#385 Rachel O’Connor – Transcript

Ben Nash
Hey guys, Ben Nash from the ensemble team. And today I’m here with Rachel O’Connor. Rachel is the founder and principal advisor at Flourix Wealth. She kicked off her own gig about four years ago. We used to work together in a previous lifetime. And Rachel pumped to chat I had you on I think your business was like super duper fresh about three years ago, so keen to see what’s changed what hasn’t changed. Thanks for joining us.

Rachel O’Connor
Thanks for having me, Ben.

Ben Nash
I thought a good place to start just for anyone that didn’t catch the previous episode or can’t remember. Can you give us a how you ended up where you are today?

Rachel O’Connor
Yeah, sure. Thanks. So I started in financial advice must have been like maybe 14 or 15 years ago, fresh out of uni started as an accountant quickly realized that wasn’t for me and moved into advice, worked for about 10 or so years, worked sort of working my way up from assistant through to financial advisor at a couple of different firms. And then about so then five years ago, I had my first child, four years ago, had my second child and started flourishing then. So a big catalyst for wanting to start the business was having the kids and wanting to sort of really take control over the relationship between my career and my family. Life, basically going forward from that point onwards. So yeah, started the business four years ago. And yeah, here I am now.

Ben Nash
So you’re gonna say you started because you’re a sucker for punishment to kids under two and you thought you just start a business with your free time that you that you

Rachel O’Connor
have, yeah, well, I should. Yeah, going back to that I should say, you know, that was all dosed with a massive amount of naivety and blissful ignorance as to sort of what was around the corner, both as a parent and as a business owner. I have no idea what. And yeah, I would, I would say, in all honesty, the first couple of years was was rough. Like it really sucked. And I had a lot of doubts about whether I’d made the right decision. But now looking back, I can say, yeah, absolutely. It’s, it’s, it’s working for me. It’s working for my family. And yeah, I’ve got no regrets.

Ben Nash
Nice. It’s, it’s good to see. And I think that healthy naivety is something that’s borderline necessary to start a business or start a family. So you’ve killed two birds with one stone. Yeah,

Rachel O’Connor
no, you’d never do anything. I think if you knew exactly how hard it would be, but yeah, anyway, here we are. So it’s all good.

Ben Nash
That’s it. So tell us what have been some of the biggest shifts in what you do, you know, in your business over the last four years?

Rachel O’Connor
It’s hard to say I guess it’s been some any massive shifts, I’d say it’s just honestly, it’s just been really incremental progress. Over the last four years. There’s definitely been some sort of ups and downs in terms of different strategies I’ve attempted and then sort of how you know how we’ve adapted to those working or not working and things like that. But no, I’d say it’s really just been an incremental. Like it just just step by step one by one process over the last four years and just tinkering and refining the whole way along. Yeah, there were no kind of major, I would say, I’m still now doing very similar work with very similar people to what I was doing when I started the business four years ago.

Ben Nash
Well, I know at that time that you were quite considered with how you went about it with your model. Like he specifically wanted to work with younger people and wanted to work under a structured sort of holistic model coaching, helping people with their whole financial world. So I suppose that makes sense that that has evolved over time. Tell us what what have been the biggest challenges along the way.

Rachel O’Connor
So the biggest let’s think what have been the biggest challenges along the way? Definitely, like as I said before, like those first couple of years, were really hard. Just getting it off the ground. As as my kids were young, trying to work part time and start a business is really hard under any circumstances, but one of the the big ones for us in our industry is that your PI costs are not prorated because you’re working part time your licensing fees are not prorated because you’re working part time. So none of your expenses is prorated and that was where I think that was probably one of the mistakes, I guess, or not mistakes. But things I missed in the early planning stages was how would I, you know, how do you basically overcome those fixed costs that you start with the day you open the doors, when your plan is to only work part time. And so that just involves me essentially working a lot of weekends and a lot of nights. So I had sort of part time childcare, but a full time workload to really try and get on top of that. So that was, that was a really big challenge, I would say in those first couple of years until I reached the point where I had, I guess, this the client book to support the expenses. And, you know, and sort of to be able to then start to bring in some additional support

