#342 Chris Smith – Transcript

Ben Nash
Hey guys, Ben Nash from the XY advisor team and today I’m pumped to be here with Chris Smith. Chris is a founding partner advisors private wealth where he’s been going for a bit over two decades started there in 2001. Chris has been basically won almost all the awards. He’s been featured in the Barron’s top 100 advisors list, and yet other awards including Best client service top financial advisor, IFA excellence, investment advisor, SMSF advisor, I probably could keep going on but, you know, we’ve only got 30 minutes, so I won’t, Chris, thanks for joining us me.

Chris Smith
Great to be here. Ben.

Ben Nash
Mate, I thought maybe a good place to start is giving us the the short version of your journey in advice.

Chris Smith
Yeah, well, 21 years, so Well, 23 years being an advisor, there is a short version. And it’s probably more interesting than long version to your listeners. But it goes really goes by really quickly, obviously, life’s a bit like that. So I started. Fortunately, I was offered a job as a trainee advisor and 99. Fresh out of universities, with a sports management degree of all things, grand plans to become a CEO of Australian cricket or something similar, that transpired to be a short lived dream, given I’ve never played cricket for Australia. And that’s the only way to get jobs there at the time. So I turned my head to something else. And the combination of, of maths and people was really that combination that that brought me to financial planning. So I took a job as a trainee advisor, which I guess amounted to cold calling prospective clients for the management taught me a hell of a lot about resilience and, and talking to people and, and just being genuine. And turns out, I was pretty good at it anyway. But just because I loved what I did, I love sharing financial advice with people. So two years into that the firm I worked for, was sold. And the group that bought us was very much from the realm of distribution of products. So they were pushing products and quotas down our clients throats, which suited the planning group, not necessarily our clients. So I lasted a week there. And we’re actually on the conference in Cannes, at the time, when the Twin Tower attack happened. That was the great launch of the new company merger. But I got back to Brisbane a couple of days later, and spoke to my wife, who was at Ernst and Young at the time, and we had sort of a shared dream eventually to run around business. So I know this is the short version. So I’ll try and fast forward to the point where we start advices we work from home, sitting around the kitchen bench designing, you know, our logo and our ethos and, and figuring out what sort of firm we wanted to be. And honestly, that part came naturally because I already knew, looking after clients first looking after their interests, and building long term relationships was the key. And that’s where our interests really align right, making money for our clients is by, by default, gonna make us money over the long term. So about a year later, ironically, that firm I left wasn’t doing so well. So I moved back into the space that they occupied in Riverside center and took the space off them and started the first office of vices. And two of the partners that are with me now and one of the other partners who actually hired me, and my first job came back from Sydney, and within a short space of time, vices had formed into a cooperative partnership that we see today. And has grown to, I guess, 31 or 32 staff, including my wife’s tax business that is part of ISIS now, looking after our 500 clients, and nearly a billion dollars of client funds now.

Ben Nash
Wow, that’s impressive growth in 20 years is a long time, what would you say have been some of the biggest shifts for you guys in what you’ve been doing?

Chris Smith
Look, the biggest challenge was trying to become a businessman or, you know, 25, I was naive enough to think I could do this ignorant, ignorant to the challenges that would help with running a business and being a practitioner. So I think what we had to change over time was was our capabilities and skills in managing a business to ensure that vices would be a sustainable practice and be around for the long term. And we had to get very good at running a business so that we could grow and employ staff and keep them motivated and keep them you know, incentivized to stay for the long term so that we could sort of share vices with more and more clients and grow to the size we are today and hopefully beyond.

Ben Nash
Yeah, it’s an interesting one. I know for me personally, like when I I started my business it was because I didn’t want to have I didn’t want to have a boss and and there were a few things that I wanted to do a little bit differently really love being an advisor love working with clients and started the business, not dissimilar to you is just myself at the start, and I wrote my wife enough for about a year, we work together and basically just Yeah, servicing clients, but a couple of years later made the decision to start growing and more into a business and growing a team. And it’s been, you know, the five or so years since has been a whirlwind, because it’s a whole different and other set of skills that you need to learn, how do you recruit? How do you manage? How do you onboard? How do you operate, and all of those sorts of things? What have been the hardest parts of that for you guys?

