#25 Edden Kift – Transcript

Louis van der Merwe
Welcome to another episode of Financial Planners, South Africa. Today I’ve eaten gift with me. Edden is the SA Head of Business Solutions at PortfolioMetrix, who is also a very proud sponsor of the show, Edden, so wonderful to be with you in person. And we also have a beer to celebrate this show. Thanks for joining me.

Edden Kift
Thanks, Larry. It’s real honor and a privilege to be here. Having watched every or listen to every one of your podcasts so far, you have a sterling lineup of past guests. So as I said, it’s a it’s a great honor to be counted among them.

Louis van der Merwe
While maybe we continue with that, that success. Edden I want to start with the secret. And for those knowing you would probably never guessed that you just turned 50?

Edden Kift
Well, actually, I’m 51. So I’m one of the as we joke all dogs in the industry. I’ve been in industry for 27 years. And in fact, I’m the oldest employee at Portfolio metrics in South Africa, which I don’t know whether that’s a good thing or a bad thing.

Louis van der Merwe
So that comes with a lot of wisdom.

Edden Kift
Yeah, I suppose you can call it that.

Louis van der Merwe
I want to rewind 27 years ago, when you joined this profession, that we now like to call it of financial planning straight out of our city university. Tell us a little bit more how was financial planning back in South Africa 27 years ago?

Edden Kift
Surely. So interesting times. And I think maybe at the outset, the results of what was going on in I would say around 9495 weren’t all bad. But it was quite an interesting time. Because I started out in sales and sales was really a case of attending sales one on one where I remember one course I had an ex air traffic controller sitting to one side of me, and the next teacher to the other side. It was just a very interesting mix. And I was one of the youngest people in the sales training 101. And effectively what happened was, you spent 10 days being taught how to sell some very valuable information and advice as well. But it was all about sales go out and sell a product and look as a 24 year old I could possibly sell but I certainly in hindsight, know that I didn’t have enough experience and enough knowledge to truly, I suppose deliver value to people, I could sell the product. But I didn’t really comprehend that aspect that required you to understand what advice was all about, as opposed to just you know, selling a product. I suppose I could have been selling washing machines or vacuum cleaners. In fact, sorry. I think the one sort of consequence of that was that, you know, I ended up selling a 27 year endowment to someone in their 20s because that would derive the maximum amount of commission for me, because it was commission driven. And it was, I suppose, determined or your success was determined by how much commission you generated and how many interestingly lives you sold, not how much advice you gave How much valuable advice but you are measured on the number of lives you sold? So, yeah, that was a, it was my world. But, you know, in hindsight, things have moved on, you know, significantly.

Louis van der Merwe
It’s wonderful that, you know, within this profession, there’s actually so many different fields that you can go into Kurt. So my understanding is that, you know, you spent 18 months at this, this institution, yes. And you decided to kind of segue into something else? Yeah, it

Edden Kift
looks, I think, I think I struggled with the approach very much. And it led me to then, you know, look for other avenues that I suppose would be more enjoyable, because it really wasn’t that enjoyable for me. And I ended up staying with this institution, but working in their marketing departments, I was there to support advisors who were selling the the products, maybe I felt that was more, you know, appropriate and relevant. And then, you know, an opportunity arose with an investment management firm. So I left the big insurer and joined Marriott, which was, which was also quite an interesting journey, as it was a relatively small firm, but also learnt quite a bit there. So yeah, that was that was the next step in my career.

Louis van der Merwe
And so with these institutions, you’ve been working with financial planners, and what what would you work on kind of within? You know, would it be business development and those kind of things?

Edden Kift
Yeah, so I think that, you know, initially it was very much about sales, you were driven, or sorry, you were measured by, you know, achieving sales targets, or whether you were a broker consultant, or whether you’re an agent, or whether you’re an investment consultant, you needed to gather product or asset sales, I think my angle, which I learned very quickly was, was to deviate slightly from a direct sale, attended to one to one to help the advisor be better at what they were doing, you know, help them be more efficient in terms of what they were doing. So yes, there had to be a sales angle to it, because I suppose I had to, you know, earn a salary. But, but my objective was to be more than just someone in the advisor or the brokers office selling them, you know, our wares, I wanted them to see value in engaging with me,

Louis van der Merwe
that’s such a great common dating, because what I’m hearing is that, you know, you’re adding value to their lives first and then saying, Let’s build a relationship, and maybe even at some point, then ask for business, or was it? More downplay than that? Oh,

Edden Kift
look, you know, my approach was very much around. Well, Mr. Mrs. Advisor, what are you trying to achieve? What are you trying to do for your clients? Because, you know, I felt that if I had the tools in my toolkit, I could say, Well, look, if you’re trying to achieve that, I can assist you. If you’re driving, trying to achieve something else that I can’t support, then I’ve got to be honest with you and say, Look, I’m not going to force a sale purely for my own benefit. I’ve got to be honest, and say, you know, maybe you need to be dealing with someone else or looking at someone else for a solution.

Louis van der Merwe
It didn’t over the last 20 plus years. Have you seen financial planners shift? And have you? Have you seen that request? You know, this is what I’m trying to deliver to my clients? Has that changed at all?

