#36 Gustav Neethling – Transcript

Louis van der Merwe
Welcome to another episode of Financial Planners South Africa. Today in the studio I have with me Gustav Neethling. Gustav is a good friend, a certified financial planner, a founder of a financial services provider around the corner from us. He is passionate about technology, moving the industry forward. And you are in for a treat today. Gustav, thank you so much for joining us.

Gustav Neethling
Thank you. Great.

Louis van der Merwe
So for those of you that haven’t seen good stuff around, I know you started out your journey with one of the insurers. And after about eight years you decided to build a financial services provider. But I’m curious, how did you end up in financial services? What was that decision before you joined? This insurer unpack us a little bit your decision making and how you got started in this industry already?

Gustav Neethling
Thank you very much. So my my background is quite interesting in the sense that I went to the University of Stellenbosch. And as most kind of first year, students, you don’t really know exactly what you want to reduce, you started to kind of play around with the subjects. I bounced around, I remember four different become certificates that I’ve tried to kind of play around with. And eventually I think in my second year, I landed up in kind of beacom investments. And I at that stage got kind of a liking for investments. So I eventually graduated in the beacom financial analysis. And after graduating with tuberculosis, and I said, Okay, well, what do you do with this kind of graduation analysis? While you obviously do an honors in decompensation analysis, I was like, Okay, let’s do that. So, completed my honors and become financial analysis. At that stage that the honors degree was very similarly linked to the CFA Level One of the chartered financial institute, we’ve become a portfolio manager, and completed the honors degree in financial analysis and then went back to the same profession said, I got it honest, as you recommended what now? And I said, Well, it’s very simple. You’ve now got kind of one of today’s decisions you need to make. You can either continue on the CFA route and become a CFA charterholders and become very into Portfolio Management. Or you become a CFP, a certified financial planner, and you’re going to do the financial planning part. And then I asked my my professors super which one would you recommend and at that stage, this was an application you’ll prefer the University of Stellenbosch. He was very passionate about financial planning and the CFP qualification he said, without a doubt, go the CFP route, which has been subsequently often my honors degree, completed, offer the honors degree, I threw out my CV and all the insurance jumped on me because obviously being a honors degree graduate, then you add the technical knowledge. And yeah, then kind of landed up at the, at the insurance provider. And that was also a very interesting kind of phase of my life. Because if I didn’t know what I was studying, I definitely didn’t know what I was getting myself involved in. When I actually accepted the job. I still remember going through, I think three levels of interviews. And even after the third interview, I still didn’t know exactly what, what they wanted me to do. And it was only after that honest thought with your manager where they said, Okay, so now you’re gonna write down the list of 100 people, and you’re going to find them. And you’re going to go talk to them about insurance. I was like, Well, I got an honors degree in investments, why do I need to talk to them about insurance. And so that’s the starting point. I totally enjoyed my years at the at the insurer. But obviously, the difference between what happens in practice and and what we are taught at university, they your HMO support. So I also kind of fell into the industry, although I’m very proud to say that I didn’t have any other occupation. I’ve only known financial planning. And yeah, it’s my passion. And that’s why I’m very passionate about what I do.

Louis van der Merwe
Gustav, it’s wonderful to see how professional cricket has had this impact in so many lives, we’ve had quite a few guests, myself included, he’s been instrumental in shaping the path of financial planning, you obviously have a very strong background in building the technical skills, you know, getting the training, getting your CERTIFIED FINANCIAL PLANNING designation, walk us through what happens after you get your designation. Is there a need to continue study and to find a specialist field? Or is that enough? Is that the part that we need to aim towards? to ultimately get? Or do you think that’s, you know, the ticket to the game, as some are saying,