Chris Smith
Well, Tyler, just reminiscing about everything you just said, and, and, you know, the enjoyment that comes with running a business as well as the enjoyment that comes with providing clients with outcomes. And, you know, having them say thanks, and hug you and so on are in the two totally different experiences, but equally rewarding. And, but the biggest, I guess the biggest thing was making sure that you know, I could be a good boss, and be a mentor, as an advisor and sort of, you know, if you’re, if you’re genuinely focused and motivated on sharing the success that you have with your staff, then it becomes very easy, it’s not me versus them, it’s certainly all about them. And when they’re better when staff get better and, and grow into what you know, they can be, then you’re going to be rewarded just from the benefits that come with that as well. So I think what we needed to do was trust our staff and empower them to make decisions and, and set challenges for them to evolve into and, and as they achieve those things, you know, it sounds stupid, it’s like seeing kids grow up, you know, it’s, it’s, I’m proud of how good these advisors and staff that we’ve had for the long term, what they’ve turned out to be.

Ben Nash
What’s your, what’s your biggest hack for getting the most out of people?

Chris Smith
Treat them like adults, I think genuinely, people want to come to work and do a good job. And so the great self control that I had to apply to stop jumping on little things, which were just irking me, you’ve got to realize which battles are the ones worth fighting. So I think that that takes a lot of self control. And probably the reason I became my own boss is because I didn’t have a lot of self control. So that’s ironic. So you know that a day in the life of having a staff member made me become a better person anyway.

Ben Nash
Yeah, it’s not easy in particularly, like all people are different in you know, how you communicate with them, how you relate to them, and that sort of stuff. I know, for me, I found that to be quite challenging, because not all people want to be told the same thing in the same way or not all people connect with the same thing being told in the same way as well. So it’s probably not too dissimilar to what we do with our clients. But you’ve got to adapt that that what you’re doing to the, to the individual and the situation as well. Yeah. What, what are you guys focused on in the business today? Chris?

Chris Smith
Well, we’re focused on the next level of growth, you know, we’re expanding our footprint on the eastern seaboard and, and the silver lining that came with COVID was, you know, your reach these days is far greater because people are a lot more accepting of web based discussions and you don’t have to see everybody in person all the time. So our big focus on the moment is how do we how do we take what we’ve built which is a very good foundation in running a financial advice business and getting clients great outcomes, and and figuring out how to scale up even bigger to share that with more and more people?

Ben Nash
And what have you done what’s driven you growth to date?

Chris Smith
Look, you know, being great at what you do, I mean, the the never ending pursuit of excellence is a is an ethos we have you know, it’s a line we sort of don’t just throw around but live buys. Once you once you make a promise, and you start to deliver on it and and you see how clients respond to that with referring you more people and trusting you to an even greater level, then it’s a self fulfilling prophecy as you just keep doing that and you just get better and better. So part of our organic growth just came from looking after clients and then those clients trusting us enough to share that with their friends and colleagues. So that’s not any easy thing to do is to recommend someone to a financial advisor. And so we make sure that we’re we’re very conscious of the levels of service that we deliver to everybody. And we don’t want to disadvantage existing clients by taking on too many clients and watching that suffer. So we’re very careful not to let our level of advice and service decay. So we’re always looking to grow with staff, obviously, the moment is a bit of a challenge as well, with the modern environment. But just generally, I think the other I guess the other aspect of our growth in the last few years has come with our reputation advancement, we’ve engaged with some very good media and public relations firm, out of Perth, those guys that they just know us so well, that they guide us along the way, I realized that, you know, you can’t be great at everything. And that’s one thing that I wasn’t good ad is actually just implementing the media side of things. So our marketing side of things. So once we had those guys on board, they put us on a program and similar to the sort of things we espouse to our clients is develop a plan and go and execute it and review it and stick to it, and then do more of it. So that sort of led us down the path of being welcoming new clients that sort of we never thought was possible. You always hoped for it. But it’s been quite a dramatic shift, we used to probably be 95 99% referrals, maybe four years ago, now, it’s probably more of a maybe even 5050 for new clients or 6040. Certainly 60, or referrals and 40 new clients from, you know, other sources.

Ben Nash
Yeah, it’s amazing. I think these days that people are more open to doing their research online, and, you know, looking at things like media or content pieces, and those sorts of things before engaging with advisors, I think as people come to realize that finding the right advice for me is partly about making sure that you’re connecting with the philosophies of the firm that you’re potentially looking at working with. And it’s more important to get those philosophies out there so that people can buy into that, because it’s a lot of different ways. You can do advice. So yeah, I think that’s really important. I know, for us that we’ve we probably two thirds, non referrals, and a third from our client referrals. And you know, they’re, they’re both good and probably prefer if it was more, because I know that people that come from referrals there, they already understand, and that’s why they’ve they’ve they’ve reached out, but yeah, I think it’s good for advice.

