your kids or grandkids, et cetera, you can't get a better grounding. And I am so grateful that I did that, because you get that understanding of the history of the industry, and you also get that understanding of consumers and super members. So, you're talking to real people about the issues that are affecting them. And I remember getting calls where someone's mother or father had died, or someone was going on to claim, or they were retiring and they were getting their superannuation benefit. And I have to say that shaped everything I've done since then, because it really gave me that client, that consumer, that member perspective on things.

MH:
I think that's a really interesting point. Because so many of us operate from, I guess, the institutional funds management land, in a B2B world. So, you don't necessarily get that contact with the end customer whose money you're actually managing or investing.

SB:
Yeah, exactly. And I think also in the call centre, that's where I got my first exposure to advisors as well, because a lot of advisors would be ringing asking questions. And again, you've got that great grounding and understanding of how important it was to them to be able to get them the information quickly, and also an appreciation of the value that they're actually adding to their clients. So yeah, as I said, just a fantastic grounding. So that's how I got into the industry, and then I moved through various roles in product management, particularly around retirement income, which was then and continues to be a hot topic and a fascinating topic. One I could spend hours on, but most people don't want to hear me spend hours on it.

SB:
And so, focused on product management and then moved through various roles. My final corporate role was as chief operating officer for Asia Pacific for Deutsche Bank. And that was looking after all of the broking clients, looking after funds management, looking after margin lending, and also financial planning. So, a fantastic breadth of understanding in the sector. And that was the final corporate role I had before I started our own business.

MH:
Okay. And in the 15 years or so that we've known each other, the industry has obviously gone through huge change. Reflecting on your time over the 15 years, what are some of the really good things that you think unfortunately have left the industry, and what are the things that you're really pleased to see coming into the industry as we move to a profession?

SB:
Yeah. I think some of the things that have left the industry are some of the poor, and I hesitate to use the word, but the poor sales practises, and they really were sales practises. So, I've been in industry a long time and seen some of the outcomes to clients, where they weren't really receiving advice, they were being sold product. And perhaps that product was not in their best interest, and unfortunately I've seen some of that. So in a way I know, and perhaps the regulation has moved a long way, and you can say sometimes the bar swings too far. But some of those bad sales practises you're seeing that leave the industry, has been fantastic.

SB:
And I think, I'm not sure if it's seeing it leave or it's seeing it come, but one of the things that I think has been fantastic is the move of advice to being a profession. And we're still on that journey, I get that. And I know education standards, a challenge at the moment, obviously moving through [inaudible 00:06:38], et cetera. But that move to a profession, and one of my great passions I think as you know, Matt, is advice, and the value of advice. And what really frustrated me was the fact that we had so many people out there doing fantastic things, and there was a few not doing the right thing. And unfortunately that tainted the sector. And that was probably, that's why I'm so pleased to hopefully see that that sort of behaviour leave the industry, so that the majority who are doing fantastic work have the ability to shine.

MH:
So, we might come back to that point in a little bit. I'm interested to understand what was it that motivated you to leave the safety of a big institution, I think you said it was Deutsche Bank at the time, to set up your own business? And to set up your own business, doing something that was from what I understand very different to your background?

SB:
Yeah, it's a good point. And it's an interesting, because a lot of people say to me it's very courageous to go and set up your own business. And hey, you guys, that's exactly what you've done, and it is courageous. I think you were probably more courageous than me, because mine wasn't that courageous. Because we set up our own business, but we consulted straight back to Deutsche Bank, so I had a bit of a safety net there. But actually what prompted it, was I was travelling an awful lot at the time in my role, as were my colleagues. And we were at a point where I wanted to start a family, and travel and family just didn't work. So, the opportunity to set up my own business really came from that. And fortunately with a number of colleagues, we left Deutsche Bank at the same time.