Ben Nash
probably doesn’t help that through that time, we’ve seen probably the biggest increase in costs for financial planning, like running and financial planning business that I’ve seen over the course of the years that I’ve been in advice, as well. So

Rachel O’Connor
yeah, totally. And yeah, my, my, in my first year, I think, in the first year of business, and so I’ve done all my modeling, and I’ve done all of the budgeting and forecasting for the business based on licensing sitting at a certain level. And in that first 12 or 18 months, it tripled. And it was already one of my biggest expenses. And yeah, and that that occurring at a time when the business was really vulnerable. And when I was already really stretched both professionally and personally was was one of those moments where I was like, oh shit, we have I made a massive mistake here am I gonna get through this?

Ben Nash
Well, thankfully, we’ve seen not the PI’s getting any cheaper, but at least like funding levies and that sort of stuff, getting some sense of rationalization with you know, ASIC, recognizing that the Royal Commission and big insides were large contributors to what those costs needed to be. So fingers crossed that that’s that tempers a little moving forward. I’m keen to chat. And we’ve been talking a little bit offline, today and over the last little bit about retention. And I know for for me like in, in my business I started seven years ago and working with, you know, not a dissimilar market, that you’re working with younger people, you’re helping them set up financial foundations, and really successes that people start saving more investing, you know, get a lot of the things in place. And I feel like it is sort of natural in that segment. And it’s been a challenge for us to get people on the journey. And then they’re going oh, well, actually, what am I going to get out of paying someone you know, what they see is one of the probably one of their biggest expenses outside of their mortgage and housing costs for ongoing financial advice when they feel like they’re doing a lot of a lot of things. Right. Can you talk to us a bit about that? You know, how it’s come about and the work that you’ve done there?

Rachel O’Connor
Yeah, so I, that was yeah, that was my reason for calling you a few weeks ago, because I was keen to talk to you about about that. So working out. So with the younger clients where you know that there is maybe there isn’t, they say a huge pool of assets that you’re managing, but there’s a lot of income. And there’s a lot of complexity, and there’s a lot going on. And when you do a really good job, and you really make it look easy. I think as an advisor we can we can make things really simple and elegant and make it look easy. And then and then people might start to question Okay, well, maybe I can do this myself and sort of try and I guess, show people what you do and demonstrate that value to keep to keep that relationship ongoing knowing that that, you know, they really do still need a lot of your help. So yeah, just I guess what I’ve following that conversation with you and with others, and with a couple of clients as well who’ve been really helpful. What I’ve started working on is a few different tiers of service. So up until recently, I was very limited in in terms of my the flexibility that I would offer. All of my clients were getting two reviews a year paying me a fee based on that, and there wasn’t a lot of flexibility. I think that that was partly because as a new business, I was wanting to nail one thing and you know, really refine that and get it right. But then what I’ve found as sort of as I’ve now got clients who’ve been working with me for a couple of years or three or four years, it’s what I’m now working on is providing a sort of options for people to either step up or step down in terms of how much of my time they want. So I’m now giving people the option of dropping to one review a year, keeping it to or increasing to three and that I have found really has been really positively received by my clients who are, you know, maybe they so for example, one of the clients I spoke to had just bought a house, which was something that we worked really hard together on helping them achieve over a sort of a two to three year period. They bought the house, obviously, we know what interest rates have done and the strategy for them turn to we need to focus on paying down the mortgage. And so then the question came up was, should we keep paying you your fee? Or should we direct that money to our mortgage. And so what you know, what we then work through together was dropping down to a one review a year. So that could still provide all of the other support that I provide to them around cashflow, and super and investing and insurance and all of that sort of thing, while also giving them some breathing space to direct some of that cash flow back to their mortgage. The benefit for me in my business is it then frees up a bit of my time to then have capacity to take on another client, which so once I did all of the numbers around, what would this look like for my business? Is it just me sort of losing business? Or is it actually a potential opportunity for me to increase my capacity, and what I found was that I actually can increase capacity by doing so. So help more people give these clients sort of the flexibility they need keep the relationship there. And so it was sort of a win win there. And then what I’ve also found is that one thing that I’ve really struggled with over the years is when the scope like the the the demands of the client go beyond what the scope of what you’ve initially offered. So I would often have clients who, you know, I’ve said, I provide two reviews a year, but there was always something coming up, which required another meeting or more modeling or reworking this and stuff like that. And so now with this sort of flexibility, I feel like I’ve got you know, and having these packages sort of work through I feel like I’ve got some something to come to when when clients are saying I need more, I can say great, I offer more. And it’s an easy thing conversation to also bring in. And if I’m giving you more, I’m also charging me more and is that what you want, as opposed to I think what I was definitely guilty of in the past was just being like, Yes, I’ll do it for you. And then that sort of really coming at a cost to me in the business. So I think that that’s, that’s really good, too. So yeah, we’ve now got and it’s really easy to talk to clients about because you can say like, you know, we all know, like you might have a year where you change jobs, buy a house, whatever, I’ll lose a job, etc. And then, and you need a lot of support in that. But then there might be other times where you do just let things take over for a little while, while you recalibrate after a lot of changes. And so having that flexibility to kind of work with offer to clients is seems to be working really well. It’s been really well received.