Chris Smith
So even if you do get a referral, you know, that person has looked you up and had a look at your, your material online, your website and anything else that’s out there. I think that that non referral source I think is very much the difference for us, then I’m certain you’ve probably found similar as the credibility that’s established through the awards that have been established over the last few years, the IFA magazines, the FBI do a great job, the Barron’s list, you know, all of that lends a certain amount of credibility to distinguish you in that first round of research for people. And ultimately, that helps people make sort of the first filtering decision and then you make it through to the next round. And eventually, if they make it through to you, then that’s when you’ve got to stand up and honor everything you’ve marketed to say that it’s the truth. But I think that going back to one of the one of the nexus to where we are today was was on suggest some of that award winning focus we had on on participating in the woods.

Ben Nash
Totally, the first time I came across your business was in the IFA awards. I can’t recall this the actual year that it was but might have been like 2018, or something like that. And I was like, Who the bloody hell is this Chris Smith guy on my, like every single award and we just started getting involved and was really pumped to be a finalist in a couple of the categories there. And yeah, it’s it’s amazing. I think it is I was just took chatting to another advisor. And those industry awards are a little bit insular with the exception of probably Barron’s, which I think that they do a phenomenal job of marketing out to the public, and it’s probably partly a reflection of the space that they’re in around investment management specifically. They tend to seem to get a lot more external eyeballs and potentially drive a bit more business but I’d say for the other more industry based awards that it is a level of sort of validation of of your model and what you’re doing and even though it is a bit insular when it comes to And for clients to look at an advice business, then it is it’s like there gives lends further credibility to what you’re doing. And it’s not just you there with this slick website or a nice marketing message or a good, you know, conversation that you have with them. It’s like you’ve been put through your paces by people looking at your business and what you’re doing, and you’ve got that there. So I think it is an important and helpful part of, of trust building.

Chris Smith
Yeah, you know, it was pretty easy to do, Ben, when I look back on it, and love, you know, over time advisors sort of seek me out and ask me, my, my views on the world. Occasionally, when we start to talk about those awards in the submissions, and the accolades we’ve had, I always go back to tell them how easy it was to put those submissions in. And, you know, once upon a time, when we first started, it was quite a convoluted report that you had to provide and a lot of content. These days, it’s sort of fill out a box, and you’re, you’re limited in the word count, which probably helps the judging but doesn’t give you a chance to shine if you have a lot of content. But we literally just took out our day to day activities, you know, where’s our strategy map? Where’s our critical success factors? Where’s our pipeline processes, and by the time you dump that into a best practice submission, it’s already been done, documented and used on a daily basis. So not a very big effort to put into submission. And that was, I think that’s what we’re most proud of, is we we started to get recognition for what we do on a daily basis in what we thought was quite a well judged submission process.

Ben Nash
Yeah, I think it’s, it’s great, obviously, where you can leverage that stuff. And that I think the more media pieces, the more focus you put on your content, your website, your internal and external documentation of your approach to things, then it does make that easier, because you can just draw those elements in. I also find that for me, it’s going through that process for awards is helpful to point your focus at things where there’s an area where you’re not as strong as you want to be as well. So like we we’ve just done a submission for a the best places to work award, run through the AFR. And I think we’re a pretty good place to work, obviously, my completely biased opinion. But I wouldn’t expect that we would win that award, let alone probably make it through to being a finalist. But I look forward to that process. Because they say are, you know, what do you do around these particular areas of your team management? And I’m like, Oh, actually, yeah, that’s a great idea. We do do these couple of things. But maybe there’s some more things that we could be doing here. And what are your benefits around X Y, Zed? And then you go, Oh, yeah, actually, we should have that. So it can help you sort of, you know, you can use it as a tool to help you shape what you’re doing a little bit more so that then you evolve and grow for the future. And I think that’s something that Brad Fox told me way back when when I got involved in the AFA is Rising Star Award that it’s like, just submit and expect to not make it through because they’re going to ask you questions, it’s going to force you to think about what you’re doing. And then you’re gonna think about it more, and you probably level up in a couple of areas, and then you can apply again, and then you have a better chance because you’ve you’ve had that same focus as well. I don’t know if you’ve experienced anything like that the stuff that you guys have done.