Gustav Neethling
no, no, definitely not. I think, again, if I, if I look at myself, and I noticed from a professional point of view, but also from where I am as a person, from a very young age, I’ve always embrace this lifelong learning kind of outlook. You never know enough. I recall even kind of after completing the certified financial planning, the CFP qualification or designation, if more had to do with my just my confidence to say that I felt more confident in terms of making proposals to clients. But I was definitely not not the most cleverest person in the room. And linking that, again, back to the this ability of lifelong learning, I think you can never know enough. And that’s why it’s very important to constantly have this beginner’s mindset, what to defer to so as soon as you feel that you’re the expert, that’s a very dangerous, a dangerous position to be in. The other way that they kind of deal with it is whether you have this fixed mindset or growth mindset. And somebody that that feels that they have a growth mindset is constantly is always learning always learning to improve themselves. So yes, although from your traditional qualifications, or certifications, as you get a certain qualification, but lifelong learning, lifelong, educating yourself constantly being curious or seeing the very difficult Converse questions. And prodding pushing, is something that I feel very strongly about. And that’s why when we talk about technology, later in the podcast, you will see why I’m so passionate about technology, because technology is one of those areas that constantly that’s constantly breaking down barriers and walls and constantly changing and adapting our industry. And you need to be able to adapt and change with it, and not be fixed and rigid. So as soon as you’re in a position that you think you know it all and nothing’s going to change. That’s a very, very dangerous space to be in. So to answer the question, now, very much, it’s a continuous learning, continually sharpening your skills. I think that if a CA is also trying that with regard to the CPD hours, continuous professional development, it just needs to be part of your DNA. It’s as simple as that.

Louis van der Merwe
Yeah, this concept of a growth mindset in the work of Carol Dweck, I think is critical for someone starting a business and this year, financial Emporium turns 10 years old. That means that you’ve run your own FSP for almost a decade, being the founder and one of the first shareholders in that business. How difficult was it to take that leap from? I have a comfortable job that I’ve been doing for eight years. And now I’m going to go out and do my own thing. Tell us about that time and what did you put in place before you took the leap of faith so to speak?

Gustav Neethling
Yeah, it was also a very stressful period, but also very invigorating at the same time. So I was not one of those people that made a rash decision very early on. This was also something else that I can take my hat off to physically here. When I told you which insurance company I was going to join a sec. Fantastic. It’s a great decision. But just remember one thing don’t stay longer than two years. That was his final parting words. And I ended up staying seven years. But during that seven year period obviously learned a lot. And kind of year somewhere between year two and four, I started kind of researching the ability to move into the independent space at that stage, and as most people would know, in the insurance kind of industry, you’re either tired, or what do they call multi tide? Are they effective kind of advice environment in which you operate, where there is a very firm kind of guideline, we have to stick within the guidelines. And my clients were pushing for kind of independent kind of just give me the best, not the most appropriate advice, the best advice, give me the best possible offer, not the most appropriate one based on my limited mandate. So. So I did a lot of research in terms of setting up the business beforehand. That’s also one of the reasons why I spent seven years instead of the four years, it was a very long, lengthy process for me to find the right people to join the business with me. So that was a very lengthy kind of process. Very early on in the process, I realized that I didn’t want to be a one man band. So we’re dependent on getting other people on board, and building this dream team out. And so finding the right kind of people was a was a was was it a tough task. But you know, with regards to the structuring and the setup, it’s fun, it’s a hell of a learning curve. As I said, when, when you you know, in a big corporate machine where everything is taken care of the next day you you in charge of buying paper, cleaning the kitchen and giving financial advice, or what happened to one. So it is a it’s a steep learning curve. But it’s something I won’t. I’m glad I went through that. I think it makes me a better, more well rounded person. And then all the knowledge and skills that I learned from that initial timeframe, I still apply to this day. That’s why, as of today, I’m involved in five different businesses, and that number will probably increase going forward. Because once you know how to build one business, you know, you’ve got the templates, you’ve got the blueprints. And so now I’m just replicating that with different kinds of angles that I’m approaching and kind of the the ambition, the business structures and all the outcomes that I’m trying to achieve within those businesses. So it was a fun time, I’m glad the heavy lifting is done. Obviously, with any businesses, there’s constantly changes, and you have to adapt. But as the business grows and becomes more stable and mature, the challenges are slightly different. You’re less worried about cash flow, more worried about HR as an example. So yeah, was it it was a good, good time. And I’m very happy and very proud of the team that we that we are celebrating our 10 year very shortly,

Louis van der Merwe
there is a wonderful milestone. And I’d like to unpack a little bit that that first stretch, we some people are saying it’s best to get outside shareholders to help you with capital or get a loan for the early years, where other advisors are just purely brute bootstrapping it. You know, they’re making sure that they have enough clients, they’re generating an income. We do you sit on that spectrum. And in hindsight, would you have done anything differently starting out financial important?