Edden Kift
I think it has. And I think as much as the institutions have been sales driven, which has resulted in advisors focusing on the sale, and again, you know, I’m not saying there were advisors in the sales environment 1520 years ago that weren’t doing sterling work. I know, many, many good advisors. But I think the approach has changed. It’s about it’s more directly and openly about how does my advice as an advisor, how is it applicable to a client or a family? And how does it benefit the family? So so it’s moved very much from a sales environment to a solution environment. And sometimes a product is a solution, or very often a product is a solution. But it’s not the primary driver. It’s about trying to solve problems, solve issues provide comfort. So you get to a mix of product, as well as advice. And something that has become more and more prevalent is this whole coaching thing. And I don’t think clients want to feel that they’ve been coached. But I think there is a very subtle way in which advisors and very successful advisors are able to coach clients and either change behavior or allow for behavior so that it does not derail plans and strategies that have been put in place. So yeah, I think it’s a very, there’s been a very obvious change and you see that Looking perhaps I grew up in an era in an era, we didn’t have cell phones, we had rate books, not computers when we went out. So I think the environment and technology has also assisted in this evolution of the way advice is delivered and how it is delivered.

Louis van der Merwe
So almost a financial plan is adapting to the way advice has been delivered. And no one I’m guessing also is the the six step financial planning process, some might call it a different way of selling financial solutions with determining what the need is creating a proposal then servicing that I saw on LinkedIn yesterday, someone said, no client wants to be fact finded have one CV, information gathered. And sometimes, you know, we get we lose sight of the actual client, and we focus so much on their money. I want to talk a little bit about this coaching element that you’re bringing up, it’s been a theme for a lot of the guests on the podcast that have had experience with coaching, what have you seen with the financial planners that you’re working with? Now? Is there a marked change in the way they interact with their clients post coach training?

Edden Kift
I think so. And, you know, look, I don’t sit in any of the meetings with the end investor, but I, you know, mostly I have on isolated occasions been asked to sit in a in a client engagement. But my sense is, and based on the engagements that I have with advisors, that, that things have changed, I think that your clients feel, there’s more of a two way relationship between the advisor and themselves, a more trusting type relationship. And then an era where it was very much Hi, I’ve come to sell you something. And now I’ve got to try and convince you as an investor, as a client, why you need this. So look, we’re very fortunate portfolio matrix in that we deal with, I mean, I would go as far as, say world class, financial planning businesses. So I have a very, probably, you know, and I say it with respect, maybe a narrow view of the global advice, profession and industry, that the quality of advisors that we can’t, as clients is, is exceptional. And, you know, they all spend an immense amount of time trying to understand their clients understand what clients are trying to achieve the transitions they’re going through in life. So that coaching element, and we were very aware of clients who are either undergoing or have undergone formal coaching at various levels to try and improve the way they you know, engage with their clients,

Louis van der Merwe
he didn’t want to ask you a little bit more of a personal question, What has working with a financial planner made for for your financial life? Because I know that, you know, you deal with a financial planner, and you often rave about their service without having to name names, you can you share with us what it means working with a financial planner.

Edden Kift
So I think the two things. So I’m a CFP, and you know, I’m not a practicing financial advisor. So I can, and I’m very happy to admit that, you know, from from technical knowledge perspective, I am behind the curve, because I don’t do that every day, as you know, the advisors that you know, like yourselves would do. But the issue was for me that I was doing my own thing, because I could do this. And it dawned on me that financial planning the entirety of it is far more complex than a simple preservation fund or saving for a time and the fact that there are so many elements at play, you know, have you got a valid will have you looked at your estate duty. And, you know, I looked at all of this. And I said that I need to actually get an expert whose job it is every single day of his or her life, to look at these things and stay abreast of these things. I was very fortunate in that there’s a firm in Cape Town that I had as a client, and I watched them evolve and grow. And it made sense for me to approach them and say, Look, you know, would you take me on as a client, it’s not that I have millions and millions to invest, but I’d really value you know, your input. A little aside to that my wife is in the financial services industry as well. And I said to wonder, come along, and she’s, you know, also quite knowledgeable in a range of areas. And she may have been a bit skeptical initially, but when we walked out of our first meeting together, and I’d been a client of this advice firm for a while, she said that was probably the best hour and a half she had spent in talking about a personal finances. So that sort of was a bit of an aha moment and I shared it with the adviser who was obviously quite grateful. But I think the other element that is worth mentioning is that I walked out of a meeting, subsequent to that with the advisor, and I said, You know what I think I finally understand what your value proposition is. And he looked at me acid, you provide peace of mind, I have the utmost confidence in your team and your capabilities. And I have the utmost confidence that my affairs are in order for any planned or unplanned transition, that’s the value that you as a financial advisor, bring to my life. So it, it crystallized the value of advice for me, I always believed in it. But but having gone through the experience myself, and coming to that realization, and I think that’s quite an important thing to bear in mind, yes, we all have, or we may, as advisors be able to put up our value proposition on a website or in a document. But I think when a client is able to understand without the adviser telling the client what the value proposition is, and what the value add is, yeah, all things being equal, I’m going anywhere else, you know, in terms of financial advisor, and unashamedly said, I have referred many, many people to this particular firm, and others, because I really believe in the value of advice.