Chris Smith
Well, yeah. And how powerful is it because even if you don’t sort of end up winning the award, the benefit that you take back to your business on a day to day is immense. And that’s that’s where it really counts so transpires into the day to day looking after staff. It makes you question a lot of things that will probably blind spots in your business. And as you say that I’m starting to think Oh, my God, I’m not sure whether we even go close to getting a submission together for some of those criteria. But

Ben Nash
well, I think that one’s still open. So there’s still time Chris, you’re gonna get involved made some I’m interested you you have a team you mentioned 30 odd at the moment, which is, which is a big team. For a business. For me. I’ve really, one of the things that I found quite challenging in my business is how to grow the team over time and how to how to structure the growth of an advice business. Obviously, there’s some important roles then and sort of jobs that need to get done in an advice process. But I found that there’s a lot of different ways that you can grow you know, between onshore offshore we are currently working towards we’re working with like advice, Pollard’s where we’ve got a senior advisor and associate advisor and a power planner sort of working together. We only really moved to that system about no in the last four months. What have been the big sort of lessons for you and how have you tackled? How like figuring out how you would grow your team to where it is to Like

Chris Smith
the million dollar advisor book is the changed my life. When you mentioned pods that that publication, there’s million dollar practice million dollar advisor is another book that he’s released as well. But it talks all about pods, structures and pod approach to looking after clients. So I started out and it’s evolved pretty much the way I thought it would. But it started out as me and then sort of hire an admin. And then we grow a bit. And eventually I hired associate financial advisor to be second chair, primarily because I hated writing file notes. And what I found is the fortunate byproduct of not having to write file notes anymore is you actually teach somebody because they’re sitting next to you, and you do all the work. And so we’ve got a very much a hands on approach to training and development where if you went to a business consultant, they’d go, Oh, my God, you’ve got an advisor, or sorry, a partner and an advisor sitting in the same room for an hour and a half talking to a client, that doesn’t seem like a very good use of your time or money. I go, Well, you know, I’m training advisers on how to be next level quality advices. And so if you want that education, you’ve got to sit there firsthand and see me do it in all manner of circumstances, difficult conversations, great conversations, good markets, bad markets. And so we’ve we’ve got a development plan with our associates, we typically like to hire client service staff who have an interest in becoming financial planners. So there are they’re studying their degree or, you know, they might have completed it, and they’re going to move into associate roles. But we really collaborate on all of the advice. We do internal workshops, we do X tools, modeling we use explain quite a lot. But we, you know, we do modeling presentations, we talk about the technical side of advice, we talk about the sales side of advice, we talk about marketing and getting referrals, and then we talk about, you know, what are the sorts of things you need to do and recognize when relationships are great or good? And how do we make make the most of that. And so, I guess we’ve evolved into today, just because I never stopped wanting to be better. And the growth, I guess, forces you to learn a lot of things like, you know, the next thing might be incentive plans. So we’re gonna go and read about incentive plans and implement them and redraft them when they do work or don’t work and improve them. So, you know, my obligation went to a lot,

Ben Nash
there’s a lot to it. So many aspects on the team side, and I was chatting a bit offline, that we’ve just redone our incentive plan. And it’s, it is a tricky area where you want to motivate people for the right thing. But it’s hard to put a process around everything. And it’s like you don’t realize until there’s a gap, and then you’re mindful that you don’t want to be chopping and changing things around on the team and stuff. So it’s the there’s a lot to it. But for us, we’ve found that that particularly that pond system, as you mentioned that it does give you a good opportunity to grow and mold and Pfizer’s into the advisors that you want. And we have been we would employ the two senior advisors over the last six months. And that was very, very long process to find someone that was the right fit for the team culture clients, business growth plans, all of those sorts of things that I’m really heartened now that having three quality associates in the business means that when it comes time to find the next advisor, that they’re going to be ready to come out of the blocks firing. So yeah, I think it seems to work well, but you have a lot of different ways to be right with that one, I would say.

Chris Smith
Yeah, I think the exception was more than the rule isn’t it with with team structures and and trying to seek perfection is you just need a different personality for the whole rulebook to be thrown out and have to change a few things. So it keeps you on your toes?