Gustav Neethling
Yeah. So kind of the two questions. Maybe just giving you some insight for, we introduced the bootstrap kind of route. So I supplied some starting capital, and it was a matter of just winging it. Big focus, then obviously, if you bootstrap, or do you constantly very, very focused on kind of cash flow, because money needs to come in because you’ve got a lot of expenses, a lot of overeats. I mean, that in your previous environment, you didn’t have to cover but I have to cover. So the pros of bootstrapping at the very cost sensitive, the big negative is you don’t have capital do you set up the business exactly the way that you want. And now with a knowledge that I now have, if I had to set up an E FSB, I would go there getting external capital and getting everything in place. From the word go, I think you’re going to have a much more sustainable, less stressful, more efficient that is in place by versus the kind of bootstrapping it and it’s like building a puzzle but you have to build as you kind of grow so I once kind of you get the analogy were you driving gone in one at $120 What is now but now you’re trying, you need somebody to work on the engine, it’s that kind of analogy and specifically that we’re seeing with regards to financial planners and embracing technology as an example, in the business, they first they, they serve fixated on on the revenue and keep getting the financial plans or the reviewing of the client’s kind of portfolios out that they don’t have sufficient time to get the foundation correctly sorted. So it’s a difficult convert to difficult decision. But again, if you if you have the means, maybe get some outside capital, get a very good business plan in place, get the structures, the systems, everything applies, and then just throw kind of blood, sweat and tears towards the business. That’s what I in an ideal world, I think we would have grown faster if we had that, we didn’t have that we didn’t have that benefit. So we had to kind of bootstrap and then you kind of, it’s a bit of a spook and block exercise as the business grows, you’re constantly having to adjust and adapt, and it’s just a bit more work, we think you can be box a bit more clever if you have a bit more cash in the bank. And it ties nicely into I think the trend or theme that I’m seeing playing out is that the days of a one man band, kind of these small kind of advice practices, it’s very, very difficult to build a sustainable, strong business going forward. So especially in the independent market, I’m seeing and forecasting that more and more practices will merge or move closer together. So you just want the synergies you want to have that economies of scale kicking in. And that’s why I think more and more advisors will start moving closer to each other, to work together knowing that they all they’ll have more efficiencies in their business. And those efficiencies that traditionally you get those efficiencies only from a business that’s stable, that’s been around the block. It’s got systems or processes, policies, policies in place, where if you initially when you kind of wing it and you bootstrap, those efficiencies only come down many, many years down the line,

Louis van der Merwe
you’re sometimes wonder if clients know, the early days of starting with an FSB, actually how much risk they’re taking on by dealing with someone that might not have have those things in place. Good stuff, the sense I get is that you’re an entrepreneur first. And then a financial planner, even those, even though those two are linked quite closely. You think as a business owner, and you think in the way of, of building a business, what’s the 2030 year vision of financial Emporium or at least Kristof’s version of that?

Gustav Neethling
Yeah. So the again, it’s a ties right back the golden thread when I did my, my research, when I was on the diet insurance distribution model. When I asked my clients, how can I add more value to them? Why do they choose me? Why me? There’s a million options out there? Why? Why do we do different and all of the clients refer on to the question along the same lines, I said, Listen, we have to be very honest, we don’t care how clever you are. We don’t know which financial advisors are clever and reunites. We want somebody that we can trust that likability somebody that we can relate to. So finding the right people, likeable people, people with a strong ethical kind of foundation, by default in people that you can trust your money worth. And the most important thing is that they wanted clients, or they wanted the adviser to be able to give holistic, so independent advice. But very importantly, across all the spheres of financial planning, so the product sets and that’s why we also decided on our name, financial important important being this kind of everything under one one roof, kind of advice, practice. So in our business, we’ve we look at all the traditional kind of four big product sets, investments, long term insurance, auto insurance, medical aid, and then the overarching kind of realistic financial planning. So financial planning for the tax planning, estate planning, all of them all kind of advice, less product centered kind of approaches, and I’ll view with regard to that it’s just kind of expanding on that. So we want to be better at certain areas. So I think more and more across in this specific product sets is becoming very cumbersome and very difficult to come in to remain completely independent, but be aware of all the the slight nuance differences between the products. So in our businesses, we’ve got specialists in each area, we’ve got investment specialists, that’s kind of that’s a 14 And the same with regard to the insurance side. So we’re constantly just improve on that speciality area. So I feel The future role of the financial advisor being more kind of with a financial adviser will be like the person that has the relationship with the client. But then sort of the client phones, he would phone these financial advisor, but that financial advisor, depending on the client’s needs or requirements at that stage, will then plug him into one of the specialist kind of roles. So whether it’s somebody that specializes more on the product side, or somebody that specializes more on that advice side, and they’re tied to the final kind of model for financial planning, rolling out, and as I said, our vision for financial pro important is to attract the better or the right people, and to fill in the gaps where we have either on the product or the advice side, and to get those specialists kind of plugged in. Yeah, so that’s kind of our vision, it’s, it’s very much focused on on the people side of the business, the people and technology are the two big levers that that I can pull. So technology is just making sure that the improve efficiencies across every little angle. So something that we constantly have as a feedback within the business is I’m constantly asking my people, where are the bottlenecks, ways of struggles, ways the hurdles? How can I help them achieve a higher productivity level? Where is the 1% improvements that I can help them achieve? And the other lever is just attracting the right type of the right talent? And obviously, maintaining and keeping the talent that’s already on board. So yeah, that’s how kind of a 10 year vision.