Louis van der Merwe
That’s wonderful that like intangible peace of mind. And, you know, I think it ties so nicely with the report, that portfolio matrix has put out on the value of advice, like, how do those two hold hands? What are the things that surprised you from the value of advice paper? And how does it relate to your experience dealing with a financial planner?

Edden Kift
So I think, I think the one thing that comes up quite often is, am I as an investor, or a client prepared to pay for advice? So there’s this there’s this, I suppose, gap between what the general community of investors and clients out there what their perception is of advice, and the perception of costs related to that advice? So I think that’s, that’s the the one side of things, advisors naturally feel quite passionately about the value they can add. And I think it’s trying to connect those dots. And what we did with this value of advice, white paper is to try and quantify what is the value of advisors, now, they all kinds of studies that try and pin it to a number, you know, it adds 3% of it, you know, alpha two returns. And you know, there are a number of those, and I’m sure you’ve read many of them. So I think there was nothing that really surprised me, I just think it was a really well put together document, the credit goes to our MD In the UK, who drove that whole process. And I think it is a really nice summary of and it’s, I suppose something that advisors can look at and say, Well, look, he has an independent assessment of what the value of advice is, read this, because perhaps as a financial adviser, you Mr. or Mrs. client will see something of this in what I’m trying to do as an advisor. So it didn’t really surprise me, I think it’s just trying to connect the desire to provide sound financial advice, with a willingness to pay for that advice.

Louis van der Merwe
So first prize is experience this financial planning, but if you can’t experience at least here’s a document amongst others, that can showcase the value that current advisors and

Edden Kift
in many others, you know, the number of firms that have been doing this, you know, so and, you know, I, I can quite confidently say through what I’ve read and what I’ve experienced, there is value in advice.

Louis van der Merwe
Do you think everyone should have a financial planner?

Edden Kift
Look, I think their personal preferences, and I suppose it also depends on where you are in life. So if I were 20, many years ago, single, My, I suppose obligations would be different. My requirements would be different to being a father, who’s married kids closer to retirement. Hopefully, that’s not going to happen too soon. But but so I think, I think engaging with an advisor from as early as possible in one’s I want to say Korea because you could, you know, engage with an advisor, you know, pre Korea, but I think it’s worth engaging with an advisor. I think there is a lot one could possibly do yourself when things are less complex. But I also believe that advisors are willing to engage with quite a cross section of potential clients and You know, within a particular service proposition, an advisor could most certainly cater for a younger, maybe less complicated firm, it doesn’t have to be younger and less complicated. You can be 60 and uncomplicated. But I certainly believe that an advisor is a worthwhile sounding board. So perhaps someone goes to an advisor for the advice, and, and the, the client base is fantastic, thank you, I’m going to take this advice away, and I’m going to implement it myself. But that is then for the advisor to decide whether they have a proposition that can cater for that approach, or whether they would prefer that that client go elsewhere. So sorry, that’s quite a long winded answer. But I definitely think that everyone should engage with an advisor, at least initially, anyway, then make up their minds.

Louis van der Merwe
What I’m hearing is that the relationship almost Trumps, you know, having a financial planner on retainer, or paying them a monthly fee or assets under management. And I’ve had this discussion with a few people, where if we look at the field of therapy, the number one predictor of success was the relationship with the therapist. And I think we see the same thing with financial planning, that if your relationship with your financial planner, we would advise a solid, then the outcomes would probably be in your favor as well,

Edden Kift
correct. I mean, I could share with you a sort of a related story is, when in my time when I was with excess, we had a client in Durban and and when I say client advisory client advisory firm, and she was new to what we were doing, and she said, would you come along to a client meeting with me? I said, Absolutely. In fact, the client is a pharmacist, and he’s just down the road. And by then we had laptops, I was on technology. And we had captured certain information about the client, him and his wife, and he had children that lived outside of South Africa. And in discussions with this couple, all it was infected was the husband initially, he said to me, all I’m really worried about is can I visit my children once a year. So we explored that a little bit further with him. And I got an understanding of what the requirements would be sat there with the computer program in front of me, which sometimes is a good thing, sometimes it’s not. And we keyed in certain particulars. And I said, I’ve got a surprise for you, you can go and visit your kids not once a year, twice a year, the tears came out of the corner, his eyes, he called his wife, and he said, Come listen to this, we can go and visit our kids twice a year. Now, in his head, he didn’t want to spend money, he was an incredibly hard worker, but he wanted to protect his wealth. He didn’t want to spend it. But the fact that with suppose a little bit of help from me, this advisor, and I were able to say to him, you can get more than what you really wanted. That to me was just such an aha moment. And I think that, I suppose just confirms that dealing with an advisor, being a sounding board having that relationship. As you talked, it’s about the relationship. And it doesn’t mean that you have to ask the advisor whether you can spend your own money. Although I know there are clients that do that, can I buy a car? Can I go overseas on holiday? So relationship is key to the advice process.

Louis van der Merwe
Sometimes we just need someone to give us permission. And we see that a lot in clients getting into the D cumulation. D cumulation. Phase. You know, I’ve worked my whole career to save money. Sure. Can I take some of this money? Is this my money? Is it okay to take that money? And I think what you mentioned also is the coaching elements, I hoping with these type of conversations, but it’s you’ve been having these conversations for for a really long time and helping financial planners to facilitate those conversations.