Ben Nash
Yeah, I think it’s a it’s an interesting one, because you can’t, you can’t always foresee what might change. And it’s funny that you have like, we’re literally having conversation with a client this morning. And they’ve been clients for the business for about six years. And they’re going well, we, you know, we worked with them for, I think it was like almost three years to buy their first home, which they ultimately did. And then we focus on paying down the debt to the level and then buying an investment property, which they did. And then they’ve got an investment portfolio. And they’re like, Well, we think we’ve got this stuff that’s like, what’s going to change, but I remember having similar conversations with people, just a head of COVID and the saying the same thing. And then then and then obviously COVID hidden, like the whole world changed, and everyone’s wants change as well. And so it’s like, they don’t always know that, you know, they don’t think that that will happen. Like, obviously, no one thought the COVID was going to happen. But these things do come up. And it means that they’re going to get value out of being there. And I don’t know, I think for one of the things that you mentioned, just when we’re chatting offline, I thought was a really interesting concept. And it’s something that we’re also working on but haven’t fully rolled out yet. But just as that talk of the like the multi year advice journey that we like, you work with our clients on a 12 month fixed term contract and we’re like, you know, this is the this is what the 12 months looks like. And I think most advisors are generally pretty good at explaining that to people but I feel like we can almost anchor it in clients minds that it’s like, this is what you’re doing. It’s a 12 month thing but at the same time we know that for them to really achieve financial freedom. It’s like it’s going to be decade you know, multi decade type journey in them, keeping a high level of focus on their goals, you know what they’re doing and then optimizing everything along the way. Really As you know, provide a significant financial uplift alongside the non financial benefits that, that we all know about. And one thing our business coaches been saying to us is like, you’ve got to then map it out and show clients and I feel like you, you sort of know like, we know that the start its foundations, and then you go through sometimes, and a lot of times, I’ve found that there’s a bit of a lull period where it’s like, we’re following the bouncing ball a bit. Yeah, then like things start to I found when you get over that three year mark, that things can really start to accelerate when they got the right. chalks in place. Yeah, yeah. Tell us about, like, how have you been actually doing that with with your clients? And what’s been the response?