And you're right, we set up a benchmarking business. And it was interesting, it actually came about where I was on the board of the financial planning association at the time, and I was sitting between two licensee heads who were also on the board at a dinner. And they were talking across me, and they were comparing their businesses. And I knew both of their businesses quite well, and they were both perhaps not telling the exact truth. And I said to them, I called them on it and said, "I don't think that's quite right." And they said, "Well, why don't you set up a business where we can compare our businesses, and we can benchmark ourselves against each other, but do it in an anonymous fashion?" And that's really how the idea was born. So, we started benchmarking licensees on all of their business metrics, and then platforms, and it sort of grew from there. So, it was sort of serendipitous the way that the business evolved.

MH:
And how long did you run that business for?

SB:
So, that business was Comparative Benchmarking, and we ran that for about 15 years, maybe 10, 15 years. And over that time, grew it to benchmark across both the wealth sector, as well as benchmarking across banking and trading type sectors as well.

MH:
And platforms, which is where we first met.

SB:
Exactly. And platforms, which was fantastic. And actually when we first started benchmarking, we were just benchmarking the platform space, and then we grew that also to incorporate the industry superannuation space as well. So that we were benchmarking platforms, and then all of the super sector, which also picked up platforms. So, incredibly privileged position in the industry, Matt, that we could sit in the middle, have access to all of this amazing data and then be able to present back to people such as yourselves, your exec committees and boards, and share some of the insights about how platforms were performing compared to each other. And I guess, identify opportunities as well, which was just loved.

MH:
I don't think it's a good point you raise about being in a privileged position. Obviously when we got the research in at the time we also ran a licensee, so I think we participated in the licensee research. So, we got the information on an anonymized basis, but being able to sit there and actually see the business models from the inside out must have been fascinating. Particularly given that the industry at that time was very much product subsidised. To be able to see that shift from a product-led advice industry, through to an advice-led industry, what were some of the key things that you saw happening probably over the last five, 10 years?

SB:
Yeah. No, it's a very good question, it's very true. I recall when we first started benchmarking licensees, one of the key metrics that we had was investment sales per advisor, and insurance sales per advisor. Now, we look at that and go, seriously, is that really what we were measuring? But at the time, no one thought that was the wrong thing to measure. That's what people wanted to measure. So, what we've obviously seen, so that was the product-led. What we have seen, as we've all seen, is just that evolution to being advice-led. And I used to always be fascinated, people used to draw value chains, and they'd always start with the client was always at the end. And I was going, "You got to put the client at the beginning."

But I think that's now what we've done, we've seen that move. And I know with the work we now do, and the research I do today with investment trends, it's advice-led, it's about the consumer. Having said that, it's also about the advisor, don't get me wrong. Because it's okay, how do we support advisors to be able to do what they do for consumers? So, I guess I've seen that evolution of supporting advisors to support their clients, not support advisors to sell more product, if that makes sense.

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MH:
It might seem like a strange question, but you mentioned again that the client should start at the start of the value chain. Licensees have limited levers to pull when it comes to revenue generation. The successful groups that you're seeing now, how have they restructured their businesses, and what's their business model or financial model moving forward, other than just taking a percentage of revenue?

SB:
Yeah. I think that the key things I guess we're seeing in the advice space, one is obviously the whole issue of the fees that you are charging. So it's old news, obviously, thinking we charge a fee for service, but it's actually being able to charge the right fee. And so, I think that's taken a little bit of time and I think it's still evolving. Because I think, and I think we probably share the view, what planners do is incredibly valuable. But because we grew up from this product environment where advice was free, and still, you think back to the ads that were run that said, "Come and get free advice."

MH:
Health check.

SB:
Yeah, health check or, "We do free advice." That devalues advice. And so, I think we've moved a long way, but there's still more to go, that what advisors do is incredibly valuable. So, actually charging the right fee for both upfront and ongoing services is absolutely key. And to be doing that confidently, I guess, knowing the value that's added. So, that's obviously one area that's incredibly important.

The other, I guess, is we've seen advisors obviously because of that, look at the clients that they are looking after. So the whole segmentation, do you want to look after the high net worth space, and you have less clients? Again, charging the appropriate fee. We're seeing people maybe in that middle space where it's using more digitised means to support their clients. So, be able to deal with greater scale because of the advent of digitization. So, that's the different sort of segments that we're seeing.