Louis van der Merwe
Brilliant, good stuff, let’s talk a little bit about the the complexities that running an independent practice brings. And what I’m thinking of is purely the amount of different products that you need to take into account the dealing with all the different product advisors, do you find it onerous in running your business through all these multiple channels that you essentially have to customize, dealing with each of these channels? Or have you figured out a way to reduce those bottlenecks, as you’re saying,

Gustav Neethling
yeah, it is a big, it’s a big challenge. Inevitably, what happens happens is the some kind of biases that creeps in. So if you ask most product providers, they always have the same ease of doing business as an example. So one way to attract visitors from financial advisors to make it easy for the product providers to deal with him. And these that get it right, by default, whether it’s the best to just product for the client will attract the business along the way. I think also something that I must just mentioned that when we started financial Emporium, we initially had to kind of focus or focus was very much along the product line. So we had myself looking at the investments at that stage. Our CRM system that we used was called Spotlight. At a later stage, a colleague of mine came in that looked more on the on the on the risk side, at that stage he was using at work. And my other colleagues that also Lotus Notes came in focus more on the short term insurance sector. And he came in with files. And the idea was we were going to cross formulate, and work on clients together. But because the client information was scattered all over the all over the show, I decided to build our own internal kind of system. It’s called Babylon, that effectively pulls in information from various sources and gives us a kind of a holistic one view dashboard of the clients. And because it’s our own proprietary software, we’ve been working on the software for the last 10 years. And we’re constantly making improvements and enhancements on that. So I think that was a stroke of luck slash genius that we did. But because we have this technology that is our own system that we’ve custom booked for the last 10 years, is that over the last 10 years, we’ve been constantly refining and adjusting and find, find tweak and tweaking the system. So that that makes it a lot easier dealing with multiple product providers. It is still very cumbersome. As I said just just keeping abreast of the latest changes amendments, technical specification adjustments on all the products that you deal with is very cumbersome. There’s no easy, easy way to get around with. Traditionally what we do is we in the different products that we try and group them along certain kind of key differentiators. So when comparing products, we try and choose completely random products are not similar in nature. So there’s similar products. There’s a way of filtering them out. So we end up in a better position to identify which of the products to work for the client, you we all know it. I mean, when you sit in front of a client and you provide 12 different options to the client, you lose the client completely. So it’s our responsibility or as the financial planner to distort and simplify the information. And then to effectively give the client one, maybe two choices, and they never discussion around which of the two and why there are two different options all the best. It is a challenge and being independent. And I know the FTC has made rumors with regard to if you, if you want to be independent, you need to be, you need to offer the entire market, I don’t know how viable that option is. So it is a challenge. But, you know, we taking shortcuts where we can and technology being one of those big things that we that we that we focus on,

Louis van der Merwe
I think there’s an independence is maybe getting less important. And that is maybe becoming product agnostic, and saying, Hey, we can help you with the products that you already have. But when it comes to implementation, these are our preferred providers. And maybe that is good enough, as opposed to being 100%, completely and utterly independent, which is what the regulator is indicating. And I agree with you, I think the onus that it places on the financial services provider is just too big. And that means that over time, advice becomes expensive. How do you figure out what how profitable a client is? And where do you price, your advice? Should it be across the board? Or is it more individualized? What’s your thinking around that?