Rachel O’Connor
Yeah, so one of the one of the So like you said, with that 12 month, fixed sort of arrangement that we’ve got, it does, it does sometimes lead people to think Oh, and at that 12 months, I’ll reconsider this relationship altogether. And so what I’m trying now to emphasize with people at the signup stage, and then at every review, and so on, is the importance of having all of how advice adds value, basically, like through a business cycle. And so Vanguard has done a lot of research on the value of advice. And one of the biggest components that they suggest the value of advice comes from ease in the behavioral coaching that we help our clients with, which doesn’t necessarily get put in an SOA or, you know, it’s not visible, it’s so it’s just those conversations we have all the time, but how do you put it, how do you kind of express that to a client in a way that they can see it, and I think that when you think about it in terms of a business cycle, one of the things that I’ve been saying to clients is like, you know, if we’re working together through a business cycle, there will be in that timeframe, there will be moments of, like, panic and fear. And that’ll be a really important point where, with good support, we’ll be able to stay the course on a really good strategy, or adapt if we need to adapt, you know, in those scary moments, but actually talking you into sticking with a good strategy, when it feels like it’s all going to hell is going to add a hell of a lot of value. And then likewise, talking you out of something kind of a bit wild and crazy at that moment in the market where we’ve hit euphoria. And, you know, the, the sort of the, basically the peak of the market, which we’ve you know, we’ve sort of seen both of those in the last couple of years, on steroids through COVID. So kind of anchoring back to those emotions, that sort of that cycle of emotions, and how much support and advisor can provide on that journey as well. And so I’m really trying to emphasize to my clients that the value the most to get the most value out of the advice to really get the return on the investment that you make in that annual fee, we really need to be thinking of this as sort of a five to seven year minimum type relationship, to get sort of the, to really get the full value out of it. And for clients that I’m, I’m not great at this, I’m trying to get better at it, but help, like basically looking at clients and say, not sort of before they’ve signed up and having the conversation with them then to work out. Like, if you’re not really going to stick with this, if it’s just a one year thing, you’re probably not going to get the value out of it that you need to get and therefore you maybe you need to find, you know, work with a different advisor, basically.

Ben Nash
And what’s been the impact with clients of having those conversations and to your business? Well,

Rachel O’Connor
I mean, it’s, it’s, it’s one that’s sort of an ongoing conversation, which I’m just trying to stop, I’m actually it’s only been in the last kind of few months. And I’m trying to start to shift that conversation a bit and try to sort of evolve it a bit. And so I wouldn’t, it’s probably a little bit too soon, just to say in terms of results for existing clients. But certainly, I think it’s it’s sharpening up my mind at the beginning of the relationship in terms of which clients I should be taking on and which ones I shouldn’t. I’ve definitely been guilty over the years. I think in that early, those early days of sort of scarcity and things like that are probably taking on clients that that maybe aren’t quite right, for my business. And so it’s helping me to be a little bit more. Just yeah, just to say that that initial stage a bit more clearly as to whether this is is the right client for the business.

Ben Nash
And it makes sense. And I think like, we we know that the results come over time. And we know that people when they’re doing it on their own are not going to get the outcome. So it’s like it’s, it gives someone a financial plan, and then you don’t work with them ongoing, like they’re very ill to get the results through. So it’s almost like you’re serving them, you know, by doing it and obviously there’s there’s better commercial outcomes attached to the business and in doing that, yeah, and I

Rachel O’Connor
know that I know that if if a client pays me for an SOA and I don’t implement it, I know that Just know we’ve seen it, you would know it to half of that will get implemented, maybe there’ll be mistakes made, there’ll be, it’ll be costly, it’ll take longer than it should. And at the end of the day, the clients will feel like they didn’t get a result from the advice. The advice wasn’t good, when in fact, it was the implementation that it fell down. And this is something that in the team, we really emphasize, like, in our work is the importance of implementing the advice because up until that point of implementing the advice, everything we’ve presented, it’s just talk, it’s just, it’s just, it’s just words on a piece of paper, right? Where, where the advice has value is once we start actioning it and that’s where the implementation is really important. The Accountability, the ongoing relationship is where you get the results from an advice, the upfront statement of advice. It’s, it’s just a pile of paper as far as I’m concerned.