And then probably the other area that we're seeing is practises and licensees who are also moving into the portfolio construction space. And in that space, I talk around managed accounts, et cetera, that they can provide to their clients, but be able to add that value around that portfolio construction side.

MH:
And in that regard from a licensee perspective, we've seen licensee costs obviously creep up pretty significantly over the last four to five years, as rebates and other product generated margins disappeared. Do you have a feel for what an appropriate level of fees are these days for a licensee to deliver services to their advisors? Is it 40, 50, $60,000?

SB:
Yeah, it's a good question. I don't have a view on the exact fee. And the reason I'm sort of smiling when I say that, is that we're about to actually undertake through Investment Trends, a licensee benchmarking study, to actually ascertain exactly that. Because I think it is a question at the moment, is what is that fee that is being charged to the practise and to the clients, on a comparable basis? Which is always quite challenging, and that's the beauty of what we do, is we've got the methodologies to be able to get a like with like comparison, but also what's it costing the licensee to actually provide those services? So, we can look at what's actually being charged to the advisor and the practise, but you've also got to look at the other side, is what's it actually costing you to provide that service?

So, I don't know the number at the moment, I'd be guessing, and I think we all are at the moment because it's still evolving. And I don't think that sort of benchmarking exercise has been done for some time, which is why we're excited to be going back into that space, and to do exactly that. Compare licensee costs to the advisor and the practise, but then also be able to compare what it's actually costing you as a licensee to operate your business, and how does that compare to your peers? So, I think that it's going to be really cool. I'm really excited about that.

MH:
I will have to get you back in six months or so when you finish that, and obviously no doubt our listeners are welcome to buy the report if they're that way inclined.

SB:
Yeah, exactly. But I'd love to do that, and come back and share it. Because I think, I don't know about you, and it's why I love what I do, which is research and stats space. Lots of people will say to me, "I know that it's costing $40,000," and I say, "But how do you know that?" And it's, "Well, I've spoken to a few people and this is what..." So, the beauty of what we do is to deal in facts and say, "Well, this is what's happening. And for some it is costing 40, for others it's costing 60, but let's ensure we're comparing apples with apples here." That's the challenge.

MH:
That's a good segue. So, you're now CEO of Investment Trends, having sold your previous business. You've been out of the market for two years, out of research anyway, and doing a whole lot of other interesting things in the meantime. Do you want to just give the listeners a little bit of background to Investment Trends, why you're excited about the role and some of the research that you're currently doing outside of the licensee work?

SB:
Sure. Yeah, so we sold our business, which was a little bit like giving away my baby, so I struggled with that a little bit, I have to say. And then having spent some time out of the industry, came in as CEO of Investment Trends a few months ago. And that was such a natural move for me, because when we ran our benchmarking business, we often were side by side with Investment Trends, so always had a lot of time and respect for the work that Investment Trends did on the basis that it's very statistically driven. And that's key to me, I mentioned earlier about dealing in facts, so it's actually making sure that there's method to the madness, I guess in a way. I don't know if as a statistician, you can say that.

So Investment Trends, we have two core components of areas that we conduct research on. One is trading behaviour, so that's very much around the online broking world and listed derivatives world, et cetera. And that as you can imagine, is absolutely fascinating at the moment, having come through the last 12, 18 months of COVID, just the explosion in online broking and the people who are doing it. I think it's a really, really, it's probably a whole podcast on its own, of the implications for that for advisors in the longer run, because a lot of that group is that millennial group.

MH:
I was going to say, might pause on that for a moment. It's something I'm a little bit passionate about at the moment, because I think it's a train wreck waiting to happen. And I think the advertising that we're seeing or hearing on the radio and on billboards and on tram stops, is actually quite concerning and something that advisors need to be very well aware of.