Gustav Neethling
Yeah. So again, we see the clients as the client and utilizing, again, technology, with the likes of a calm space and own our own internal system, we’re able to very accurately determine what the what the income is from a client. Again, the the starting point and idea behind financial important is that if you have one client, whether you’ve got multiple kind of touch points or multiple hooks into the client, you don’t necessarily have to have to overcharge in a specific area, but that the client in totality will be sufficient enough to be profitable. So we’ve got various client segmentation categories that we have, being a young growing business with the average clients age, probably in the mid 40s. The fall, the bulk of our clients has fallen, or wealth accumulation phase of their lives. But we just segment the clients based on on criteria that we’ve identified works well. And the clients will then be able to move across the segmentations. And then we got an accurate idea of what our cost base is. So we can kind of reverse engineer to get you what what what is our fee, to get your fee, to be able to determine that we still run a profitable and viable business going forward.

Louis van der Merwe
Good stuff, I can hear that you’ve got your finger on the pulse of this business, and that these key things that you look at, do you have some kind of key performance indicators when you think of your business? Or is are these things that you know, you’ve developed over time that you know, okay, I need to think of this. And I guess my question is, how do you keep track of the health of your of your business? And what do you look at in detail? And what do you just look at, in terms of bigger picture, hey, this is moving in the right direction.

Gustav Neethling
Yeah, it’s funny that you mentioned that really, I’m actually busy. Now as we speak, it should hopefully go live again, this was again, the the benefit and the power of having your own internal systems. So kind of recall it, just the key metrics that we’re going to measure. So if you come and visit our office in about, I’d say about a month or so you will see a big STV slapped against the board, which will reflect on an ongoing basis the metrics of the business. So it’s very important to me that everybody in the business is acutely aware of the value that they add to the business and how they a small portion out a contribution pushes the needle in a certain direction. So with regards to the metrics that we that we tracking, and we’ll be checking, and we’ll constantly improve and fine tune that going forward, but the big thing, so the number of clients, how we segment the clients, our income, what is upfront what is recurring, the income sources across the product sets. So again, these that are familiar with with comm space are a very nice analytical tool. So we are playing around within that analytical capabilities. With regards to internal system. I know exactly how many telephone calls every person likes. I know the amount of workflows or tasks that We what we call every, every assistant completes that timeframe. So how long does it take to submit a specific claim or to get something done? So we’re tracking all of those numbers in terms of productivity, the amount of what are some of the other metrics, obviously, the bigger picture numbers, the assets under management, total premium, premium collected on the marketing side. So we, the clients write in review the individual members of the staff, but also the business as a whole. So we track those kind of numbers, those are kind of the big one. So a lot, a lot got to do with productivity. So even included in that amount of sick days. And it was awful. It’s very interesting. But I know exactly which of my staff den to kind of call a spade a spade with maybe taking liberties with regards to security if and which don’t. So now we’re going to see, with regards to our way that we APPRISE, all of our members, those are kind of some of the variables that will take into considerations. But productivity, how efficient are you in doing a job? How quickly do you get the work out? How, how could accuracy information, and the normal standard big numbers that everybody likes to follow assets under management, premiums collected, and just the composition, just of our income is something that I’m very, keeping a close eye on. So what income comes from which sources is an ongoing need to occur in their advisors that we’ve all got our our expectation or targets, ie cheating the target? Those kind of numbers. So very important for us. In the past, I always kind of be knowing your guts with regards to if the business is doing well or not. But now I’ve gone kind of full tilt. And I’m going to track a lot of metrics. And we’ll probably expand on this on an ongoing basis, because it’s going to be the barometer or the thermostat of the business, are we doing the right thing, and are we moving the needle in the right direction. And very importantly, also for me is that at the moment, we’ve got advisors that deal with clients, but it’s more than admin support staff that actually do a lot of the work. And I want to be able to show them clearly articulates and show them in terms of how they value and how they contribution is pushing the enterprise in a specific direction. So that’s why tracking these metrics is something that I’m very passionate about. And my deadline is end of q1. So I still got till the end of March to get the project up and running.