Ben Nash
For sure it does. Chris What would you say like from from an advice perspective? What’s the skill that you found hardest to master to be the advisor that you are today

Chris Smith
which is probably interpreting what people say and what they really mean was was what the learning experience so you know, particularly new clients and perhaps clients that might have been with you for a while and maybe feel like it’s maybe it’s all too easy, not as interesting now as it was in the first few years like that honeymoon periods over and the seven year stretch starts. The you know, the textbooks have got it all, but genuinely you know, the art of listening and making sure that I was really late. listening for what clients really meant when they said things. And then so therefore the questioning, being a better a being able to ask better questions to get the real truth, and let people trust you enough to share their innermost fears and worries and discomfort with you. And that just comes from being genuine and honest. So, you know, people aren’t scared to tell you what they think about you. Or what they feel about their situation at the time. You know, you’ve got to be better at that. So what, you know, that was quite, perhaps it was easy, in hindsight, but I always was very careful not to take people on face value. And, you know, I guess that’s also ingrained into our review process. You know, afterwards, we ask people, How are we doing? What have we done? Well, whatever we’ve done well, getting feedback to recalibrate or fine tune the way we do things for either every client or that specific client, and making sure that we listen, you know, I guess that’s it, people want to know that you care.

Ben Nash
Yeah, I think as well, like, even on top of that, that sometimes people they they will not know, like, they will not know something. So you ask a question. And they they say something, but it’s might not be what they really think or mean. But it’s sometimes it’s like subconscious as well. So I think knowing when that comes up to actually draw it out, it’s an important part of avoiding those those things that can create roadblocks in people getting the results that they want. With that,

Chris Smith
you have to be a good storyteller Bender you to, to really get people to give you the the well thought through a thoughtful answer. You actually have to help them understand the, the, you know, the decision itself or the or the circumstances and, you know, setting scenarios about retirement, what does it look like? How do you like there’s a whole lot of storytelling that goes on that I find helps people picture. And therefore they can make better decisions, because they understand more of the decision, rather than just using their frame of reference, which is their knowledge, you know, in the in, in their years on this earth. Your challenge is to help them understand a better way of looking at the problem. And then perhaps some of the what they thought were pipe dreams, or actual reality.

Ben Nash
Yes, and it’s hard for there’s a lot of studies that show that it’s really hard for people to identify with their future selves. So I think it makes it hard for us as advisors when we’re trying to tell people to make sensible decisions today and not, you know, spend every dollar that they’ve gotten a little bit more for good measure, set up their future. So we’ve got a battle on our hands for sure. Chris, my last question for you is that if you could go back and do one thing differently, what would it be?

Chris Smith
I’m very much of the mindset, you know, you see those old movies where James Belushi did something different ends up with a totally different life, I reflect on things and I go, I wouldn’t change a thing, you know, because what if it came out worse. But the one thing that I didn’t handle well was, and I’m sure I’m not the only one. During the GFC, I think I took far too much responsibility for outcomes that were outside of my control. And, you know, if I could go back and just reassure myself that you know, what you can, you can do your best efforts, you can be honest, you can do acting your clients best interests, you can care, you know, as much as possible for them, you still can’t control the great unknowns, and I don’t, I didn’t handle it very well. It was highly stressful, like it was for everybody that was around, I’m sure. But, you know, I think I’ll probably just the what I learned from that was just always, always worry about the risks and keep people’s feet on the ground when they’re making investment decisions. So that’s, that was the good thing that came out of it. You know, that’s advisors these days with 10 year timeframes sort of never had to live through it. And so you got to pass on the benefit of your of your experience in situations like that. But definitely, I think I just took it all a little bit too personal when I should have had an equal amount of care but not spent the time worrying about you know, the outcomes.

Ben Nash
Yeah, it’s always a tough thing when the client ends up in any sort of tricky position, whether it’s because of what’s going on in markets or something that’s happened with their money if you’re sort of helping them guide the ship and the ship hits the fan you it’s hard to not take that that responsibility. But as you say, it’s like you’re, you’ve made sure that you’re aware of the risks that the risks have managed as much as they can be, but ultimately, risk is there and it exists in in everything and if we, if we if we eliminated totally no one of them making any money. So

Chris Smith
I’m sure Ben will never stop worrying about our advice leading to bad outcomes. And I’m sure I’ll never feel like I shouldn’t worry. So let me just put it into perspective is the best advice.

Ben Nash
Absolutely wise words there. Chris, thank you so much for sharing your story may really appreciate it. So much gold there. Yeah, thanks again.

Chris Smith
Great to be a part of it, Ben. Thanks.