Edden Kift
And I think I think as I said, Louis, it’s about that shift that has happened, I suppose for me in nearly three decades, which is, you know, quite a quite something is that is that the, for me, it’s about a shift I’ve seen in advisors. And, you know, again, I think that advisors were often placed in positions where they had to conform to certain behavior, and said the results weren’t necessarily all bad, but there was a type of behavior. Whereas the world has evolved and advisors have gone on a journey and many of them are going on a journey to try and look at it from almost trying to say, you know, a completely different angle, where they’re saying, right, let me understand my client. Let’s park the product. Let’s park all that other stuff. Let’s understand what the client the family are trying to achieve. What what are their blind spots, trying to extricate veterans I’m from deep inside the psyche somewhere and said, Okay, let’s build a plan that works for you. It’s not just dump a product in there.

Louis van der Merwe
Absolutely, even you’re a big proponent of the client advisory panel, tell us a little bit about what that is and how financial planners should be using that in a business. So, so one

Edden Kift
thing that I’ve learned, and something that I’ve also been part of is, and something that I’m very, very passionate about is the need for advisors to obtain feedback from their clients. It’s as simple as that. And, you know, as an advisor, and begin, all the successful advisors are to build successful businesses, and have ever achieved so much. And many of them have achieved that by doing what they think is appropriate and correct. Others have done it by saying, Well, luckily, we take our clients on this journey. So asking clients informally or formally for feedback, you know, what’s working for you? What isn’t about the relationship? What feedback do you have? And so an informal post meeting, you know, chat and say, you know, is this working for you is the relationship working, that’s one bit of feedback, you can then move on to an unknown advisor, you had a form in the reception, you know, say, Look, when you’re done, please fill us in and, you know, handed in, we just want to try and improve our service. What I did manage to do with a number of advisors was build more formal surveys, which would then go out to their client base with very specific questions around a number of issues. In two or three instances, I’m convinced, based on the feedback and three advisory firms to host what I have you read about in terms of client advisory boards, or client advisory panel. So in short, what that really is, is an independently facilitated, which is what I did advisory panel in which the advisor or a number of advisors would invite eight to 10 to 12 of a, let’s call it the a segment clients to sit around a boardroom table and what the objective there was, was to get feedback both from them, but also to reflect on a survey that had been done previously. The other important thing was was to try and get to a advisory board that was very diverse in terms of, you know, you had an entrepreneur and he had someone being corporate, you had a young person, you had a widow. So it was quite a mix, because it brought different views to the table. And in one instance, we follow these app, and we suggested to the advisory firm, well, you know, do finger snacks and a glass of wine, or let’s go have a meal with these clients. One firm that I did it for a very astute businessman was part of this panel, he came to me and he said in all and I reckon he was probably in the 60s, in all his years of business, he had never, ever had an experience like that. It was broader than financial advice, but having someone that he has a relationship with asking for feedback on how they could improve how they could be better. And I think the key for me, in each instance that we did this, I had to really convince the advisor and advisory firm to go ahead with it. It was almost as if the advisor felt well, what if the feedback is negative? What if I get, you know, fingers pointed at me for things I’ve got wrong? And clearly the outcome was off the charts in terms of positive. So you know, look, I’m sure there are other advisors that are doing it, but having been part of it and seen firsthand what it meant to first leave it the clients actually, and then post that how advisory firms had adjusted their strategy based on feedback from their clients. Given

Louis van der Merwe
this theme of investing in your relationships, you know, how you’ve invested in your client relationships, how your clients have invested in their on time relationships, that seems to be coming through through the training through the communication? I’m wondering through these advisory panels, you know, you’re saying that it’s a it’s a quite a diverse group? How do you see that information being implemented and then being feed fed back to the client? Because I would imagine there’s a part of accountability to say, we’ve now told you firm XYZ, that this is what we want implemented, how do you manage that component post the meeting?

Edden Kift
So I think the two things so first of all, Transparency is key. If I’m going to as an advisor, ask you as a client to give me feedback. I would hope you’re going to expect or that you would be expecting some sort of feedback about what I have said in a way I fit into everyone else’s feedback. So surveys client advisory panels, that will was part of the process. And I said when, for example, the survey is done, you say we sent this out to 1000 people 600 or 400 responded, and I must admit, we got, say we, when I was part of the process, we got very, very high response rates, for a range of reasons. But the key was then, to feed that back to the client base. So you have to tell your clients where you scored higher, or you scored, perhaps a bit low and that you’re working on something. Similarly, the advisory panel, post that and you could do it all in one, you could have the survey results, move on to the advisory panel, and then share all that information with the entire client base. And I think the important thing to bear in mind is that if, you know, your clients say, well, we want x or y, it doesn’t mean you have to deliver it, you could say, Look, we are not going that route. For these reasons. We either don’t have the expertise, we don’t have the finances at the moment, but it’s in our memory bank, that’s something that will come were a growing business or say, Look, this is the reason why we would never go that route. So I think feedback is important. And I also think advisors shouldn’t be fearful that they didn’t have to deliver on absolutely everything. And I think constant feedback is also important. So it’s not just that one off six months later, to the client base, we have tackled these three projects, those two have been implemented, this one is slightly behind, we expect that to be implemented by then, please continue giving us feedback. It’s, it’s probably some of the easiest, but most valuable advice any wherever you are, I mean, we do that with our clients, we ask them for feedback, we ask them to engage with us, help us evolve. And I think clients clients have so much they can give back to to their advisory firms.