Louis van der Merwe
Brilliant. I know how much work and effort goes into tracking and updating something like that. And like you mentioned, you know, you’re building a template for running a business, and then you can just, you know, replicate it. If you had to only keep your eye on one number or one figure on that dashboard. What would it be for you,

Gustav Neethling
just the number of clients. I think if the number of clients continually increases, I know that the staff, the people, their advisors, or specialists sitting behind the scenes are able to add value. So as long as the number of clients kind of improve increases are fairly accurate, that there is a caveat, obviously, we all got a limit or cap. So coupled with that the number of the size of the team as well. So you can’t have the number of clients just kind of increasing and have you or your staff kind of pushed to the limit. But that’s it, it’s like, that’s the one number because if that client brings whatever way shape or form, we add value to that client, that is, by default going to be a profitable relationship for us and for the client. So as long as we know that the client base is is improving, that’s exactly what I want. I sometimes wake up with a cold sweat in the middle of the night thinking, Gosh, shouldn’t I just have 20 clients and only doing this once? That would be such an easy business? And yes, it would. If you get 20 ultra high net worth clients, that would be very easy business. But that’s just not what I what we what we want to try and aim to achieve. So our business is very complicated. It’s very integrated. But I think we’ve got a firm grip on what we do and how we do it. So it’s a complex business, but I think it’s it’s going to be very valuable business 10 years down the line. So that’s why they said the number of clients would be my number one. The other reason why number of clients is important is that we all know that your clients is your best marketing tool out there. So if a client feels confident enough to recommend you to somebody close to him, you know you’re doing the right job. So by default that would mean that you maintain you retain your existing clients and you you attract more new clients from your existing client base. So just the number of clients I would be happy with

Louis van der Merwe
that makes so much sense good stuff in terms of building your business and kind of that would be your top line number growing the amount of clients, you mentioned that you serve your clients and how happy they are with individual interactions. Would that be something like a net promoter score? And how did you create that? How did you come up with that solution to track that thought.

Gustav Neethling
So it we still kind of kind of winging it and finding, finding our feet with regards to that. So it’s more clients don’t always provide feedback on the first kind of a or out of their own accord, let’s put it that way. So there’s a lot of nudging from our side, to ask for honest feedback, I think the tighter and the more regular the feedback loop is, the better you are because they it, it points out, it shows the blind spots in your business. And so yeah, we still also kind of fine tuning our process with regards to often our regular and the format that we get. It’s just something that we that we feel passionate about, if we, if you do a good job, tell us in return do a good job. Also, please tell us. So as I said, there’s a strong focus on this constant improvement. And it ties back into that question that you asked it beginning with regard to the mindset. And that’s why we never, we’re never happy we never content, one of our key values is excellent. So I’m constantly striving to deliver a 12 or 10 not attain or attain. And one of the ways that we are able to prove that is by getting that feedback from the client. So everybody on a regular basis, we asked for feedback from the clients, because ultimately, they are clients. And if we just listen to them, we’ll ever be client, it’s as easy as that.

Louis van der Merwe
Absolutely. Henry Ford said you might have a faster horse. But I’ve completely understand getting an extra piece of information in to help you create your strategy for the future and think about your business. And Gustaf when you think about 1520 years aren’t in the financial planning in a profession, as we’re all trying to move to. What do you see as the most important trend, you’ve mentioned a couple of things that the advisor is becoming the relationship manager with a strong support network that we’re moving away from, you know, one man bands and into ensembles or, you know, groups of advisors. What are the trends driving this, and what is your crystal ball, say the next 15 or 20 year olds,