Ben Nash
And it’s such a funny thing as well. Like, the psychology fascinates me, like with clients that they go and engage a financial advisor, go through an advice process, make a bunch of decisions, but then it comes time to like the implementation piece and people started going on, maybe I should just change this thing, or, or do I really want to do that. It’s like, the hell guys like you, like, you know, you chose to do this. And then it’s, you’ve, you’ve made your choice. And like, there it is, like you the reason that you came to an advisor. And the reason that you agreed to pay money to a financial advisor is to, because you wanted more savings and more investments or, you know, better super fund or whatever those things are. But like I said, it sort of boggles me but it also fascinates me a bit to see where where people get these roadblocks. So I found for us, like, we went through a period where our implementation was really falling down. And now we have a real focus with clients at the front end and going, Look, you know, you’ve come to us, you come to us as the experts, and because our message clearly resonates with you. We have done this 1000 times before, so we know what works and what doesn’t. So what we suggest is that if you’re going to do the dance and lean into our way of doing it, if you try it and you don’t like it, which we know won’t happen. But if you do, then we can change things. But if you try to do 90% of it, it’s going to be frustrating, then it’s also difficult for us to guide you effectively around doing it, because you’re sort of running your own race, but with some of the stuff that we’ve given you and yeah, it’s, but it is really important. And I think particularly for we’ve found, because like I said, we’ve got this ongoing, you know, process on trying to always improve our retention that people need that, that implementation to be rock solid, so that they’re getting results so that they can feel that the small wins along the way, because financial freedom is, you know, years into the future. It’s like they they come to us for that. But they stay. Because they get oh yeah, we’ve hit that milestone or we’re now we’ve got investment income at this level, or we’ve got an investment portfolio this size, or whatever. So yeah, it’s a it is it’s not an easy thing to crack, for sure. But it is an important one, particularly for those accumulator clients, at least. Yeah, definitely a bit of a random question for you, but knowing what you know, now, like four years into your business, what, what’s, what’s something that you didn’t expect to be important, but you found actually is?

Rachel O’Connor
Oh, that’s a good question. Um, I didn’t expect to be important, but actually is. I would say, like, it’s a bit of it’s a bit of a bit of a cliche, but like, keeping my own oxygen mask on. At the beginning, starting the business, I was just sort of running on adrenaline and coffee and just pushing, pushing, pushing, hustling, grinding, just like working. And it worked. And it worked. To be honest, like you you can you can achieve a lot just through like grit and determination. But I think that that will get you through the first couple of years. And then after that, you need to sort of think about things with a real long term focus. And I really try now to think about the decisions I’m making, like could if I make this change, is this something I can sustain for 10 years? And if if you know a change in the business is going to require me to make sacrifices that I can’t sustain long term then I’m getting better at saying no, then that’s not that’s not going to work at all because what I found is that when I’ve really really just relied on on hustling to you know, working harder and longer to to make The next step it’s it’s sort of like a, I guess, a fad diet where you kind of you might lose the weight, but then you gain it back really quickly. And so, yeah, I’m, I’m now finding that when I look after myself, I actually love what I do. And I love this business. And I can see myself doing this for 2030 years, as soon as I start to give up my weekends, and, you know, let the hours take up my sleep time and things like that, I start to hate it. And so yeah, that’s probably shouldn’t have taken me as long to figure that out as it has. But that’s, that’s where I’m at right now.

Ben Nash
Well, I think you do naturally need to hustle to get stuff off the ground, as you say that I think as being an advisor, there’s always something more you can be doing. And then as a business owner, as well, that there’s there’s always something else to focus on in some way do better, or a challenge to overcome or a problem to solve or, or whatever. And I think I love that challenge. But also, like I learned in code COVID, where it’s like, you know, freak out, is the world going to end? Is my business going to fail the work super hard, but then go shit, this is just not and particularly with young kids and stuff in the mix in sight. You need to be a human being as well as a, as a good worker, be an a good, good business business owner to on that, how do you find balance? You’ve got a young family. And you know that that’s got a bunch of demands that come along with it. How do you balance the typical sort of week are your time today?