Louis van der Merwe
If you don’t want to focus a little bit on allocating time to work in your business and not just on your business, you know, because a lot of what you’re saying is that focusing time and investing in the relationship, but also thinking of the bigger picture, you know, and I would imagine that your business have to run fairly efficient, to get to a point where you have free time, and not just running around keeping the doors open. Tell us a little bit about the things that you’re seeing in practices at the moment where people are making their businesses highly efficient. What are the things that are surprising you? Or what are you picking up?

Edden Kift
So I think I think the first thing is that there isn’t immense burden on advisors just to open a door every morning. So you know, compliance, the regulation, so that’s become more burdensome. So the amount of time advisors are able to spend with their clients has reduced now. Regulation is the firstly, I suppose to provide guidance and to protect investors, I think that the majority of advisors by default do the right thing. So they’re compliant anyway. But that doesn’t absolve them from conforming. So compliance. And the compliance burden takes up a lot of time. So you say Well, that’s a meaningful chunk of my day or my week or month now I’ve got to find time to improve my business. And by the way, our parties clients to service. So it’s it’s a very, very difficult thing to get the balance, right. But I think having dedicated time to spend in each of those areas, and again, you know, you could have a firm that is a one man or one lady show, and that individual has to do everything, or outsource but there comes as a cost at a cost. So there’s no perfect answer to that question. I think what it does require is some structure and what I’ve seen some advisors do say well look, Tuesday mornings, Wednesday mornings, and Thursday mornings, those are booked out for client engagements. My Monday is to work on my business, my Friday is you know, my compliance or my regulatory day golf, you know, so, look, let’s just a thumb second terms of time. And the point is that seeing clients, I’m looking after clients, that’s what pays the bills. So it’s it’s very business specific, but I would have obviously accelerated significantly is the impact that technology is having on businesses. So advisors are embracing technology more and more and I think as much as COVID has accelerated the adoption of technology and the expansion of what is out there is slow a long way we can go in terms of incorporating technology efficient Key across the board, the big word is integration. What’s the most frustrating thing I’ve got to capture something two or three or four times. So integration is key. And I think related to that is, you know, scaling a business without adding staff. So driving efficiency within a business, through technology, and using tools. And, again, they’re the individuals out there who have gotten right to using your community to understand what has worked, what hasn’t worked. Those are the things that will, I suppose provide that, that step up in terms of juggling the time between compliance seeing clients, and then working, you know, in the business,

Louis van der Merwe
what I’m hearing is that, you know, there’s a, you are a business owner first, because there’s a financial plan. Now, once you start your own practice, or if you start your own practice, all of a sudden, now you were in two heads. And this idea of time blocking, makes so much sense saying, I’m going to allocate these pieces of time to Client Servicing this to compliance. Have you seen that work quite successfully in the practices? Yeah, so

Edden Kift
everyone’s different, and some people prefer to be a bit more fluid, some people prefer to be very structured, that’s why you know, you’re not going to get one size or one approach that fits all. I think the key here is, is that there is dedicated time at some point, and what’s the easiest thing? Sure, you can you can put a diary entry, you can cancel that you can pull it up, but, you know, having a quarterly half day to think and work on the business, you know, it may seem insignificant, but that’s better than not having it at all. So there’s definitely not a single approach. I think the the key point for me is that advisors and their staff need to focus on a particular aspect when they are in that space. So for example, if I were your client, and you busy analyzing my situation, and there’s a knock at the door, and someone is there with the delivery, or your compliance person is walking into, I don’t know it, but I’m the client is having his or her situation analyzed, while you’re dealing with something else. So you distracted and I think, you know, what financial advisors do is, is so important that any distraction to when you’re actually spending time looking at a client’s situation affairs, is going to negatively impact that particular client’s plan or their next recommendation, potentially, anyway,

Louis van der Merwe
yeah, this concept of kind of deep work and focus and say, This is really important stuff. You know, as a practicing financial planner, I completely relate to that, because there’s so many distractions, and you’re being pulled. And we see that this analysis work happens in pieces, because you tend to be waiting for another piece of information, you do something, and then you carry on, it reminds me almost of a production line where in theory, everything would just run smoothly, but in reality, is all these pieces moving around? Now, no portfolio matrix allows you to outsource some of the investment decision making, but your business also offers a little bit more than that. Can you maybe just explain a little bit? What are the other services that portfolio matrix offered to their clients?