Gustav Neethling
so it’s all driven by the internet. So an information the reality is 2030 years ago, information was limited. People didn’t have access to information, they thought you had to go and consult this ie specialist to get an access to the information. But the internet is kind of just backing down that barrier. So going forward with it Robo advice, or artificial intelligence or whatever, but the information will be freely freely available. So a key trend and I think that the more forward thinking advisors already know this is that if you are positioning yourself and you’re going to be an execution only kind of advisor IE, I’m the middleman and helping you execute a sale transaction or implementing new product policy, that’s going to be a very, I don’t know how long that’s going to be around. So we need to pivot and know that information is freely available clients still need that education or they have so the information is available. But the role of the financial advisor is there to kind of educate and guide. That’s why there’s this big shift towards kind of life coach and coaching and financial, holistic financial planning is more about the big picture, the information is available and then what I’m seeing is more and more clients will then self execute. So, a client would come to you the information is freely available. So the client would have already done a bit of research, but they would then consult you and you with your skills and expertise and knowledge would be able to kind of bring all of these multiple aspects together into a into a holistic kind of financial plan. And the financial plan will be discussed and then at the next result they have is the execution of of a couple of things that the client will then self execute again, I think the role of the financial advisor will definitely shift more towards kind of the advice spots, the life coaching elements and less on the on the educational and less on the execution side. Another big trend that I’m seeing that we also dive in quite deep in is with regard to crypto assets, cryptocurrencies or digital assets. I think the world is moving very quickly towards a more decent decentralized world where the big product providers, whether it’s the banks or the insurance or the asset managers, the the power grip will will start to slip away as people get more comfortable to operate and work into in a decentralized environment where there’s more direct peer to peer kind of channels that are opening up and cut the assets and digital assets will play a key part in that. So we know that digital assets are not regulated in South Africa, and it’s probably still going to be quite a number of years, but we’re positioning ourselves at the forefront of that area as well. I myself am a certified Bitcoin professional already. And we all sharpening our tools with regards to the vast amount of investment options instructions that will come down the line. And so yeah, I think in the in the future, just like currently, when you when you’re a child, you have this kind of this message or right of way do to move into adult world adulthood. In that passage, depending on your cultural background, it might be something as simple as learning how to shave or cooking a meal or doing your own laundry. And I firmly believe one of the other things that will happen is managing on finances. We all acutely aware that the schooling system in South Africa does not you in how to manage your own finances. And it’s something that unfortunately, we’ll have to you win and you learn on the on the flyer as you as you grow older. But I think more and more financial planning and financial management will become part of this, this rite of passage for you to become an adult first you have to manage your your your your finances, hence the book, manage your finances, like if and grown up that that that’s how things will kind of play out. And that’s why the execution role will be there’ll be a layer less focus on the execution but are off as financial flier planners will not will not disappear, you’ll just need to adapt and change into the this new world in terms of how we will operate and interact with each other. See it very interesting. Mix 1020 odd years that’s, that’s flying away too fast.

Louis van der Merwe
These are massive shifts coming and I think what I’m hearing is that you saying the things to focus on is relationships with the client. And it’s also this wave of continuing to invest in digital assets and and still becoming valuable for your client actually having conversations around that. What surprised you the most through your learnings around becoming, you know, certified Bitcoin professional and learning about these digital assets? Is there anything that maybe challenged your assumption or changed your mind on on some of the aspects of how it works? Or obviously,

Gustav Neethling
those are all familiar with the CEO of Bitcoin, which understand that Satoshi Nakamoto that that wrote the white paper on Bitcoin wrote it after the collapse of the 2007 and eight great financial crisis at that. So this was somebody obviously a very intelligent kind of individual saying that hang on, why is all the wealth kind of kind of locked into kind of the Wall Street all these big corporates? Why are they in charge? Why is it kind of why do you need to be proved kind of investor? Why do the rich has access to certain investments that the poor don’t? And those are a lot of kind of the difficult conversations that this this digital assets and crypto cryptocurrencies are trying to solve, where, where everything will just be split more distributed more equally between everybody on the planet, it’s not. We all know how the income disparities in South Africa are on a global status again, the top 1% of the wealth out in the world is consolidated and so forth of quite a few people. So this kind of decentralized new world that we’re heading into will just distribute everything and much more evenly. And it is a bit of a witch political kind of affiliation, you kind of leaned more towards I think everybody would say that that’s not a bad idea. And that’s why everything that’s got to do with cryptocurrencies and blockchain and everything is it’s got to, it ties back into this where everything is is, is transparent, it’s immutable. We can all see this. Everything is shared more equally amongst everybody can benefit everybody can take part and participate in this. So Yeah, as I said, one of my why and my initial kind of issues that I had with my initial, my first employer was this limited mandate that I had. So I wanted to give advice on multiple products, and but I was limited. So we all yearn for that freedom. And I think digital assets and cryptocurrencies provides that freedom, and flexibility. And I think that’s why I’m very passionate about that. And I think it’s going to be in the next five to 10 years. As adoption, starts picking up, we’ll all just kind of engage with it on a more regular basis. And ultimately, we’ll all benefit from it.