Rachel O’Connor
Yeah, so I, it’s like, I’m always tweaking and adjusting to try and make it work. So that’s a constant process. One little phrase that I heard on my actually actually on a parenting podcast was that balance is balancing. It’s not something you achieve, it’s something that you do. So if you think about like a tightrope walker, do I say that right? Anyway, you think about someone bouncing on a tightrope, they’re constantly making tiny little adjustments to stay balanced to stay on the tightrope. And so that’s what you’re doing as well, when you’re trying to get balance in your life is it’s, it’s, it just swings back and forth, and all of those little adjustments to keep you on track. So that helps. But in terms of like practically what I’m doing, so I do a four day week. So Friday is my day off. And my kids are still at daycare, but I do a couple of things with them. And I do something for myself. And what that day gives me is it’s a buffer. So when stuff comes up that I wasn’t expecting, say a kid gets sick or I get sick, or a client has some sort of something or other that they they just need me to focus on them, it means that I have that day that acts as a shock absorber, so that I’m not stressed. You know, if they make those, My son can’t go to daycare one day, during the week, there’s a day free that I can actually shift client meetings to, and or do the work on that day. And so that that’s a big one. I work I do all my meetings, usually on Wednesdays and Thursdays. And then I do like the work and work on the business on Mondays and Tuesdays that that helps with my family life. My husband does different days in the city to me. So there’s always someone at home to do daycare and school pick up and drop off and things like that. And it also means I find that that like from a productivity point of view, I just get in that zone, I might do five meetings a day on both of those days. And it’s just go go go. But then I’ve got a no that it’s just two days, and then the rest of the week, I can do the work without really too many interruptions. Yeah, and then I’m always like, I love like those productivity hacks and things like that. I’m always, you know, keen on the different strategies like time blocking and Pomodoro technique and things like that, which I use to sort of just get that little bit of extra juice out each day.

Ben Nash
Totally, I found for me, I know. And I was saying to you offline as well that I do my Monday, Wednesday Fridays in the office, and I tend to crank them with meetings, not so much on the client side, but into internal meetings or partner meetings or whatever those things are. And then on Tuesdays and Thursdays, I’m getting better at not not taking on any meetings at all. So I can just do the you know, the on business type stuff and I find it is a lot more effective than you try to you know, you’ve got a 90 minute block and then you’re trying to get in the zone and then you’re trying to change things up. That you can just find a little bit more flow but

Rachel O’Connor
Yeah, I did that on Mondays and Tuesdays. Yeah. And I found that really helps my mental health as well because I just you know, like I just find it You know, as you know, the Monday itis isn’t half as bad if you know you don’t need to see anyone that helps that system works for me.

Ben Nash
Plus if you if you’re doing it at the front end of the week, and we do do all of our team stuff on Mondays, but having a bit of time early in the week, and then you feel like you’ve got some wins on the board so that the rest of your time can get consumed with the inbusiness stuff. And you still feel like you’re you’ve achieved something before you’ve got to that point as well. So I find that to be quite helpful. Rach, my last question for you is, if you could go back to your day oneself and do one thing differently. What would it be?

Rachel O’Connor
Day one? I, I would say I would I would, I would be more realistic about how much support I need and how much I can do on my own. Both with the kids and with the business, I’d probably I’d probably come in with a bit more support both at home and at work. Because it was it was a rough It was a rough little while that first that first couple of years. And it didn’t probably didn’t need to be as hard as it was. But I was trying to do it all myself.

Ben Nash
I love it. Yeah, we could always do with a little bit more support that as I said at the start, you sort of jumped right into the thick of it there with with

Rachel O’Connor
Yeah, I was just getting such a rush. And I look back now and I’m like, I didn’t mean to do it so quickly. Like that would probably be I’m probably that’s probably what I tell myself like just wait six months, wait a year, it’ll still be there. Like because my kids were six months and just turned two when I started the business. That was madness.

Ben Nash
That’s amazing. And I say I’ve got a young family. But I’ve got an amazing wife that does a lot of the heavy lifting there that allows me to do you know what I need to do on the business side? I think if I’m the primary caregiver, I definitely would not be able to balance the two. So well done. Yeah. Well, Rach, thank you so much for sharing your insights. It’s awesome to watch your business continue to thrive. And look, I’m looking forward to the next conversation who knows where we’ll be. Again, really, really appreciate you sharing your insights.

Rachel O’Connor
Thanks for having me. It was nice to chat.