Edden Kift
So, Louis, I think what I mean, primarily, what we need to do is connect expert finance, financial advice, with this precision Investment Management. And technology is a big enabler now. So I’ve been at Portfolio metrics since early 2015. And our proposition has evolved significantly, it was, I suppose, in as much as it was quite flexible, there was a fairly rigid way in which advisors engaged with us. So that has definitely evolved. We have a far broader way of engaging with advisors that cater for their own, I suppose preferences, but our primary objective is to enable advisors to be better at what they do, and that’s the dispensing of advice. But the key element, as you mentioned, is investment management, we have a global investment team, and they their primary function is to do esterification and to select managers and in that in so doing, we spoke about efficiency earlier, if an advisor can outsource that, and you think about how much time that may free up to do the other things. So as much as we are about advice and investment management, we are about efficiency as well and we certainly won’t be the answer to for everyone. And in fact, we prefer fewer deeper, meaningful relationships. You know, take a look at us kick the tires and decide whether what we offer It is what will improve your situation make you more efficient, place your clients in better position. And yeah, we’ve got competitors that do the same. But I suppose the number of other aspects that you need to evaluate in terms of dealing with any particular let’s call it provider,

Louis van der Merwe
it strikes me that often financial planners think that the value add is about selecting a fund or creating a better investment portfolio. But your experience with a financial planner was a lot more meaningful than, you know, having a top quartile fund. Even though performance is important, it’s not ever guaranteed. I want to talk about the piece that you mentioned the dispensing advice, because I think part of dispensing advice is also getting clients to take action. Like are you seeing that being improved at all? And do you think that is a problem at the moment that we are over dispensing advice?

Edden Kift
So again, it’s obviously difficult to comment when there are so many practices, we have the relationships that we do have, and I said it earlier, I think we deal with world class, quite literally world class financial advisors. And I think through their own development, they as advisors are finding the right balance when dealing with clients. It’s not a case of and dispensing sounds very one directional. Our clients engage in a two way relationships, I suppose the dispensing comes at the end of it all during key moments and transitions where someone says, Well look, as an advisor, you’ve employed me as an expert, as you would a doctor or a plumber, or a lawyer. Here’s my view. Here’s my advice. And I think a key role of the advisor, though, it’s all very well to say, well, here’s the advice. Now Mr. Client is going to take your advice and go off and do it him or herself, that the adviser is part of that journey. So dispensing advice is probably the easy, but it’s actually then saying, right, I’m going to hold your hand through all of this, let’s go on this journey. It’s not a case of giving directions and saying, Well, I can get from here to point B, you turn left, go right. And over that bridge, you said, right, I’m going to walk this path with you. And I’m very by your side. So I think I think dispensing advice is critical. But the holding your hand along the journey is probably in my view, the overwhelming part of the relationship, that’s going to determine how successful that particular client strategy and the outcome of that strategy will be.

Louis van der Merwe
I hear you, it’s almost like the relationship starts after you dispense advice. Yeah, let’s now work towards implementing these things and get you on track. Whereas if you look at globally, a lot of the feedback that we’re hearing is that clients don’t implement advice that’s given yet, I think we’re seeing in South Africa that the advisor is still very much intertwined or involved in implementing advice, maybe it’s because we come from a sales culture. And maybe it’s not such a bad thing,

Edden Kift
I think a lot goes into the way an advisor initially engages with a new client, because you know, I’m going to feel comfortable, I can buy a new car or a secondhand car. So much is about my experience initially when I walk into the showroom. So the chances are that if I feel comfortable, where I’m about to make a purchase, and that I had to, you know, equate advice to a purchase, but establishing rapport and trust as quickly as possible, will have a significant bearing on how, to what extent that advice is implemented. So, you know, if if a client is able to sense that trust from advisor, very early on, my guess would be that the implementation rate would be high. But if it’s a case of a cow, I’m not really sure, but I’m going to work with this advisor, the relationship doesn’t really gel it doesn’t develop, then the chances are probably just as great that, you know, that advice strategy will be either just cut off at some point, people will deviate, they’ll do their own thing will they’ll go and look for advice elsewhere. So So I think, I think the ultimate implementation of advice is very dependent on how quickly the relationship is built and the degree of comfort that the advisor installs in the client and it’s a hard thing to do because if I come and see an advisor, and I have an objective to retire in 20 or 30 years time, when am I going to judge that advisor Have I got enough money the day I’ll walk out of my job, but I’ve got, then it’s too late. So I have to look for markers along the way that tell me that this person is working in my best interest, and that they’re adding value. And and I’ve mentioned the sort of the value proposition, that sort of lightbulb moment in dealing with my advisor. So I’m, I’m completely clear on what value he and his team had. am I likely to deviate? Not? Am I going to stick to my strategy? Absolutely.

Louis van der Merwe
Yeah. am I experiencing that value? Correct? Because I’m not yet at retirement, correct? It didn’t. I want to talk about financial planning relationships going bad. Know, what happens in a scenario where a relationship with a client doesn’t work out? I don’t mean claims and complaints. I just mean, hey, this isn’t a good fit anymore. Have you seen firms deal with that really well, in terms of kind of onboarding or graduating a client? And? And if so, how?

Edden Kift
You look? So there are a couple of ways if you’re a multi advisor business, you’ve got to try and understand is this a? What would we call it a disconnect between two individuals? Or is the disconnect between the client and the firm? So there is always the potential to shift the client to another advisor. So I’ve seen that happen. But what I’ve also seen as advisors saying to clients, look, this relationship isn’t working. I think what also they need to just take a step back and say, Well, why isn’t the relationship working? Because if I’m seeking advice, I see value and advice and advisor is, you know, providing the right kind of advice and on a journey with me. Unless there’s some other personal issue, why would I want to deviate? So from from that relationship, so I think where it isn’t working is often where the client is questioning, or second guessing, or not able to understand the value of the advisor in that relationship. So again, it’s a two way street, I don’t want to place all the let’s call it the blame on the client. But there’s definitely something that’s a mess. And if, if that cannot be resolved. Obviously, the client can say, Look, I’m going to go elsewhere. But we’re advisors strongly feel that a relationship isn’t working. I’ve seen advisors then, you know, say at the client, look, this isn’t working, I would suggest, you know, I’m happy to hand over your file and all your information, I can recommend other advisors, that may be a better fit, or, you know, here’s your file, if I can call it that electronically, on a flash disk or whatever, you know, it may make sense for you to go elsewhere.