Louis van der Merwe
Because of what I’m not hearing is super returns. In FTS going viral, bringing you in, you know, millions of dollars, I’m hearing democratization and access to financial products in structures that people previously didn’t have access to. Do you think the investors expectation is aligned with that? And do you see that through the conversations you’re having with clients,

Gustav Neethling
you’re obviously at the moment is still very volatile. So a lot of people get lured into the into, into the market, based on on very high kind of return expectations. Sometimes it’s very easy to to achieve those higher return expectations. But as we all know, there’s a lot of risks involved as well, on a fairly regular basis, this is hex space, risk space code that goes bang, that goes, bang, there’s a lot of things that can go kind of patient, and it usually ends in tears. So I tend never to lead with that kind of benefit, because ultimately, that’s the benefit that the reason why a lot of these returns are so high is it’s kind of to your money into the into a specific protocol. And we all know it’s not sustainable. So over time, those returns will kind of, we’ll start to calm down. A key chain that we’ve been tracking this entire years is how the technology, stocks and crypto assets are moving in sync and are correlated to each other. So all that I see is initially is that crypto assets, we initially we have assets and equity bonds, property and cash, I just see cryptocurrency or digital as being a kind of asset class that will be added into a more holistic portfolio. And it’s got more to do with regards to diversification and getting getting something completely different. The return expectation, that’s something that the client needs to advise me to manage with the client. And it’s exactly the same whether you’re going to equity fund or balance fund or into money market. So we tend not to lead with that. But at the moment, we do see abnormally high figures that that are able to be generated on one specific protocols. But yeah, you just need to, you need to educate yourself and be aware of all the risks that are involved as well.

Louis van der Merwe
I completely agree with that. And I think it goes back to this theme that you’ve has been playing out over your career of spending time upskilling yourself, and only then taking action. And maybe it gets to a point where you know, we all say, Hey, we got it wrong. But if you get it right, I think you will be far ahead of the curve in terms of helping clients with this. And it’s it’s trying to predict what the demands are going to be from our client base. And, you know, it can never be a bad thing, just exploring this. What else do you think advisors should be spending their time on to make sure that they’re still relevant and valuable 15 or 20 years from now,

Gustav Neethling
so to speak, just kind of practice management, it’s doing the same thing. But more efficient, better, quicker, faster, cheaper. And again, that’s where technology is a big enabler, a big lever that you can pull to, to help you with regard to that. So there is a million things that go into running into a business. And, again, if you have this growth mindset, if you have high expectation of yourself in terms of what you want to achieve. You’ll focus on every single element. And as I said, as I mentioned earlier, we try and achieve just a 1% improvement across all the multiple facets. So just practice management that never get stuck in there that never, never be and never be too old or too clever to grow and change and adapt. That’s unfortunately a big thing that I still see with some of my older colleagues that they just they feel very secure, very safe in the what they’ve accumulated and what they’ve built up. For the last 20 3040 years, and now there’s a big evidence in terms of changing, why do I need to change it’s been working for the last 40 years, it’ll work for the next 40 years, that mindset is a very difficult and very dangerous space to be in. So constantly asking difficult questions constantly pushing back, constantly evolving, constantly adapting. So just becoming comfortable with change, I think is a big is a, it’s something that’s very uncomfortable, I recently just moved house. And I can tell you, it’s a very painful process. But I’ve been in the new house now two, three days, and I’m already kind of accustomed to the new house as well. So I think just part of my DNA is just getting comfortable with being uncomfortable, that kind of kind of outlook. And I think, as I said, with a financial planning, and there’s a lot of moving elements is loving a lot of moving parts in the business. And I think it’s important for you to be comfortable with being uncomfortable, there’s going to be constant pushback from the regulators from the product providers. And you need to be able to adapt and change on an ongoing basis. So you need to be nimble, you need to be liked, you need to be able to move quickly,

Louis van der Merwe
Gustav, and with that pearl of wisdom, I thank you for joining me today, you know, the show’s all about the future evolution of advice, and you will definitely living it out through building your business through working on your skills. And it is a pleasure to have you here today. I wish you all the best and all the success with it. May it last for a very long time. Thank you.

Gustav Neethling
Thank you very, very much for the opportunity. Yeah, I’m very passionate about the industry. I’m very passionate about optimistic, at least about the future. I think us and and South Africa in general, we’ve got a very bright future ahead of us. So I’m keen to take part and see how the landscape changes and develops over time and thank you also for your thoughts. You are very much a forward thinker and you you definitely giving back to the industry. I wish I had more time. But my time is stuck in the in the conscious but thank you very much from the industry for the value that you add to the industry as a whole.

Louis van der Merwe
Thank you Gustav. We’re in this together until we see each other again.