SB:
Yeah. No, I couldn't agree with you more, Matt. Just the number of people who've come into the market, the age group of those people, the trading that they're doing, the sources of data, information that they're accessing. I think that it's an area where greater education, and for a lot of the online brokers, they're moving into that space now where there's a lot more education and a lot more support being provided. And that's one of the reasons why, I guess, the research we do in that space is quite important. Identifying where that education is needed, et cetera.

MH:
Do you think that the growth in the millennial traders, and that cohort becoming interested in investing... Obviously it's easy at the moment, everything's going up, everyone's making money. When things don't necessarily go as well as they are now, is that an opportunity, do you think for advisors to not pick up the pieces, but to provide services to those now hopefully more financially capable clients, or investors that are actually looking for professional advice?

SB:
I think it is. And I think, I know you can look at the downside that a lot of people coming in, are they fully informed, et cetera. But on the other side, I think as I said, a lot of the online traders are doing some really good stuff around education, et cetera. And I think if you think about it, what we're having is a much more engaged group of people with their investments. And that's one of the things we've always talked about in Australia, is people who've got an advisor value advice, but people who don't have an advisor don't know what they're not getting. Getting people engaged with their superannuation is always a topic that comes up, and it's not easy. And now, we've suddenly got this group who've come through, and they've had the time through COVID to be doing research and learning, et cetera, who are actually quite engaged. And so yes, I think over time that more engaged group become a huge opportunity for advisors. Absolutely.

MH:
But they're going to have to change their value proposition, and become far more digital if they're going to succeed in that market.

SB:
Absolutely. And it's interesting, I heard a lady speaking the other day on a podcast, that she was talking about financial services digitization. And she was saying, and she was coming from a consumer goods perspective, and she said, "In the consumer world, people just expect everything to be digital. And in financial services, we get excited when we digitise a statement. That's not digital." And she said, "What people are looking for is the Uber experience in a financial world." So, I couldn't agree more. I think that opportunity to digitise, as this generation comes through in particular, is a huge opportunity for advisors.

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MH:
It would be hard to talk about millennial investors and not mention Bitcoin. Any research or insights there?

SB:
Interestingly enough at Investment Trends, we did look at doing a crypto study a couple of years ago, and we actually do have some crypto questions in our investor and advisor product needs studies, so there is some research there. Yeah, it's still very small. We're actually looking at a crypto study at the moment because it's so topical. I think what's interesting is again in that market, you're seeing a degree of sophistication come through, where some of these people are educating themselves on this stuff.

So I'll use an example, a friend of mine's son who's 21, 22, he and his mates sit around and they trade crypto. But he put a thousand dollars in, he made his $2,000, he took that out and now he's playing with the money. So again, this education aspect is coming through. And I think what we're also seeing in crypto, is the development of more sophisticated products. So, we're actually seeing baskets of crypto now versus just putting your money on black being Bitcoin, or Dogecoin or whoever. So yeah, I think it's an interesting space. Again, I would come back to, if it's getting people engaged and educated, from an advisor perspective over time, I think that's going to be beneficial.

MH:
Fantastic. And an age old debate: active versus passive?

SB:
Look, it's a tricky one. Again, I'll go from the research, which is what we do here, we ask consumers. We spend a lot of time talking about it in the industry, what we see in our research is consumers don't necessarily have a fully... They don't know beta, alpha, et cetera. They're looking for are you meeting my objectives? So the active, passive, yeah, I'm an active person. That's my style, so I'll stay away from the debate. I'll get myself into trouble, Matt. What's your view?

MH:
I'm Switzerland.

SB:
All right, I'll join you in Switzerland. I can be Liechtenstein, just next door.

MH:
Perfect. And some of the other research that you're working on, I know you've got a very broad set of reports out at the moment.

SB:
Yeah. Look, we've got some great reports out at the moment. I would say that of course, but we do. One in particular, there's a couple I would mention that which might be of interest to your advisors. We just released an ESG report, so when you say the age old debate active, passive, I think the hot topic at the moment is ESG. And we just released what I think is probably the first of its kind in level of depth and coverage in Australia in the ESG space. And in that, we've researched both the consumer side as well as the advisor side, so we've got both sides of the equation, I guess.