Louis van der Merwe
Okay, almost like marriage counseling, or where’s the problem? Can this be fixed? If not, you know, let’s create a divorce process and a divorce agreement.

Edden Kift
But I get three, I mean, if you if you, if you’re asking your clients for feedback along the way, you know, perhaps those scenarios are less likely to happen, you know, so I think monitoring assessing how things are going along the journey, rather than waiting for, you know, a big event to to sort of destroy a relationship. Yeah, keep getting the feedback.

Louis van der Merwe
Yeah, invest in that relationship and find your clients love language, what is it that they value? And what is it that’s important to that person? Not necessarily a general client?

Edden Kift
Yeah. So I think, I think that the key here is that advisors, you’re allowed to deal with clients you like. So I mean, why not just deal with people you like dealing with? And sure, I suppose, when you building a business, you are under more pressure, to you know, bring clients on board, because they’ve got to pay the bills. So you do a lot of advisors I’ve dealt with end up with these legacy clients that aren’t ideal for them. And, you know, you need to work around that. But I think that, you know, attract clients that you feel you would enjoy dealing with, and attract clients or take on clients that are there to follow your advice. And I mean, blindly, they shouldn’t question and so on. But you will, as an advisor, save yourself a lot of frustration and time if you if you, you know, engage with clients that suit your proposition.

Louis van der Merwe
Yeah, there’s so much friction, then it’s probably a sign that this relationship is not working out. Well. That’s

Edden Kift
the thing you know, and I think that there are so many potential clients out there that need advice and that want advice that to be working with clients. So are consuming time and energy. Yeah, it doesn’t make sense.

Louis van der Merwe
It and part of the discussion that we’ve had and things that that has come up quite often is the cultures that are created within firms. Like, are there any great stories that comes to mind of really cultures where inclusivity, and new ideas are created, specifically in South Africa.

Edden Kift
So I suppose there are two angles to this. I think the one thing is that, you know, with COVID, we’ve had very little time to network and get together, I missed that so much just, you know, talking to industry colleagues and advisors out there. But I think that, and I’ve seen it in our firm where we’ve had people join the firm during COVID, some of them their first job. Now, integrating people into a business remotely when everyone’s working at home, is not conducive to, I suppose, a sound integration and in the development of culture. So I think that, you know, if you go pre COVID, and the sort of COVID, 18 months or two years, you notice a very stark difference in the way cultures and firms behave. So firms that focus or place a great deal of focus on the internal culture. And it’s obviously again, difficult for me to talk about individual advice firm, because I’m not in them all the time. And I’m not necessarily an employee or an advisor. But if I take our business, one of the core components to our success and longevity, and I suppose we want a bit of the vibe that exists within our business, is this focus on culture and values. So there’s an internal focus, and and I would guess, the successful firms place a significant emphasis on internal culture and values. I mean, it’s an interesting one. Presentation, particular audience, and some feedback was passed. Back to me about this, and it was a 10 line, you know, sort of email. But the opening line was, these are people I could do business with. And that was sort of a wow moment for me, because that’s what you need to ask, suppose that’s one of the tests, are these people I could work with? Are these people that I could do business with? Me, am I proud to be part of this team, and our clients proud to be associated with a particular business? So culture is a it is a meaningful component that should be focused on when building a business and it’s not something that you can say, well, I now have the perfect culture, the perfect value system, it’s done, I can tick that off. It’s something that you need to work on consistently. And I think many firms that I’ve dealt with have got that right there. They’ve they’ve placed just as much emphasis on let’s call it the financial planning into in process, as they have on their internal culture values and, and

Louis van der Merwe
relationships. It strikes me that as a professional industry, that’s so focused on, you know, the numbers and deriving alpha and investment portfolios that a lot of what we’ve been talking about, isn’t tangible, and we can’t necessarily measure it in the specific, you know, percentages or, or basis points. I didn’t I’d love to know, for financial planners starting out maybe setting up their own firm. What’s the number one advice that you would give to them today?

Edden Kift
Wow, sure, that’s a that’s a hard one. And it’s easy, because I sit outside it. But I think that the first thing is, if you starting with a blank slate, and I suppose the point is day one, you need to start thinking about getting clients and earning money. So let’s just go this is the perfect world, get your processes, perfectly sorted out and when I say perfectly, processes are never perfect, they evolve and you improve all the time, but but get your structure correct how you would like to operate. And if you are entering the industry, as a young graduate, the chances are, there is so much that you don’t know. So connected to that would be the I suppose the benefit of linking up with people who’ve got it right. And, you know, I I’ve been very privileged to witness how advisors are so willing to share, you get the sense of I’ve got this business, I’ve got my clients I’m gonna keep this close to my chest that’s been complete opposite of what I’ve experienced. So for any young advisor, tap into what people have achieved and some people have achieved have significant gains in growing businesses, others on a journey and they’re constantly improving. But I think the point is, there’s such a broad network out there. There’s such a deep knowledge base out there. There are so many people that could help young advisors not make the same mistakes. And it’s okay to make mistakes, but not make the same mistake. So fast track that growth, fast track that efficiency. And I think the other thing, and I, you had someone on your podcast a while back, I think it was Gugu, to darky. And she mentioned that it had taken much longer than she expected to get to the point that she said, and I think that’s the other thing, you need to work hard, and you need to have patience. But find mentors, find people. I mean, you’ve got a list of wonderful mentors in the previous, I don’t know, 20 Odd episodes that that have aired. And as I said, they are willing to share, and they’re willing to share without needing anything in return. So yeah, so it’s a very long winded way of saying, Get your structure, right, but make use of the wealth of knowledge that is out there, because advisors are willing to share,