So, that is an absolutely fascinating report. Because from a consumer perspective, what we're seeing is there's a percentage already who are of the view that they are investing based on ESG principles, but what's fascinating is what we call the next wave. And there's quite a large group of investors, so we're talking very much people who are investors, who are coming through, who are looking for ESG type investments or ESG aligned investments. So, it's not going away, this wave is coming through. And what's interesting that the research showed, is that clients are leading a lot of the conversations at the moment, not so much the advisors, and clients are leading them in particular around climate.

So, when we look at the E, and the S, and the G, the S and the G are sort of important, but the E is really what is front and centre. And what the research does, is it actually links back to people's personal behaviours and approaches to life, and links that to their investment. So if you are, and that's where the climate, the E comes through quite strongly. So if you are very much on renewable energy, et cetera, then you're going to be looking for that E in your investment portfolio. So, that's a really, really, really key piece of research at the moment. It's the first time we've done it, and we'll be doing that on a regular basis now. But incredibly beneficial for advisors and clients.

MH:
It's certainly an area that we're seeing huge growth in, as you would be through the research. And whilst it's certainly been a theme for five or so years, we found that the number of inquiries from consumers and also advisors, spiked after the bush fires, which ties in very well with your commentary on the climate.

SB:
Absolutely. And interestingly, COVID didn't spike it anymore, so it was really the bush fires, and then the climate summits, et cetera, which has had the influence. But one of the things I find fascinating about ESG from a consumer perspective, and an advisor, is when you look at one of the questions we ask is what percentage of your portfolio is currently ESG aligned? And what would you like it to be? And we ask the same for advisors. And what's interesting at the moment, is they answer that question, is ESG's being considered a little bit at the moment like an asset class. Which is sort of fascinating in a way, because ESG is a type of investing, obviously, whether it's bonds or cash or equities, et cetera, it can be still ESG aligned. But I think as we're evolving, as I said, it's still a little bit, I'll put 20, 25% in an ESG aligned investment and just see how it goes, sort of thing. Which I find that quite curious, and I think that is something that will evolve over time.

So yeah, so that's a great piece of research. I love that, it's a really, really interesting topic. The other key pieces of research is our advisor study, which was just released. It will be released next week, just pre-30 June. And that's all about the advice space, so what are consumers saying about advisors? What do they want, what do they need, et cetera. So for advisors and licensees, that's a really, really key piece of research. And then the other obvious one that we released recently is the platform study, which Netwealth came through as always, incredibly strongly in. So congratulations, fantastic results, some great innovations and things that you guys have introduced and are working on. Which again, with our lens, we're very privileged to see what you're doing and see how that compares. So yeah, congratulations on an amazing result again.

MH:
Thank you very much. Sarah, with the advisor report that's coming out in the next week or two, without giving away all your secrets, are there are any early findings that you can share with us?

SB:
I think probably the key thing is that we're seeing the demand for advice increase. And I think it's probably not a surprise, but it comes to our earlier comments, I think Matt, about how do we service clients. So, that's the different segments and the opportunities around digitization, and different levels of service, different approaches, et cetera. So, that would be probably the first thing that I would point to. The only other thing is I think fees, and the issue, we touched on this earlier, of what's being charged to clients. While it's important, it's not the driving factor for clients. So while we probably, I don't know about you, I'm always terrible about talking about money and asking people to pay for things. Consumers aren't so hooked up on that, to them it's about the outcome and the value, et cetera. So, there are probably two messages that come through.

MH:
We've done quite a lot of work on this particular area as well in recent times. Our research would suggest that there's around 2.2 million Australians that are open to advice, that are currently unadvised. And the other interesting statistic that I think has been bounded around the industry, is obviously the declining number of advisors, and the likelihood that could drop to 13,000. So, we've got an increasing demand, reducing supply, and I'd just be interested if those numbers resonate with some of the research you've done?

SB:
Yeah, they do, and we've seen exactly the same thing, is that absolutely advisor numbers are coming down. It's interesting what the starting point was, and we won't go into that debate. It's a bit like active versus passive, what was the study number. But the fact is, advisor numbers are coming down, so that is the case. And the demand, as I said, we're actually seeing that number increase from clients. What's interesting though, is there's a little bit of a disconnect between, "Are you open to receiving advice to your question?" The answer is yes. "But have you actually gone and sought it?" And we have a big drop-off. And so, we go to the next stage and say, "Well, why not? Why haven't you done that?" And the factor that comes through, and we talked about is it cost? No. What comes through is trust.

So that's the key aspect, is being able to get out to the consumers to educate them on that value of advice, and to keep building that trust. Because we also then go to our next question and say, "What areas do you feel like you need advice on?" And the list is extensive, and we end up with a high proportion of that group saying, 70% saying, "I need advice on these topics," but they haven't actually gone and sought advice yet. And the reason they haven't done that, trust is the key factor that is stopping them. And I have to say, that's not just with financial planners. We track who do you seek advice from? And that could be accountants, it's financial planners, independent through your superfund, et cetera. And across the board, probably not so much with accountants, but across the board, it's that trust aspect. So, there's a disconnect there.

MH:
Trust is a huge topic, and it has many meanings. And I know that you did some fantastic cluster analysis. When you drilled down on trust, what were some of the key things that came back from consumers, as far as what would give them belief in the advice, or trust in the advisor?

SB:
Yeah. So one of the key ones, and this came out particularly, and we could really test this during the COVID period. One of the key ones that came out is that my advisor proactively contacts me. So, when we looked at the trust levels and the satisfaction levels, where we had instances where advisors, or platforms, fund managers, et cetera, but where people had actually proactively gone to the clients, that was a key aspect, so that comes through very strongly. So that proactiveness, if that's a word.

The other aspect that comes through around trust, is that they do what they say they will do, so that comes through. And then the other trust aspect that comes through is around brand, and so being a brand both in a negative and a positive sense, that I'm aware of and that I trust. And I think emerging, is the education side, that I know the person I'm dealing with is well qualified. Well, is there things that you're seeing in, when you say it's a hot topic for trust, that you're seeing, are there aspects that you're seeing come through, Matt?

MH:
No, I think that summarises it really well. And the challenge for a lot of advisors now, is also how do you build online trust? Because the online footprint is becoming an increasing input into how someone feels about the brand, so it's interesting that you mentioned that. And given that the industry is still in many ways, a lot of small businesses, having or creating a brand that is has trust is actually very challenging. And a lot of that is actually on the online presence, what's happening on social. Are you releasing and providing a lot of content, and are you being proactive in your advice? So, I think it's very interesting.

SB:
And content is really key, it came through very strongly across a whole lot of the breadth of research we do, is that demand for content, because we are in that online world. And what's interesting, it doesn't have to be, and we talked about the fact that I'm recording from home, you're recording from the office et cetera, it doesn't need to be the big production, that perhaps in the past we maybe over-engineered what it needed to be. It's just being able to get out and talk to people, and podcasts like you're doing, Zoom meetings, just information, sharing links, et cetera. That appetite for content, I think digitization makes that a really, it's open to everyone.

MH:
And it's obviously not all about digital technology, we still need to have that face-to-face. But we have our AdviceTech report coming out very soon. It's going to be really interesting to see how the intentions of tech adoption have actually changed during COVID. Obviously people have been forced into a virtual world. You mentioned before revolutions in financial services, digital signatures, which really seems to be the biggest change that we've experienced in years. But how we actually adopt back to a face-to-face world, but keep the best bits of digital and find that right balance.