Louis van der Merwe
thank you. And I can I can second that. And you also have the gift of being able to connect like minded people. So it takes facilitator to, to to be that catalyst and actually start that process. And you know, when I invite any young financial planner, joining this industry, be it in their own firm, or just working for business to start engaging, because like, hey, like, how do we move this industry forward. And this shows all about the positive evolution of financial planning. And you’ve been a really big role in our business. And in my development, before our call, we picked up books that you led me almost nine years ago, from which attorney, which has been wonderful. And even though we still see the same type of content, these things aren’t necessarily new. It’s investing in relationship, building culture, treating your clients, right communicating with them, is there anything that you’d like to add in and that we might have missed? Or things that, you know, people aren’t talking about, that we should be talking about?

Edden Kift
Luckily, I think I think the thing for me personally, is seeing people succeed. And yeah, I get such a kick out of people achieving things. And, you know, as we spoke about sharing knowledge sharing experience, I think there is so much more we can do I know as a business, that’s something we focusing on globally is, I mean, we’ve called them advisor forums where we get people together online, hopefully a bit more, you know, in person in future and say, look, here’s a particular issue that is relevant to a particular group of advisors, or it’s an area in the industry of the profession that has not been solved. Yet Sure, their conferences and their bigger groups, but, but creating little focus groups, whether advisors are doing that independently, or whether it’s being facilitated by other institutions, or bodies, spend time and they don’t all have to be advisors. I know so many people that have such a huge role to play on almost myself on the periphery. And I don’t want to mention a whole host of people, you engage with many of them that add value to advisors, bring them in and say, Look, I’m trying to solve this problem in do you know, anyone, Louis? Do you know, anyone? I’ll go, well, there’s this provider? And why don’t you get a few other advisors around the table who may be, you know, dealing with the same issues. And let’s try and solve this together. So I think I think I think working together with your profession colleagues is something that shouldn’t be understood. And I go back to the feedback from clients, you know, build that in conjunction with how you work. And yeah, as I said, for me, and the other thing, sorry, celebrate successes, however insignificant, they may seem, celebrate successes and look back, I mean, something that I was taught many years ago, not that I’ve done it every year, but on the first of January, write down four or five key things, perhaps where you live, what your salary is, what your business AUM is how many clients you have, and just open that envelope every year and update and watch your progress. Don’t become despondent. You know, it’s a it’s a journey growing a business but the work that advisors do is some of the most valuable I know doctors and healthcare professionals are critical, but you’re I cannot emphasize enough how valuable advisors are to the community. And I think people like yourself and many others globally, are changing that perception and have changed that perception of what true advice is about, and what quality world class advisors are about. So, yeah, that’s, it’s probably, you know, my big thing is, and we all had to help, I will gladly share, I know you had Duke ronnefeldt on, on a show, he’s got a little group that he chats to, I could mention so many. Kim portlet is busy working with, you know, advisors with in the business. So there’s so many little, I suppose nodes of excellence and sharing and development that that are happening. And I think these young advisors are going to change, you know, this this profession over the next 10 or 20 years. And there’s some old dogs and old bullets like ourselves, who are very happy to share all the good and the bad

Louis van der Merwe
portfolio metrics out there. It didn’t thank you so much. This has been wonderful. Your wealth of knowledge and your passion for financial planning really shines through for people that want to reach out to you what’s the best way to get a hold of you?

Edden Kift
So it’s quite funny when I listen to this, and people go on there, too. I’m not I’m not big on Twitter, but I’m available on LinkedIn, that’s probably the easiest. And then it will probably be completely random may not say I’m actually on Facebook, I don’t know if anybody you know who’s on Facebook. But I’m old enough to be on Facebook. But yeah, so so I’m definitely on LinkedIn. And then my email address if they need to get hold of me is quite simply my name dot surname Edden Kift at PortfolioMetrix.com. So happy to chat to anyone locally or internationally. And I’d happily share further information on any of the aspects that we’ve spoken about.

Louis van der Merwe
Brilliant. We’ll add your contact details in the show notes, Edden. Once again, thank you so much for being a sponsor, and being here today to present portfolio matrix.

Edden Kift
Thanks, Louis. I mean, it’s been a real honor as I said, and thanks for the beer and you know, a portfolio metrics along with you know, the two other sponsors, we are incredibly proud to be part of this. Thank you for the opportunity and to x y for the opportunity of being a sponsor. It’s it’s it’s been fabulous and I love listening to all the podcasts. Thank you.