SB:
Yeah. And it's interesting you say that, because we've just also completed our UK advisor report. And one of the things that came through in that, was that the advisors, as in Australia which we touched on earlier, margins have been compressing in the UK from an advisor perspective. But the groups who actually came through very strongly and performed well over the last 12 months, were those who had adopted a whole lot of that digitization. But they hadn't lost the personal touch, so to your point, it's that balance. But yeah, digital signatures and online meetings and et cetera, that those who digitised more, definitely had a higher level of profitability in our cluster analysis, to your earlier question about cluster. But you're right, it's that balance. And I find myself with talking to people like you when we're selling our research, you can talk via Zoom and Teams, but also having that personal interaction, it's important. So, it's how do we get that balance? And I think that'll play out.

MH:
We're jumping around a little bit, but you mentioned the UK which I think is a fascinating parallel to what's happening in Australia at the moment. We touched on the fact that advisor numbers are dropping, they might end up somewhere around 13,000. The UK went through RDR, which decimated the industry in many ways. Advisor numbers dropped from somewhere near, I think it was 100,000 down to about 20,000, but have subsequently rebounded. How is the UK looking at the moment in that regard?

SB:
Yeah. It's actually, as you say, it's rebounded. And it's actually continuing to grow. So I don't think it's overstating, it's going strength to strength. COVID as I said, was a tough period as it was for everyone, but the advisors who particularly have come through that strongly, are advisors who have segmented their client bases, who are charging fees for service, all the things we talked about earlier, and who have digitised. So, when we looked at the clusters of advisor, particular advisor groups, the ones who had struggled were the ones in particular, which I think we called the traditional segment, who hadn't moved, hadn't properly addressed the value proposition with their fees, and hadn't you digitised.

So yeah, I think it's interesting in the UK in the advice market, as you say, they went through RDR a little bit and had that drop-off. I think though, for example in the platform space, we lead the UK when we look at our platform research between Australia and the UK. We talked about ESG earlier, ESG probably leads us, the UK leads us in the ESG space. So, it's a great market to look at the parallels with.

MH:
If advisors are looking abroad, overseas, what are of the other markets that you think are worth looking at? The US is obviously very digitised and robos growing at a rate of knots, which are the most aligned to what we're going through at the moment, do you think?

SB:
Yeah, it's a good question. I think it probably would be the US. South Africa is always a really interesting market, again, just because we've mirrored each other a bit as we've grown up as industries. So, South Africa is a market I always look at with interest. In the digitization market, the market that I'm really fascinated by at the moment is looking into Israel, and what's happening in some of the places, in some of the digital hubs there. But that's not specific to financial services, just some of the evolution that's going on is amazing, just mind blowing. But yeah, so probably UK and South Africa are probably the two.

MH:
Fantastic. Now, unfortunately we're getting close to time. But before we finish, I did want to ask you about a mutual love of ours, which is skiing. Back in the day, I believe you were an Olympic skier. And I'm just fascinated to know what you took from that experience, other than becoming a very good skier, into your business life? What were some of the lessons you learned?

SB:
So yeah, I have many years skiing. I didn't quite make the Olympics, I have to say, I wish I had. But I was on the Australian ski team for many years, which was fantastic. What did I take? And it's interesting, Matt and I were chatting earlier that our kids are all skiing as well. And the reason I've encouraged them to do it, is probably from what I took from it, is you learn incredible resilience as a skier. You learn that, literally if you fall down, you get back up. I did a lot of that. And the other thing that I was incredibly lucky with, is that I got to travel at a very young age, independently with the ski team. So, you had to learn to look after yourself, and grow up and deal with things.

At the time, did I appreciate it? No. Do my children appreciate it today? I'm sure not. But if I look back now, I'm so grateful to my parents for the opportunity they gave me, that it gives you that grounding in doing a sport that can be a bit tough, and you have to be pretty resilient. And I think that's the same in business. We all go through ups and downs, and I've definitely taken that lesson to that. The other thing is probably from travelling, you learn that confidence. And as my children say, I will talk to anyone, anywhere, at any time.

MH:
Speaking of which, it's been an absolute pleasure talking as always. Thank you for fantastic insights, and look forward to catching up, hopefully in person soon. But thank you very much, and look forward to when we catch up next, to talk about some of the new reports.

SB:
Fantastic, Matt. And again, thank you for the opportunity. Take care.